Erika Barris

Through the 1920s, Venezuela very quickly became the biggest oil exporter in the world.

And a small group of oil companies emerged as the most aggressive, the most prominent, and the most productive.

Companies, you know, like BP and Shell.

Eventually, they'd be called the Seven Sisters.

And among them was a small oil company from California, the company we now know as Chevron.

There is a word for a country like that, a word that Terry Carl is semi-certain she coined in her writing about Venezuela, petrostate.

Discovering massive amounts of oil is a treasure chest, holding a Pandora's box, holding an economics textbook.

Because along with the possibility of global riches comes a host of potential issues.

The first and most immediate effect of all this oil was the Dutch disease.

When something obscenely valuable is discovered in a country, it tends to upend the rest of the economy.

Except no, because that means buying things from the Netherlands becomes more expensive.

And so suddenly the existing industries, often agriculture and manufacturing, they have a hard time competing with other countries.

And it's astonishing.

The Dutch disease is a less debated prong of a very debated idea called the resource curse.

The idea that maybe discovering something like oil is a curse in the long run.

Because when one resource becomes a country's solo source of riches, it tends towards things like economic instability, authoritarianism, corruption.

Yeah, once oil took over the Venezuelan economy, there was all this wealth.

And one of the big challenges that arises with a petrostate like this one is you end up with all the power and wealth concentrated in one set of hands, or in this case, seven sets of hands, the seven sisters.

And concentrated power tends to lead to big power grabs.

At the time, Venezuela's minister of development was like, why are these seven sisters making so much money off of our oil?