In the state capitalist world there are government-run enterprises like Gazprom, Petrobras, Saudi Aramco, Petronas, Petróleos de Venezuela, China National Petroleum Corporation and the National Iranian Oil Company. These companies create wealth for the political cliques, and they, in turn, have the power of the state behind them.
With this advantage, state energy companies have been absolutely crushing the private-sector energy companies. In America, we use the phrase Big Oil to describe Exxon Mobil, BP, Royal Dutch Shell and others. But that just shows how parochial we are. In fact, none of these private companies make it on a list of the world’s top 13 energy companies. A generation ago, the biggest multinationals produced well more than half of the world’s oil and gas. But now, according to Bremmer, they produce just 10 percent of the world’s oil and gas and hold only about 3 percent of the world’s reserves.
Well, yes. And if I nationalized the toothbrush industry, I’d make 100% of the toothbrushes in the country. See how effective socialism is? It works — just like magic!
Unanswered of course would be how many toothbrushes I made per year, what quality they were, what features they had, whether my customers were happy, and how brutally I’d suppressed the do-it-yourself dentistry folks. But when you’re the only game in town, you can really, really win. Sure. And when the ground holds so much wealth, the state’s going to elbow in somehow. We even used to have a name for it. (Hint: It wasn’t a good thing.)
Obligatory disclaimer: This is not to say that our own oil companies have been paradigms of free-market virtue either.