By Jack Pearce

A generational change in leadership in one of the few surviving monarchies has brought into play an ambitious young prince who has proposed a substantial economic and government reform program for Saudi Arabia, at a time when one of the periodic global oil price pinches has clashed with a generous citizen entitlement program for a  burgeoning, heavily youthful population, to produce well-founded projections of considerable difficulty in maintaining fiscal and financial stability in this important, but antique, Middle Eastern country.[1]

The reform program, based on an analysis by a competent Western consulting firm, MacKenzie Global Institute, is technically and organizationally sound in concept. It projects substantially upgrading education in the Kingdom and orienting it to current and prospective economic needs, exploiting mineral resources other than oil, encouraging small and medium sized businesses, encouraging regional trade, professionalizing government services, transparency in the government and society as a whole, encouraging foreign investment, bringing  into productive employment much more of the population, including particularly women and young people,  encouraging tourism and other forms of access to the society, relying less on government cradle to grave supports for the population and a government directed economy and more on a larger and more vigorous ‘private sector’ with higher levels of productivity based on better citizen skills, investment, and world-competitive organizations.  

Reactions to the recently announced program, entitled Vision 2030, have ranged from recognition of worthy objectives and hopes for success to considerable skepticism about feasibility.

Some of the skepticism about feasibility relates to the mismatch between the projections of substantial deficits in nearby years and the necessarily long time required to bring into fruitful actuality such a broad range of major economic, industrial, and governmental transformations.

To this observer, there is a great deal of merit in this perspective. Given MGI’s analyses, economic crunches seem likely before any such broad program could, with the best of intentions, and with vigorous pursuit, yield major improvements in such basic factors as population skills, modern commercial and industrial organizations, and efficient governance.  This could impose difficulties and uncertainties in carrying through the reforms, as well as disappointment in the citizenry.

Some of the skepticism comes from people inside and outside Saudi Arabia who have seen more than one bold and appealing plan proposed but not realized over preceding decades.

Moody’s, a United States financial rating firm, has referred to the institutional weakness of Saudi Arabia, in recently down rating their assessment of the financial soundness of the country. Though the country has improved its institutional practices somewhat, lack of openness, clarity, and predictability remain significant problems. This obviously clashes with the hopeful and ambitious agenda embodied in the Vision 2030 projections.

And some of the skepticism relates to more basic factors. The program seems to envisage modern governance perspectives and practices without reforming the basic institutions of governance in the kingdom -- that is, a tightly controlling monarchy with members numbering in the thousands having extensive entitlements which they would be loath to yield, bolstered by and bolstering a clerical establishment inimical to more workplace and social freedom for women, freedom of and diversity of intellectual development and expression, and the social mores of the bulk of the planet’s population. One critic has crystallized this perspective by asserting that the reform program proposes a society which you cannot have with a repressive and exploitative monarchy and religion governing it.

Possibly unintentionally, the MGI analysis of Saudi Arabia’s situation reveals that that a major part of its current quandary results primarily from just these institutions.

There has been a stream of thought to the effect that an enlightened monarchy secure in its future would invest heavily in the skills and industries of its population, the better to harvest tax yields therefrom. But the MGI analysis, and many others, point out that the Kingdom has put its citizenry on a stipend, educated citizens for social conformance rather than productivity, prevented half its population from engaging in the labor force, and exploited the world’s labor markets to get its extraordinary Royal standards of living at minimal cost. Now the Family cannot maintain the stipend, and the citizenry has neither the skills nor the industrial establishment to maintain and increase its standard of living by higher productivity.

The religious establishment has collaborated in this program, while espousing a form of social organization medieval in concept and form (see ISIS). The doctrines of this clerical establishment have caused some disruption and major concern in Euro-American politics. The failure of the Saudi regime to develop the skills of its population to levels competitive in the world workplace is matched or exceeded by the restrictions on learning and workplace and social participation inherent in the Wahhabi restrictions of females, inside and outside of Saudi Arabia.

