So I was talking to a friend that went to Pakistan

Accolaides to

Kimberly Munley,

So I am back into Politics

So I was reading Pravada Today

A Paper I found

Peak oil may promote changes in the political economy and in individual entitlement enforcement?

By Robert Silva

Introduction and Background

The liberal trade scheme is reliant on a cheap fuel source to promote individual to individual trade interaction.  The individual trade to individual trade is the method of entitlement enforcement. The promise of liberal trade is to promote economic development and to promote a higher standard of living of the individual. The current rising oil prices due to scarcity could force the international trade system to adopt a new method of trade interaction because the current production schemes go across vast geographical regions. Will this have affect on individual consumer’s quality of life and living habits? The underlying argument of this paper is the lack of leadership to promote an adequate quality of life, and have the foresight to promote innovation to lessen the burden of suffering created by scarcity. This may promote a change in the political economy.  The political economy is the policy structure of economic decision making. Authority structures can be democratic or oligarchic in nature.

Problem Formulation

The specific aspect to this problem I am looking at is; the decline of abundance of oil may promote constriction to economic activity? The result could affect the individual ability to provide for essential entitlements.  This could call for the populace to demand for changes of the political economy in trade and economic practices. The change of the international political economy may also be altered because of damage to the environment - a common survival promotes common mandates. The last reason the political economy could change is because of power sustaining and seeking of individual actors.

The systemic theories I am addressing that are to give context to the decision making in economic policy making process are David Ricardo’s “comparative advantage” and Joseph Schumpeter’s “creative destruction.” The theories become almost heuristics or rules of the thumb when dealing with a given situation about making economic decisions. The theories could be almost considered under rationalist choice because they deal with maximization of output, sustaining and creating economic activity which can relate to relative gains.  Comparative advantage is nested into the structure this means it is in the process that it does not affect the structure but only the actors. Creative Destruction explains how practices change the structure which promotes economic activity. As the results influences the actors and the common knowledge. This is because technology the result of innovation promotes a new common knowledge thus this allows new understanding to emerge. This also could be considered to have a sociological affect or norm diffusion among the people.

Does the theory of David Ricardo’s comparative advantage[1] hold true when transportation cost that promotes trade denies the economic advantage of off shoring? Must there be a comparative advantage in transportation to promote contemporary productions networks? When the comparative advantage is lost does this mean the structure changes and possible the political economy. This leads to the next logical step is the market following the rational cycles of innovation to sustain the current political economic institutional arrangement. Institutional is defined by codified practices that promote predictable behavior to any given situation.

  This is to address innovation of technological advance and Joseph Schumpeter theory of creative destruction. [2] The theory of creative destruction could be the method a comparative advantage is created through creating new technologies through innovation that creates efficiency, thus creating a comparative advantage. The example of innovation could be explained by the following. Early trade was based camels and walking on land for example the old silk road. The wind power of sail powered ships over the seas was the next transporting method. Then there was coal powered trains over vast expansions of land. Then petro based airplanes in the air over land and sea promoting efficiency in time and use of resources.  Each innovation propelled efficient transport and trade which lead to building of new infrastructures and economic activity.  As a fuel source declined so did economic activity that was support by the fuel source. Efficient methods of travel and transport allow for deeper integration thus affecting people’s quality of life, the sharing of culture and the creation of a global cultural due to business activities that was enabled by cheap travel and ability to trade.  Each innovation expanded economic activity not just in the creation of the infrastructure and the vehicles of trade but in other aspects of the economy.  Since oil is declining is there a sign of new technological advance taking its place? Evolutionary economic changes do precede the last condition but emerges from the situation before.[3] This could assert that structure is not the only thing that affects economic policy, but the agents could have affect on evolutionary steps of the economy.

The migration of labor to produce the new innovation to spread the scientific advancement causes the workforce to migrate to one mode of production to another. As the old production structure fads away as the new production structure creates the new technology. The workforce transfers to the next technological level of production creating income and demand for the products being create thus economic activity and increasing the quality of life to the populace apart of the trade regime. A trade regime is a group of treaties and regulation that coordinate trade behavior between states. The technology supports the trade regime because of market calculation defined by comparative advantage.  The technology promotes the comparative advantage of the practices.

The current trade regime was based on liberal principles. The state creates the environment for innovation, production and trade.  The major actors in the liberal trade regime are non-governmental actors. States doe not innovate, produce or trade but coordinates and promotes methods of production and trade.

