Part 4, Chapter 22 Summary

At the tern of the 19th century, David Ricardo, a successful British stockbroker, defined "rents" as the rewards derived from nature's bounty in a given region, separate from any ingenuity or hard work by the owner. In the 1950s the notion was applied to oil, as the Saudis began demanding a greater portion of the difference between the market price of oil and the costs of transportation, processing, and distribution, as well as some return on its investment. The host country, as landlord, had sovereignty over the oil beneath its territory, but that oil was valueless until it was discovered, extracted, and marketed by a tenant. Should the rental rate increase as the value of the property, improved through the tenant's investment, rose? Or should the tenant reap the benefit? What was the risk of a dissatisfied landlord to the tenant...