The reform program proposed by Mohammed Bin Salman would, implicitly, by encouraging open access to opportunities in the economy, competitiveness within the economy, freedom of citizen enterprise, and transparency as to economic and political program, curb Royal entitlements.  But many doubt that the Royal Family, and those economic agents closely dependent upon them, will go on a diet, either as to economic and social preferences, or as to sharing governance power.

Also, if the perceived importance of the clerical establishment to the rulers of Saudi Arabia leads to a continued export of an ideology inimical to the forms of civilization extant in other countries, this will be a source of conflict with western societies to which the Saudis look for technologies, protection, and investment opportunities.

All this has been commented upon, by several parties, in published reactions to the Saudi reform proposals. The purpose of this article is to explore what the concepts of non-equilibrium thermodynamics suggest as to the origin and resolution of a problem such as this.

First, the framework of thought.  In brief overview, non-equilibrium thermodynamics in recent form suggests that all ordered phenomena embody energy flow. The ‘order’ consists of regularities, or correlations, which shape the energy flows. The resultant, correlated states embody what we consider as structure, or order, in the Universe.

In human societies, this indicates that each of the humans, and each grouping of humans, intakes energy, in its function dissipates energy, and may or may not reproduce. If it reproduces it may be considered a life form, if not it may be considered something less --  a social grouping, or society short of regular, continuous lineage production.

This all proceeds in a hierarchical fashion -- cells make humans, humans make social groupings, tribes (and other human groupings), may make a nation, nations may make a global society.

The logic of this indicates that humans, and human institutions, must, to maintain existence as we understand existence, be so formed as to have ongoing energy supplies, and have a format, or shape, or structure,  which  ‘survives’, or is stable, in its setting.

The logic of this construct has some affinity with or correspondence with elements of, Karl Marx’s concept of ‘means of production in an industrial economy, but is more generalized.

Marx, born into the development of an industrializing economy and society, saw concentrations of resources, or energy flows, in complex, large scale processes employing factories, mines, and distribution systems. Marx saw this process as pervasively shaping human societies, and in the process producing specializations and differentials in the resources available to specialized participants (or ‘classes’). However, this concept allows broadening of that perspective in terms of the organization of the human elements in such large scale, complex energy flow systems, and provides a footing for understanding why such complex human organizational systems have evolved.

Two other characteristics of thermodynamic ordering processes need note here. One is that all ordering processes are necessarily combinatorial. Another is that even as correlation of elements produce aggregates and differentials, there is an ubiquitous process of equilibration in the universe which tends to reduce such differentials -- e.g. differentials of heat, and other forms of energy potential. Some aspects of this have been characterized as ‘maximum entropy production’. But also, as many observers have noted, the equalization process itself often tends to be done in an ordered fashion (e.g. benard cells, and Morowitz and Smith have suggested that life itself is a product of channeling energy ‘between  … different potentials’.

Now, how does all this relate to how we got to where we are in the Middle East, and the organization of Saudi Arabia going forward from today?

As to how we got here, in the process of developing large scale ‘industrialized’ societies, leading organization centers - like Britain and the United States --  assiduously sought out energy stores, or potentials, created by past life systems. Oil -- liquid hydrocarbons -- is an uniquely dense, storable, transportable, and usable energy store. The Persian Gulf happens to be the site of this Earth’s largest scale, most easily accessible energy stores in the form of oil. 

The result has been a far flung, complex set of systems to distribute, or dissipate, in a channeled fashion, that energy potential -- drilling rigs, pipelines, refineries,  transport ships,  and warships and warplanes to guard and assure regularity in the complex. This complex spans all the oil producing political venues in the Persian Gulf.

There also has been considerable tension between the industrial countries and those having the oil. Some of the results have been  intervention in, or attempted influence upon,  the forms and operations of the pre-existing social organizations by the ‘industrializing’ Euro Americans, which these ‘colonial powers’ encountered while seeking  and developing the oil.   

