The Real Oil Shock: Re-examining petrodollar recycling’s impact on international credit markets

Smith, Ryan C. (2022) The Real Oil Shock: Re-examining petrodollar recycling’s impact on international credit markets. PhD thesis, University of Glasgow.

Abstract

The debate on the origins and causes of financialization is one of the big questions of modern economic history. Beginning in the 1970s, the international financial world underwent a series of dramatic changes which pushed banking to the centre stage of a new economic order characterized by new channels and unprecedented levels of globalized lending. This process of financialization was the core of the new neo-liberal capitalist world system which defines the present Second Period of Globalization. Generally speaking, the main arguments over how this happened tend to centre on questions of government policy, typically whether state intervention in economic affairs created the crisis, or larger, global developments which re-oriented the structures of international capitalism.

The Real Oil Shock provides further support for the more globally focused, materialist view by focusing on the birth of the endogenous petrocapital cycle, a period which began with the 1973 OPEC Oil Embargo and ended in 1982 with the collapse of oil revenues following the 1979 Oil Shock. Processing this new source of funds forced financial institutions to adapt to new market conditions, giving rise to many financial instruments which became central to the new neo-liberal world. This dissertation will demonstrate these claims by examining the British financial system supplemented with archival material retrieved from OPEC and the Bank for International Settlements. The key role played by British banks in facilitating the endogenous petrodollar cycle between 1974 and 1982 makes these firms, ranging from major international players like Barclay’s to regional actors like the Bank of Scotland, a critical window for understanding how this cycle developed during this formative period. These sources will show how petrodollars funded and initiated many of the innovations associated with financialization, providing a geopolitical, materialist explanation for the neoliberal economic revolution.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Colleges/Schools: College of Social Sciences > School of Social and Political Sciences > Economic and Social History
• Supervisor's Name: Fear, Professor Jeffrey, Ross, Professor Duncan and Mourlon-Druol, Professor Emmanuel
• Date of Award: 2022
• Depositing User: Theses Team
• Unique ID: glathesis:2022-82854
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 10 May 2022 08:53
• Last Modified: 10 May 2022 08:53
• Thesis DOI: 10.5525/gla.thesis.82854
• URI: https://theses.gla.ac.uk/id/eprint/82854