Adam Smith…continued from ai5000 Magazine

“My favorite piece? One good one is in Paper Money; it is the story of OPEC and how it began with Abdullah Tariki and Perez Alfonso studying the minutes of the Texas Railroad Commission to see how to run a cartel.

In the ’70s a handful of oil-rich but otherwise poor countries held us up and caused the greatest transfer of wealth since the Spanish looted South America. No one resisted: not the Europeans, not the Japanese, and Nixon was in the White House twisting around Watergate. It was a bunch of poor countries where every teacher, every doctor, every engineer had come from the West, and when they raised the price of oil they expected to be punished, ‘we waited unconsciously for the whine of jets,’ one said.

But nothing happened. The oil-consuming countries could have gotten together with a consumer cartel but each was out to save itself first.”

To be sure to catch the start of Adam Smith’s Interrogation, available in ai5000 Magazine after February 3, click here.