86 
nations could be faced with reduced materials imports and higher 
rices. 
Others maintain that the OPEC example represents a unique case 
and cannot be duplicated by other industrial raw materials.* The 
demand for petroleum is, at least in the short term, much less respon- 
sive to price increases because the industrialized world is heavily de- 
pendent on petroleum and alternative energy sources are not readily 
available. Also, it is claimed, the OPEC success was facilitated by the 
corporate behavior of the major oil companies, a situation not dupli- 
cated by other commodities.® 
A State Department study titled Raw Materials Other Than Oil as 
Economic Weapons Against the United States and Other Major Con- 
sumers concluded that countries exporting critical raw materials such 
as copper and bauxite may be tempted to follow the example of the 
cartel of the oil producing countries by restricting production and 
raising prices, but they will probably be unsuccessful for lack of com- 
mon economic and political objectives. For example, through lack of 
cooperation from Chile,.the largest copper producer in CIPEKC, the 
organization has not been effective. Chilean officials fear that the world 
economic situation would be further stressed by increased copper 
prices and limited output, which would damage Chile’s economic in- 
terests in the long run. The State Department study pointed out: 
The long-run interests of producers of all raw materials lie in not doing per- 
manent harm to the economic well-being of the industrial countries. They threat- 
en these interests only in extremis as perceived in terms of their own national 
interest. Only extreme and exceptional circumstances have enabled the Arab 
producing countries to stand more or less united on prices. On other issues they 
are still often at odds. 
_ Furthermore, the study suggests that even quite substantial price 
Increases will result in relative small increases in prices of most fin- 
ished product. In the long-run, with the single exception of diamonds, 
the few cartels which have held together were rarely able to garner 
significant windfalls for themselves. The avoidance of cutthroat com- 
petition among the members has been the major accomplishment of 
cartels in the past. However, others maintain that past failures took 
place largely during periods when buyers’ markets existed for most 
commodities, whereas at present, sellers’ markets appear to be the rule.” 
_ Among the conditions listed in the State Department study for effec- 
tive producer power were: 
1. Producer control over a substantial share of world produc- 
tion entering into international trade; 
2. Financial resources adequate to cover the loss of export earn- 
ings involved in restricting exports; 
3. Inability of consumers to develop alternative sources of sup- 
ply in short and medium-term ; 
4. Absence of consumer stockpiles; 
5. Limited possibilities for substitution by synthetic or other 
natural materials; and 
4 Krasner, S. D. One, Two, Many OPHC’s . . .? Oil is the Exception. Foreign Policy, 
No. 14, Spring 1974, p. 79. E q 
pie, p. 77-78. K 
epartment of State Memorandum, Jan. 22, 1974. In Mi 1R the Deep. 
Seabed Part it op, cit ae n Mineral Resources of the Deep. 
ergsten, C. F. One, Two, Many OPEHC’s * * * ? (3) The Th is Real. Foret 
Policy, No. 14. Spring 1974, p. 85. a i . iecamsett i ice 