This paper will look at the constraints upon the economy that affects decision making. The major constraint I will be exploring is concept of peak oil that promotes a perception of scarcity. Scarcity could be caused by other factors such as war; artificial market manipulations and collusion created by lack of production.  The perception of the story of peak oil could cause individuals and groups to respond in different methods. Scarcity could lead to resource competition and possible violent conflict to control resources.  This could be a motivation of states to nationalize oil assets to ensure populations benefit from the resources of there territory. This could fall under the promotion of human rights. The motivation enforcement of economic human rights could stem from international obligations and duties to its population. Another reason a state would nationalize oil reserves are to promote relative power through economic pressure because personal desire to sustain power over the domestic populace and international competitors.  This leads to the conclusion political economy could be a method for the promotion of human rights or dynastic control.

Major Questions of the Paper/Hypothesis

The question could be economic policy changes may be to promote the civilization goals, which would be to promote economic rights of citizens. Does notion of peak oil creates a perception of scarce resources may cause changes in the political economy or changes of the political economy come from promotion of human rights?

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Methodology

The method is a constructivist approach. I think this could explain continuity of events and define the structure and the actors relationships.  I will be defining the civilization goals which would be the contemporary economic rights defined by international law. The second is defining the oil industry and supply this would help clarify scarcity and possible resource competition. Then explore if some actors perceive the peak oil is the promotion of scarcity. Then I will begin to apply empirical evidence of observations in the media, speech acts, narratives, discourse of the major decision making actors in the political economy about the structure how they are responding to peak oil. Then compare the empirical evidence to the civilizations goals. Then do an analysis of empirical evidence which could be narratives and speech act to discern if the officials are promoting civilization goals because of scarce oil.

-Then the next step to check if the leaders are promoting the rhetoric is to look at quality of life indexes and social welfare demographics to ensure the leaders are promoting the rhetoric. The null hypothesis would be support by military build ups, increase spending on security, crime rate indexes and corruption rates. This would be the next paper after the discovery of the policy and intention of the leadership this would give time to see the affects of the policy.-

Civilization Goals

International law and economic rights,

The goal of this section of the paper is to define the civilization goals of economic practices and policy. Since the United Nations defines other aspects of the duties and obligations of states. I will be using the Universal Declaration of Human Rights to help define civilization goals of the Liberal economic practices. Since the World Bank, The International Monetary Fund and The World Trade Organization are considered a part of the United Nations system and important bodies.[4]

Economic rights are defined in the Universal Declaration of Human Rights (UDHR).  The common interpretation of legality or legitimacy of the UDHR is that it could be considered apart of customary law. For these reasons, states have used the UDHR as guidelines to create domestic constitutions.[5] The UDHR was accepted by all sovereign nations as an authoritative code of rights this was without reservations or disagreement.[6]  The UDHR also asserts that human rights issues are under the domain of the international community.[7]

 This is supported by the notion the state’s government are sovereign or have the ability to create obligations and duties to other states and each state is an equal persona in international law. This is asserted in Article two section one of the United Nations Charter.  Only the state can enter into contract with other states. Thus the decision of the state to follow obligations and duties of other states has the authority to enforce the contract, law or treaty in the domestic arena. This makes individual citizens responsible to adhere to international law and promote and respect rights. But first the treaty must go through proper acceptance processes, or be ratified to be considered supreme law of the land. In the United States Constitution, the laws of nations or treaties once ratified are supreme laws of the land which means no domestic law can countervail or contradict. If a treaty or a practice is not accepted by a state but another state does accept the practice. Then it depends on territorial jurisdiction where the situation is occurring about enforcement of treaty.  A state cannot ignore another state’s practices when it is an accepted practice or customary norm of that state. Although, a state must respect another state’s practice as long as it conforms to international principals which does not infringe on individual human rights.

 The concept of democracy makes the state or government the speaker to the international community for the individual citizen. This promotes states cannot create laws, treaties to make other states infringe upon their citizens rights or even state’s rights, as define in the authoritative code call the Universal Declaration of Human Rights. Thus the individual’s uses the state as a vehicle to express interest and rights to other citizens through their state in the international community. The UDHR is the guiding principles or the supra norms of laws, practices and policies of the international system and defines the purpose of the statecraft. The result of this is individual citizens have the protection of UDHR so a majority or a few cannot use the state to create obstacles to entitlements or rights. The same concept expressed in the United States Constitution limitations upon government.  The UDHR does assert an obligation upon the state to promote an environment so individual rights can be fulfilled.  This is important aspect to this paper.  The state is responsible to promote economic activity and functions to promote the liberty of the citizen, to reach entitlement fulfilment.  Liberty is the concept the freedom to practice rights, so the state is responsible to remove hindrances be it from private actors, or municipal, provincial, or city ordinances that interfere with right enforcement or liberty.  The state has the option to derogate rights and limit liberty in times of crisis that are defined by law and have legitimate aim.

