The Shah of Iran, Is He a Marxist?

At the press conference in Tehran—while solemnly announcing the raise of posted oil prices to $11.6 a barrel and the government take (correctly called royalty because it is the king who receives it) to $7—Shah Mohammed of Iran said:

We must base this matter on a new concept. We must compare the price of oil to the price of other sources of energy…. The price should be the minimum you would have to pay for the extraction of shale, the liquefication of coal. How much it costs to exploit these other sources of energy should be the basis for the price of oil.

His Highness, most likely, has never read the third volume of Das Kapital; but his words could have been taken verbatim from this source, in which Marx explains the workings of ground rent and monopoly prices. Whenever there is a limited supply of some resource, for instance of land, Marx explains, the price of the product will rise high enough for the least efficient producer to make a profit. Producers on more fertile land or producers using more efficient machinery will pocket the difference between their own low production cost and the high production cost of the marginal producer. They may, however, not be able to keep it because the owner of the land will force them to yield it in the form of rent. The same goes for mines and,though Marx wrote before their existence, also for oil wells.

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