More on OPEC

I mentioned a pending proposal in Congress to allow antitrust actions against OPEC under Sherman. I am not sure what I think of that particular idea. I suppose I am mildly in favor, since cartels are not a good thing, and a cartel focused on oil is an especially not good thing.

However, Froma Harrop suggests an important downside: namely, breaking up the oil cartel would probably depress the price of oil, increasing demand even further for something that, frankly, we should be using less of anyway.  I am not sure how to take her argument exactly, other than that it is mostly right, even though I don’t see why we can’t try to break up OPEC and try to reduce consumption.  I am also uncertain that threatening OPEC, whose members include some important allies, is particularly wise at this point in time.

Meanwhile, Ronald Bailey over at Reason notes a counter-trend: the recent pattern of oil nationalization and rising costs, for example, in Russia and Venezuela. I don’t find this trend promising, either, although in light of the aforementioned Harrop argument, maybe it’s less of a bad thing than it would appear at first blush.


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