The economic rights defined by Universal Declaration of Human Rights are located in articles 23,25,27,28 the important aspects are the right to work, the right to social security, the freedom of association in trade unions in Article 25 of UDHR the right of a quality of life that adequate for a health and well being for the individual and the dependents.  Plus people have the right to medical care.[8]  In Article 23 the individual has the right to work and has a free choice of work and protection against unemployment and favourable working conditions.  In Article 22 describes that each individual has the right to social security through national effort and with international co-operation.  In Article 21 expresses that people have a right to own property. These articles promote that individual have the right to partake in the economic system and cannot be barred from work if able to work.[9] The state is supposed to promote an economic environment that will promote all these rights. The civilization goal is for people to work either in a company or work by operating and owning a company, to provide for adequate quality of life and well being for their citizens.

In article 27 expresses that the individual has the right partake and share in the cultural, artistic advances of society, and have the right to share in scientific advances. This is the article could support that technological advances are needed to ensure the individual partakes in uses of resources that the technological advances use. The use of oil and cars could be considered a technological advance or a scientific advancement. -Does globalization promotes a society. Or does the United Nations constitute a global society because of premises of democracies and states are vehicles for communication and coordination rather than objects that create divisions? -   The need for efficiency in methods of distribution and uses of resources could be considered a strong motivation to promote and enforce human rights. Also Article 22 could be used by states to subsidize innovation and policy to ensure distribution of services and resources. Article 25 could be the bases to promote innovation and technological advances in efficient methods to use resources to ensure and sustain an adequate quality life. This is where the Liberal economic could have been created to promote this civilization goal, because of underlying theories of the economic scheme promotes efficiency. The goal is to meet the needs and rights of the people. The notions that are written in the document and each right are considered in equal in priority.

The major financial and trade bodies falls under the United Nation’s organization and the guiding principles of the Untied Nations is the Universal Declaration of Human Rights, thus through practical reasoning, the policies of these institutions should promote the civilization goals. 

Theories of past practices and behaviour

This section is show possible power seeking by elites by using rational market reasoning to justify transference of decision making authority and weakening the relative power of the employee.  This section is to give a possible model or pattern to base analysis off of. Since this case study was documented and is a good example of possible misuse of arguments of comparative advantage and innovation to weaken the relative power and marginalize a portion of society in a nation state.

To support this notion one could look at Andrew Glyn’s book Capitalism Unleashed.  This book describes the transference of state control of economic policy to employer control economic policy. The arguments could be considered as rational calculations to promote economic activity. These are the arguments of the transfer of decision making through rational reasoning of market and monetary policy to promote development. [10]The assumption was the system was not working because of democratic practices of the factory, voting of the labor to make decisions about.

Andrew Glyn looks at the British political economy and the economies of United States, Europe and Austria-Asia as case studies. The time period studied was the 1950’s to 1960’s called the golden age because of economic expansion and growth but it was followed by economic destabilization in the late 1960’s and 1970’s.[11]  The common believed arguments made was because the strengthen position of labor that did not allow for further expansion. Andrew Glyn points out the capitalism natural flow -pointed out by Joseph Schumpeter called creative destruction- did not allow to follow its course. The economic boom of the 1950’s and 1960’s was coming out of change of economic practices from agriculture jobs to industrial and service jobs this was cause of economic expansion innovation and distribution and implantation of the new technology in society.[12]

The popular argument was low unemployment with low inflation promoted rapid economic growth and higher living standards which lead to an unprecedented economic boom. High employment strengthened bargaining position of the worker this lead to wage increases.[13] The decline of agriculture jobs forced the workers to move to cities and this gave rise to trade unionism. This is also supported by political influence of the worker to organized and influence the political structure by promoting a legislative that would support the worker’s bargaining position. This promoted a profit squeeze for employers and limited their freedom to control capital outcomes of production. This means the authority to make decisions about productivity how many units are produce during a day and how many hours the worker had to work, and the amount of wages being paid to the worker. This created a situation that promoted conflict between employer and employees. The strike was a method the employee enforced barging position because of high employment. It was hard to replace striking workers, this lead to a loss of millions of man hours of productivity.[14] This was argued as one aspect that led to stagflation.

