Part 5, Chapter 31 Summary

By the mid-1970s, OPEC had turned the international order upside down. Its members were no longer exploited and ignored; now they were both courted and denounced for their collective ability to cause inflation or recession. They were the world's new bankers, determined to wield economic and political power and to serve as an example for the rest of the developing world. The years 1974-78 were "OPEC's Golden Age." The exporters' combined petroleum earnings rose from $23 billion in 1972 to $140 billion in 1977, and they did not bank their money idly. They went on a dizzying spending spree on weapon systems, which served only to heighten regional and national rivalries. Overheated economies caused galloping inflation, and a $67 billion surplus in balance of payments in 1974 turned into a $2 billion deficit by 1978. The "OPEC tax" - the industrialized countries' reduced purchasing power as a result...