One could also speculate whether, without oil, maximalist positions would have been abandoned by the Arab side and a more stable peace with Israel would have been worked out. Without oil, the world would certainly not have seen the ubiquitous spread of Wahhabism across the globe. Maybe a gentler Sufi persuasion would have prevailed. Without oil Saddam would not have survived so long and there would almost certainly not have been a US intervention there. One could argue that the invention of an oil substitute would benefit the common people of OPEC countries as distinct from their elites. They would be forced to create wealth by becoming productive societies, not just by letting foreign engineers drill out the black gold and pay them a tribute for that privilege.

We have eminent economists in our country in positions of power and responsibility. Yet we choose not to pursue our long-term interests as the Saudi monarch does. I personally know of two entrepreneurs in southern India who are making solar-powered lamps. If the price of kerosene were just a little higher, millions would switch from kerosene lamps to these solar lamps which draw on the plentiful sunlight available in our country. Why do we insist on subsidising kerosene? If we genuinely want to help the poor (as distinct from helping corrupt dealers who adulterate fuels), we would take the price of kerosene up and distribute cash to the poor, cash with which they would be free to continue to use kerosene lamps or buy solar ones. My bet is that if we did something as simple as this, my two entrepreneur friends would be selling solar lamps by the million, not in paltry thousands. But then, whose side are we on?

... contd.