The Effects of Absolute Rent on the Production Process

In 1973, a set of political and economic conditions helped OPEC establish their collective ability to restrict the world's supply of oil. The sharp increase of 1973 and 1974 in oil prices did not result from a world shortage of oil. It was rather the outcome of a long historical process by which nations, acting as landowners, developed an absolute means to extract rent on the basis of ownership of oil.