The second part of the formula that confounded economic stability was because of monetary practices which could be attributed to inflation and resource competition which can equate to supply and demand for energy and commodities in the global market.[15] The monetary practices caused inflation could be inferred because the lack of capital accumulation because of the worker’s control over the factory outputs and demands for a higher wage.[16] This led the employer to seek loans to purchase goods which added more money to the currency pool with same production levels reduce the purchasing power of the currency. Plus with foreign competitors paying fewer amount in wages to their employees and not inflating their currency with loans to purchase energy and raw resources. The lack of loans did not disrupt their currency valuation which can be interpreted as purchasing power parity and the creation of larger deficits to domestic lenders and international creditors.  This also promoted foreign competitors to produce a cheaper product which allowed infiltration into markets because of price competition or created a comparative advantage in price but maybe not in quality.  This weakens economic stability and constricted economic activity because sales were diminishing because of competition.

This led to shift from government policy to share holder control and allowing market forces to dictate decisions. This lead to the undermining labor’s bargaining power because of restrictive macroeconomic policies, renewed emphasis on market forces and shareholder values and intensifying international competition.[17] Tight or restrictive monetary and fiscal policies led to unemployment.[18] Unemployment helped promote the control over productivity and wage by the employer because of competition among employees for jobs.  The logical causation would be that people will take jobs at a less valued waged and this also created a pool of potential employees of the newly unemployed.  The implantation of technology or automation also helped create a needed employee pool to promote divisions in labor.[19] The psycho-sociological influence was job insecurity had risen in rich countries, thus do not cause problems and accept what is given to you as an employee. The ability for the employee to choose their jobs was contrived by rational calculations of the market. This could be to promote the relative power of the employer over the employee. This was supported with data of rise of unemployment rates in blue and white collar sector jobs. The free movement of capital allowed for a comparative advantage to cheaper labor pools thus globalization was a fix for stagnation of capital expansion, -or the increase activity of labor refining and distributing resources. The lack economic activity was because of the perception of strong bargaining position of labor. The counter argument was destabilization of economy is a natural occurrence and sign for needed innovation to take place and should be seen as a need for a new era or evolutionary step in development.

Andrew Glyn points out that “the production supply side did not prevent economic expansion and growth”[20] This could be asserted to mean the resources were abundant to produce goods. It was the lack of markets to purchase goods. The natural transition of technology or development of goods was taking place destabilization could have been a sign of reaching the limit of the market. There was a lack of new innovation to promote a higher quality of life in place to switch labor in creating and producing new goods to be sold in existing transforming market. As the agriculture jobs went to less develop countries and industry and service jobs took the place there was no innovation to take the place of industrial and service jobs of the 1970’s. The computer industry was still growing. Free flow of capital could be a viewed as a method to distribute innovation to other regions because high wages of the established economy made the items to expensive to purchase. The fact Andrew Glyn put forth, it was the lack of innovation or the creating of a new product to improve quality of life, and changing system to produce the new product. The old system finished its purpose spreading the level of technology to promote a higher quality of life, which enables new concepts and innovation. The economic system needed to change or retool to mass distribute the new innovation to promote higher qualities of life, which created a new demand.  This can relate to change from agriculture to industry in the 1950’s and 1960’s and loans in the 1970’s.  As seen in the 1990’s the spreading of the computer and internet which promote economic growth and expansion when the market has reached its limit in a region seen in the 2000’s loans try to replace innovation to promote economic activity.[21]

The purpose of explaining is innovation promotes economic development. The obligation of the state is to ensure each individual has the right to income and benefit from the society they live in. Innovation promotes economic activity and therefore income. It could be viewed this is the purpose of economic activity and the need to promote efficient methods of production and distribution to ensure each individual has the right to access resources and technological advancements this leads to income and fulfilment of economic human rights as seen in historical patterns of development.

