ABSTRACT
This chapter is the study of the evolution of the world oil industry from the cartelization stage to its eventual globalization through real competition. Competition in advanced capitalism is the manifestation of mutual interaction of capital (and labor) and forces that regulate the price system across the economy, i.e., through commoditization, and their longer effect upon class polarization. Competition is as pervasive in modern capitalism as the law of gravity upon the falling bodies on earth. As the law of gravity in cosmology is not caused by the effect of gravitational pull on heavenly bodies, the law of value in capitalism is not produced by capitalist competition. It is competition that reveals the law of value. Marx alerts us that “In competition … everything appears upside down” (Marx, Capital, vol. 3, 1991: 311). Therefore, competition is not simply a state of affairs but a turbulent process that reveals the dynamics of the accumulation of wealth and the value and price formation in capitalism. The same analogy relates to rent proper in mature capitalist economies. Capitalist competition, unlike the ideal-type of “perfect competition” (a point of departure in the mainstream economics competition), necessitates the concentration and centralization of capital across the board and rather eloquently conforms to the integration of capitalism in its colossal corporate form across the boundary of the nation-states today. In this chapter one of the most integrated sectors of the global economy is the subject of scrutiny and thus demonstration of capitalist competition; and if this will prove the point that the characterization of today’s oil sector, along the line of “imperfect competition,” “oligopoly,” or “monopoly,” is little more than a mental construct, then, all other sectors with lower concentration and centralization of capital are in the ballpark of real competition. This also goes for the neo-Marxian theory of “monopoly capital,” the neo-Ricardian/Sraffian theory (see Shaikh 1982 for a critique), the post-Keynesian/Kaleckian theory, among others, whose delineation either implicitly or explicitly assumes departure from “pure competition.” On the other hand, for the Classical School, Schumpeterian School, Austrian School, and the economists associated with the Oxford Economists’ Research Group (OERG) competition, far from being “perfect” or “imperfect,” is a process by which capitalism propels itself rather dynamically. 1
