The decline of the rent-based growth of the international oil industry

This work attempts to clarify the nature of the process of change that was unleashed in the international oil industry as a result of the two oil shocks of the seventies. It is based on the assumption that securing extraordinary profit is the leitmotif that has driven the growth of the oil industry since its inception. Consequently, it proposes that the strategic crux of the change involved the replacement of one form of extraordinary profit in the sector: ground rent, by another: that derived from technological innovation. In the development of this proposal, which is absent from current analyses of the phenomenon, it is found the key to: (1) deciphering the puzzle that the spectacular rise in crude prices during the seventies posed for political economy of oil; (2) progressing towards a reinterpretation of oil history; (3) visualizing the evolutionary course undertaken by the major oil corporations; and (4) understanding the contemporary development of oil, including the meaning of the price war of 1986 and the conflict in the Persian Gulf of 1990. The same proposal leads to a broader reflection regarding the nature of monopoly capital and the prospects opened to ground rent by capitalist development. In the first instance, it is argued that the evolution of monopoly capital is closely related to the forms of extraordinary profits that feed it, in an attempt to reassess the role played in this regard by technological innovation; in the second instance, a critique of apologetic visions of ground rent is undertaken, concluding that the only road that capital opens to the latter is that of its downfall