Jorge Salazar-Carrillo, Bernadette West. Oil and Development in Venezuela during the 20th Century. Westport: Praeger, 2004. xiii + 280 pp. $75.00 (cloth), ISBN 978-0-275-97262-2.

Reviewed by Robert L. Smale (Department of History, The University of Missouri-Columbia)
Published on H-LatAm (August, 2006)

The Questionable Economics of Oil Development and the Questionable Development of Oil Economics

Jorge Salazar-Carrillo and Bernadette West offer this study of the Venezuelan oil industry as an empirical contribution to the debate over economic development in countries with per capita incomes significantly lower than those of the wealthy nations of the world. The text opens with three chapters discussing the principal theoretical debates of capitalist economics during the last couple of decades and their application to the goal of economic development. The first few chapters also introduce this book's theoretical and methodological approach. The authors strongly disagree with theorists who deny the potential of primary products produced for export to spark growth and development in the rest of the economy. They posit Venezuela in the twentieth century as an ideal case study that empirically proves the persuasiveness of their argument for export-oriented development. During the last century, Venezuela depended heavily upon the production and export of petroleum and its by-products, a typical primary product produced for export. The country's peripheral economic and political position mirrors that of numerous other nations seeking greater economic development.

After the introductory section, Salazar-Carrillo and West divide the history of the Venezuelan oil industry between 1910 and 2000 into nine different chapters. Some sections address over a decade, others discuss only a handful of years. The authors state that they have based the chronological sections on periods in which the behavior of the industry and the government differ significantly from the periods that both preceded it and followed. Each chronological section or chapter is further divided into standardized subsections that generally remain constant from one chapter to the next: the foreign exchange proceeds of the oil industry, oil tax revenues, investment in the petroleum industry, income expenditure generation, and finally the contribution of petroleum investment and growth to other segments of the Venezuelan economy.

The great strength of the text is the volume of economic data marshaled by Salazar-Carrillo and West. They present this data in 85 different tables throughout the book; the prose is primarily an explanation and explication of the figures presented in the tables. The book's tables present only one editing or production problem: the data in Table 12.4 and 12.5 are duplicates despite different headings. Much of the empirical information presented in this text appears in earlier works by Jorge Salazar-Carrillo: Oil in the Economic Development of Venezuela (1976) and Oil and Development in Venezuela During the Twentieth Century (1994) written with the assistance of Robert D. Cruz. The authors of this most recent incarnation never clarify the relationship between this text and the two earlier books. How much has been revised? How much has been changed? A cursory, side-by-side examination of the most recent publication and the volume produced in 1994 provokes significant questions. Obviously some new sections have been added, some sections contain a substantially revised prose, and other sections are simple reproductions of the earlier publication. Readers deserve an explanation.

Tangential to the primary focus of the text, there is a question that haunts the authors' arguments about the economic development sparked by Venezuela's oil industry: "Development for whom?" While not totally oblivious to the question, Salazar-Carrillo and West fail to explore the complete implications of economic inequality; their opinions on the subject are extraordinarily confused and contradictory. In the conclusion the authors observe that a "rise in product and income per capita can be impressive and still not affect most of the people, because of an unequal income distribution" (p. 257). Only a few paragraphs later they offer the following conclusion from Venezuela's economic history: "In the case of Venezuela, it appears that the inequality in its personal income distribution did not hamper the development process noticeably" (p. 258). And yet in the following paragraph, the authors express renewed concerns about the unequal distribution of wealth in the country: "A worrisome fact, however, is that the personal distribution of income in Venezuela appears to be getting worse" (p. 258). The inconsistencies capture perfectly the weakness of capitalist economics and some of the damaging topical omissions of this particular text. Salazar-Carrillo and West discuss in exhaustive detail the economics of oil, yet they rarely discuss the petroleum work force.

Workers, their concerns, and their organizations rarely appear in this book outside of the footnotes. When the authors do occasionally discuss the relationship between the petroleum workers and their employers, they invariably portray it as one of corporate benevolence both before and after the nationalization of the Venezuelan oil industry in the 1970s. During the first couple of decades of oil production in Venezuela, the authors highlight the industry's contributions to "public works, health, and education" (p. 60). As for the nationalization of the industry, Salazar-Carrillo and West fail to discuss this important modification in much detail; their approach to the subject is not in any way changed from previous chapters when the industry was made up of private businesses.

Labor is not the only important element of the Venezuelan oil economy neglected in this text. A reader with only a passing familiarity with Venezuelan political history might not be able to follow the larger political reasoning behind various shifts in petroleum policy because Salazar-Carrillo and West fail to provide detailed descriptions of the larger political context. While this might not distract or confuse individuals already intimately familiar with Venezuelan history, the authors obviously hope that this book reach a wider audience--those interested more generally in the topic of economic development for the poorer nations of the globe. The book makes the point that Venezuela's oil industry did contribute to the overall economic growth of the country during the twentieth century; the conclusion avoids many other more important questions. The real contribution of the text is not the conclusion but the economic data that is the heart of the book.

If there is additional discussion of this review, you may access it through the list discussion logs at: http://h-net.msu.edu/cgi-bin/logbrowse.pl.

Citation: Robert L. Smale. Review of Salazar-Carrillo, Jorge; West, Bernadette, Oil and Development in Venezuela during the 20th Century. H-LatAm, H-Net Reviews. August, 2006.
URL: http://www.h-net.org/reviews/showrev.php?id=12109

Copyright © 2006 by H-Net, all rights reserved. H-Net permits the redistribution and reprinting of this work for nonprofit, educational purposes, with full and accurate attribution to the author, web location, date of publication, originating list, and H-Net: Humanities & Social Sciences Online. For any other proposed use, contact the Reviews editorial staff at hbooks@mail.h-net.msu.edu.