This example in Andrew Glyn’s book shows that the most rational decision could have been to innovate to promote a comparative advantage and therefore a new industry, but the market dictated to move the industry to a cheaper labor pool. When this happen it weaken the relative bargaining power of the employer. This also diminished the size of the potential purchasing market because of purchasing power parity of the domestic populace. If the employer was looking at the offshore labor as a potential market or foreign markets then this was a rational choice based on own needs and relative power position. This decision was not made in the employee’s interest. The decision to offshore could have to promote an efficiency in development as seen with the creation of automation, but did limit the ability of the citizen’s to acquire an income because the jobs that went overseas were not replaced with new jobs. This could be perceived to promote the relative power of the employers over the employees because past cycles that were effective was followed by the creation of new innovation thus economic activity. The state’s obligation would be to promote income for its populace. The historical prestigious method could be considered done through innovation of new technology and scientific advancement.

The current situation

Define peak and oil ontology International Energy Structure[22]

This section is to look at the oil industry to begin to describe the oil structure. This section will hopefully give insight why oil is used because it carries a comparative advantage. Although the comparative advantage of oil could be lost because of theories of supply and demand. This also gives a chance to look at theories of peak oil to understand them. This section is to support that some leaders in the politics and the political economy perceive the concept of peak oil as the cause of scarcity.

Oil seems to be the cheapest liquid fuel source and easiest method to promote development.  This follows the theory of comparative advantage. The question is the infrastructure being built around a technology that is limited by production rates and finite access to resources to keep infrastructure operating. The need to define the oil infrastructure is vital because production outputs do affect the speed ability to create and maintain infrastructure, and promote trade since oil is related to transportation and transportation is related to trade. Japan began accelerated growth because of the introduction to oil.[23]  This is to support changing to a new technological level promote economic activity. Trade is the key idea that is running the current ideology and practices of the international trade regime. Development, growth and maintenance of the infrastructure and economy are based on energy sources that promote transportation, communications, and production.  This supports that oil promotes the current political economy. The table below shows the production rate of oil and rank of countries that produce the most oil. The table is broken up in rank, overall production rank in the world and how many barrels per day which is important because it takes some  many barrels of oil to keep daily economic activity per day per state.

Rank 2004                  / (billion barrels, 2006) / production 2004 million barrels (mb)[24]

1. Saudi Arabia                        267 billion bb      10.4 mb/d

2. Russia                                   60                         9.3 mb/d

3. USA                                     21                         8.7 mb/d

                                                         Crude oil = <5.2 mb/d

4. Iran                                      132                        4.1 mb/d

5. México                                 13                         3.8 mb/d

6. China                                    8                           3.6 mb/d

7. Norway                                8                            3.2 mb/d

8. Canada                                 179                        3.1 mb/d

9. Venezuela                            79                          2.9 mb/d

10. United Arab Emirates       98                           2.8 mb/d

11. Kuwait                             104

(Some sources say 48 billion -

The difference is 5% of world reserves)                 2.5 mb/d

12. Nigeria                                 36                        2.5 mb/d

13. United Kingdom                  4                          2.1 mb/d

14. Iraq                                      115                       2.0 mb/d

15. Other FSU

Kazakhstan + Azerbaijan          47                        1.9 mb/d

16. Algeria                                12                         1.7 mb/d

17. Brazil                                   11                         1.5 mb/d

18. Libya                                   39                         1.5 mb/d

19. Indonesia                            4                           1.1 mb/d

20. Angola                                6                           0.9 mb/d[25]

Theories about oil reserves and production

Most recognize theory about peak production in oil is called Hubert’s Peak. M King Hubert a geophysicist predicted that United State’s oil reserves would meet the half way point of exhaustions.[26] Hubert’s prediction did not come true during the decade of the 1970’s.  Hubert’s predictions forecasted that the world oil supply will meet its peak within five years.[27] The fact the oil is depleting and is not infinite. The people promoting alternative energy sources are not just activist but European leaders. This promotes that leaders of countries are perceiving peak oil as a cause of scarcity. The fact oil promotes transportation and has a direct influence on the liberal economic system because it was cheap and easy transport and use.[28] This had led the way for think tanks to promote alternative sources of energy. [29]The cost is creating a new fuel infrastructure has been a barrier to entry for most new fuel sources. Oil is going to be the fuel source to promote development in the developing world because it is still considered the cheapest.  Hubert’s predictions are based on basic ecological processes, which can relate to cycles of consumption. The possible theory of depletion of peak oil could be consumption is greater than natural oil creation. The oil cycle takes millions of years to go through its process while it takes months and years to extract and consume oil, thus oil will deplete because the speed of consumption is greater than the speed of replenishment.[30] The more oil reserves that are discovered the more oil will be used to build new infrastructure and activity this explains the acceleration in economic activity and more rapid depletion of new reserves.[31] I do not think scientist do not disagree with Hubert’s theory of depletion of reserves, but they disagree when the oil is going to meet its peak, because data to measure oil reserves could be unreliable and maybe there exists more reserves that we have not found.[32]

