Redrawing the Boundaries Between State and Company

Abstract

Contrary to a widely held belief, the formation of cartel power on the crude oil market was not the only radical reorganization that took place in the 1970s. Cartelization of the market had occurred in earlier industry growth cycles as well, and is indeed part and parcel of the operation of the oil industry.1 The novelty for the oil industry was that cartel power was established by producer governments; the novelty for the world was that these were governments of developing countries. These innovations in the power relations in the oil industry had major repercussions on the world economy, and the `old economic order'was, albeit hastily, proclaimed obsolete. As a result, in the oil industry, it was the state or country that became the dominant level of analysis, while the sector or company level received less attention. This new emphasis rightly focused attention on government regulation of markets, but at the same time resulted in the neglect of the underlying dynamic market forces at company level.