Enforcing Petro-socialism in Iraq.

In an April 20 dispatch from Qayyarah, Iraq, the Washington Times reported: "U.S. forces are cracking down on an unexpected problem in this oil-rich country--gasoline bootlegging."

Thanks to deeply embedded corruption, a lack of refining capacity due to Saddam-era price controls, and attacks by insurgents on pipelines and refineries, Iraq suffers from gasoline shortages. Motorists often have to queue up for hours to fill their tanks. However, "in many Iraqi cities, men with plastic containers full of gas line the roads outside gas stations, offering the same product for a much higher price but faster. Motorists pull up, hand a wad of dinars out the window, and wait as the bootlegger fills the tank using a funnel and a hose." Often the bootleggers will buy gasoline at a local station, and then deploy themselves a few hundred yards away, selling their gas at up to 100 percent profit. Of course, nobody is forced to pay the exorbitant mark-up, although in some cases bootlegging may contribute to the length of gas lines.

"In Nineveh and Diyala provinces, U.S. troops are shutting down bootleggers and giving their gas away for free in an effort to control the price of gasoline, protect the livelihoods of gas-station owners and employees, and in the long term, reduce the wait and encourage investment in gas distribution," continued the Times report. Occupation authorities also contend that long gas lines attract terrorist attacks, and so the military has closed down gas stations during critical times.

It's hardly clear how giving away gasoline would reduce the length of gas lines or help create a rational price structure. And if the intent is to reduce the time customers have to wait for gas--and thus the size of gas lines --bootlegging shouldn't be discouraged. Furthermore, many "legitimate" Iraqi gas distributors have had to make use of the black market in order to satisfy customer demand.

An April 20 Christian Science Monitor report from Baghdad described how Salam Hassan and Jabbar Kadhim, owners of an oil and gas delivery company, "dipped into the black market" during recent fuel shortages. "We have to deal with a lot of hotels and companies that depend on us," Hassan remarked. "So if I am late, they will go with someone else"--which is to say, another legitimate distributor with better black-market connections.

Iraqis, like people everywhere, are perfectly capable of creating the structures of a free market if they are permitted to. It doesn't appear that the U.S.-led occupation is any more eager than Saddam to permit a free market to flourish in Iraq.