In this section of the paper I will begin to show the effects of peak oil on the economy. The factors the variables that I will be use to measure are overall consumer purchases, services limited, complaints and justification of industry leaders why sales are down.  I would hope to explain with narratives and observations the effects of rising oil prices which could be attributive to peak oil. The other explanation of why oil is limited is because of production rates are stifled because of manmade acts of terrorism or sabotage of oil production or collusion of production through syndication of oil producers.  The terrorism aspect could be caused by the necessity to control oil producing regions, as put forth by Foster Bellamy in the article Imperialism of Oil.[33]  The notion of peak oil could cause oil dependent nations to conquer other nations that have the resources of oil. The fact peak oil could be causation of acts of war for conquering or to control.  Terrorism could be a tool of provocation for conquering or to promote war.  This paper is not about provocation of war. Although war could have a direct affect on the political economy and economic activity. For example “Oil reached a record $117.54 a barrel yesterday, dragging up the price of gas to a new peak, amid concerns about crude supplies after a Japanese tanker was attacked in the Middle East and militants blew up a Royal Dutch Shell pipeline in Nigeria.”[34]  This can support terrorism could affect the price of oil and promote an artificial scarcity.

The aspect that I am looking at is the limitation of individual right fulfilment.  The causal change could have started with the notion of peak oil then creation of war which is terrorism, then colluding of prices which effects services offered to the individual to promote needs. The assumption is peak oil has occurred because supply cannot reach demand the support of this notion is rising oil prices. In America in could have been argued the peak had been achieve in 1971.[35]

Rising oil prices could cause ripples through the economy and the economy is a method to fulfil individual human rights. The section is to show the price of oil’s affects on services provided and the ability for individual citizens to achieve goods and services.

Empirical Evidence and Analysis

In a news article from The Business Times Singapore October 22 2007, [36]  Reports industry leaders are projecting a loss of profits and higher operations cost because of expensive oil. Early in the article the author quotes He Shuhan, a Chief operational officer of investment in  Farseers Pte Ltd a educational firm  states”….. Oil prices complicate the world economy ……..government leaders of oil dependent countries will employ resistant policies such as import substitution which augments and de-stabilise the global economy.” Import substitution is when a country begins to produce a good or service that is usually imported from another country because it is cheaper or has a comparative advantage. This statement supports that the price of oil affects comparative advantage of states because it drives production prices up.  This also changes the structure, function and practices of the economy itself.  The liberal trade scheme promotes inter-state trade that countries manufacture and trade goods and services. The lack of export trade promotes a balance of payment problems. This disrupts the trade practice scheme laid out in the Breton Woods system because. The assumption of the liberal economy is a country sells or exports a good that yields a high profit so they may purchase or import a good that do not produce but need to promote economic activity or fulfil the needs of their people. The goods and services that are traded have a niche in the global economy because of rarity, price and specialization.  The product could also hold higher standard in quality or to promote efficient use.  The statement by He Shuhan supports that high priced oil reduces the comparative advantage and may change the practices and decision making processes in the current economic practices.   In this same article the author states that oil prices affect the individual consumer, that public transit bus fares had increased, and disposal income will affect purchasing habits. This shows that scarce oil is affecting the ability for individuals to fulfil entitlements. This has an also has an effect on business because the lack of consumer sales. This affects the ability to fulfill the right to income. The oil price increase has a negative effect on the individual’s quality of life because not being able to purchase goods and creation of income. This report came from a Singapore News article about Singapore’s economic status on oil.

In the article is “Peak Oil a Myth?” explains that the affects of scarce oil has affect consumers in the United States to purchase more fuel efficient vehicles.  This affected Suburban Utility Vehicles sales to decrease and increase the sales of smaller more efficient vehicles.  The search for alternative fuel for transportation had begun to look at Canada’s tar sand as a possible source to offset energy needs.  American peak oil has affect oil prices and with the development of China and India competition for existing world oil resources exists.  This article supports the notion that peak had been reached thus supporting the perception which could cause an actor to act on this common knowledge. This article implies innovation must take place but because of the comparative advantage in the use of oil, it is not reasonable in the market calculation to begin to innovate and develop new energy sources.  Although the price of oil will become more expensive as the other countries begin to demand more resources as they develop more complex economies.

