Vanderbilt Journal of Transnational Law

First Page



We live in tumultuous times. Whether measured on a scale of millennia, of centuries, or of generations, our lifetime's segment of the graph of world history is marking giddy ascents, harrowing declines, and abrupt, unbridgeable discontinuities.

On a millennial scale we are entering the twilight of those five astounding centuries of Western leadership that began with the Renaissance. The flags of empire, long banished from the Americas, have now been struck in Asia and Africa as well, and flutter quaintly over only a dwindling handful of enclaves and outposts. Islam has awakened from her sleep of seven hundred years and moves impetuously toward a bold new destiny. In the East two great new nations, each born in explicit repudiation of the Christian, capitalistic, parliamentary West, are shouldering out the sky.

The pattern is repeated in a chart of history plotted on a scale of centuries. Economic power is hemorrhaging from the nations which consume energy to those that produce it. Hegemony is shifting among the industrialized consumer states themselves, and they are hard put to construct a monetary mechanism that can accommodate such changes as the decline of the United States, the resurgence of Japan, and the eclipse of Britain. Meanwhile the Marxist superpowers, winning their battles by proxy and their wars by default, lord their strength for the anticipated darkness of the West. And in every country--Marxist or capitalist, agricultural or industrial--the orderly fabric of Nineteenth Century life is fraying under the abrasions of rising population, urban concentration, and the insatiable economic expectations of the proletariat.

On a scale of generations the graph is no less jagged. A world epidemic of inexpensive mass communication has made fathers alien to their sons, accelerating exponentially the revolution of values implicit in the millennial and centennial transformations through which we move. The young adult of today walks the streets of his city--be it London, Tokyo, Houston, Lagos, or Cairo- impervious to the civilization that built it, as insensitive to his culture as was Mersault of The Stranger, going remorselessly to the guillotine in Algiers. If that young adult is a woman her sense of alienation, nagged by the subtle paranoia of the feminist movement, is even more pronounced.

Islam, Marxism, alienation, the decline of the West: What have these to do with oil operations in Latin America? Only everything. The salient fact of the 1970's is change. For international business, change means that private foreign investment is no longer universally welcomed. The snug little Victorian world of 1815-1914 is dead; its expansive Yankee afterglow of 1918-1965 is dying. Especially in oil and particularly in Latin America the trend is to circumscribe foreign equity participation narrowly or to prohibit it altogether.

The purpose of this paper is to consider foreign private investment in Latin American oil in terms of its past contributions, its present posture, two myths that obscure it from our view, and a scenario for its possible future survival.