The irony of state strength: comparative responses to the oil shocks in the 1970s

Abstract

Like two gigantic waves, the oil shocks crested over the advanced industrial world during the 1970s. The relatively stable postwar petroleum regime, managed by the large oil firms and protected by American diplomatic and military strength, collapsed. In seven years crude oil prices, adjusted for inflation, increased more than 500 percent. A multitude of national security, economic, and political challenges confronted the advanced industrial states. But unlike war, where the threat is observable and lines of conflict quickly become apparent, the oil shocks cast up problems that were more insidious—problems of energy security, economic adjustment, and industrial competitiveness. These international dilemmas could be defined in various ways, and a host of policy responses could be brought to bear upon them.