To promote and create superior efficient vehicle is a first sign of innovation of technology to use the same amount resources and to fulfil the needs of more consumers. The SUV’s are being phased out and being replaced with smaller cars that does the same function promote transportation with less resources used.

Reasons for Nationalization of Oil industries. The era of State Run Business.

The affect of peak oil or oil scarcity on could have caused the emergences of state owned corporations such as the Saudi Aramco, Gazprom, Russia CNPC China and NIOC Iran, PDVSA Venezuela, Petronas Malaysia. These national state-owned companies are extracting, refining and distributing energy resources, plus competing against other private businesses.[37]  This alters the Liberal or Bretton Woods development and trade scheme.  The concept is the states to create infrastructure and the environment and collect taxes from the private business that employ and refine and export goods to promote trade income to meet balance of payment of the states current accounts. This supports that state are adopting different practice which alter the structure and practices of the political economy because of perceptions to fulfill human rights thus promote civilization goals.

In 1949 the desire to nationalize Iranian Oil was to promote a development plan of the country. [38]The major areas of development were in the agriculture and industrial fields. The goal was to use oil proceed to promote economic development. President Truman was supported of Nationalization of Iranian Oil it was the Eisenhower administration that disagreed with the economic policy move.[39] The economic policy could have been motivated to promote development of infrastructure of Iran to promote higher quality of life for its citizens. Although the Iranian government had a profit sharing deal with British companies on Iranian oil proceeds. [40] The nationalization had United States support until change of leadership.  Thus it could be viewed to promote revenues to promote innovation and economic activity to promote rights fulfilment.

Brazil is contemplating about nationalizing oil because the Saudi Arabia is reaping revenues because of the nationalization of its oil. [41] A spokesperson of a Brazilian Union Alessandra Murteria is promoting a strike to use proceeds of oil revenues to promote social projects.  The rational calculation from nationalizing oil would be because of the Saudi Arabia experience that trillions of dollars are being directed into its sovereign wealth fund.[42] That the trend is happening such as Russia, Venezuela, Ecuador and Bolivia is nationalizing its strategic and economic assets. The official leaders of Brazil, Edison Lobao the Brazialian Mines and Energy Minister believes and proclaims oil should be to benefit the whole population rather than the stock holders.[43] This would be a common good argument and resources are meant to benefit the people.  The nationalization of Petrobras a Brazilian oil company would promote economic development to promote a new economy and create millions of jobs.  This argument could fall under a civilization goal of creating income and promoting a higher quality of life. The counter argument stated in article is that nationalized oil companies do not innovate and prices usually rise because of lack of competition that it creates a monopolistic environment. That stagnation will follow because of the lack coercion of competition. Although there are cases to support that innovation and economic expansion does happen while not running a non pure liberal economic development scheme.

Conclusion

I think constructivist approach can explain the possible changes in economy and economic practices. The perception of Peak oil could affect perception which can affect rationalities then the method the actor chooses to deal with the problem of peak oil or scarce oil. The paper did explored, war in some aspect, market controlling, and changing of the political economic practices.  This is supported with nationalization of the countries oil industry, terrorism affects oil prices which could affect production rates. Some actors even spoke about import substitution which goes against accepted norms of the trade regime which also alters the political economy. The need for charts and graphs are good indicators to figure systemic problems. The perception that I am putting forth economic stagnation comes for the lack of ideas and desire to promote civilization goals. Statistics and graphs could be narratives of market activity but do not explain why decision were made. The purpose of system is just important as operating of the system. The notion an actor responses for the structure in a certain policy trajectory cannot be explained.  The constructivist approach allows for the social construct to be created then on can begin to rationalize from the structure and the heuristics of the system to see if outcomes promote the civilization goals.  This allows for auditing to discern if the decision maker is promoting the supra norms of system.

I found that structure responses are not always about maximization of resources, outputs or profit.  That sometimes following a strict rational approach does not promote the civilization goals.  And not following a strict rationalist approach can also restrict the enforcement of economic human rights. It could be argued that each situation is unique but small theories can be applied to analyze any given situation when fits the proper circumstances.

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