The human societies created in the Middle East during, and reflecting, the ‘agricultural era’ - that is, systematic harvesting of  biologically entrained  photosynthetic energy -- tended to be lineage dominated hierarchies built upon tribal lineage systems. Some of the denser and highly organized systems, such as the Egyptian river- based system and the Ottoman Empire, and the earlier Persian empires, had become highly centralized and covered extensive geographic scope. The use of physical force assumed a prominent role in organizing and maintaining such systems.

Another way of inducing group-effective organization, by custom, collective assemblage, and persuasion, has been what has been termed religion. Often, in ‘Western’ societies, the  methods of force, and also the practices of custom and persuasion --  ‘church and state’ -- have been allied.

However, in the ‘industrial’, fossil energy fed, era, the religious component has often been partially superseded by the derivation of formalized codes, either by collective assemblies, a centralized actor  (we tend to term such either executives or despots, depending on the relationship to the assemblies), or a combination of the two. We call the resultant societies ‘secular.’

The ‘nation states’ emergence in the hyper-organized industrial era made possible by increased energy flows have become highly proceduralized, specialized, and complex. They combine hierarchies, ‘laws’, markets, formalized triggering of resource allocations by highly organized ‘financial’ systems, collective support or service mechanisms (e.g. medical care, education, intellectual exploration (science and technology), food and care for society members in distress, and ‘utilities’) highly organized physical force systems (policing and ‘armed forces’) and a wide variety of specialized personnel and physical systems. 

In what we ‘Westerners’ (on the Eurasian land mass) tend to call advanced societies, we have come to conceptualize this sort of social organization in terms of ‘the rule of law’ derived by consensual means, or ‘democracy’, executed by an elected and rule-constrained central organizer, and monitored by a ‘judicial’ branch of governance.

As the energy intensive, administratively effective, and forceful ‘Western’ forms of organization impinged upon the agricultural era,  Middle Eastern forms of organization, many within these societies have wished to emulate what has been so demonstratively effective, if not sometimes overwhelming, forms of organization. This notably occurred in the venues we now call Turkey, Iran, and Egypt.  (I am now excluding other variations in organization, such as in China and Russia, which become ‘secular’ but have not fully adopted ‘democracy.)

However, some of these Middle Eastern polities, notably Turkey and Iran, now, in the 21st century display considerable tension between the older, religious forms of ‘authority’, or influence, and the authoritarian leader form of organization, on the one hand, and democratic, ‘rule of law’ systems on the other.  Egypt combines weak democratic organizations with an influential religious establishment and a highly autocratic Executive, in a highly centralized and repressive system dominated by military elite.

Saudi Arabia and nearby smaller entities (the Gulf monarchies) -- have been unique in attempting to take advantage of the highly organized uses of the energy available to them (‘trade, commerce and industrialization’) while maintaining, especially in Saudi Arabia, the dynastic form of state and an highly restrictive religious system noted for extensive specification of daily activity and rigorous male-centered control of female sexuality.

A concord between the Americans and the Saudi rulers, in contrast to the conflict between the British and Persian systems seen in Iran, seems to have facilitated this survival of local forms, thus far. But the United States effort to open up the remainder of the Persian Gulf countries to global economic and cultural systems, and its putting a price cap on OPEC output by alternative technologies, has signaled that the US may see Saudi Arabia as ‘just another oil supplier’, rather than a strategic cornerstone in its MENA relationships, not necessitating maintenance of Royal control at all costs. (This does not mean that the United States would abandon its protection of Saudi Arabia from outside aggression, as the US wants to see a peaceful and producing Middle East, and avoid any monopoly of oil supplies there.)

The Islamic religious system originated in Arabia, and the rulers of that polity actively seek to maintain influence over both their own area and other societies. Unfortunately, in the view of many, the Saudi variant of Islam embodies a highly restrictive and xenophobic format, which, in its most austere form, seems incompatible with current forms of social, including State, organization.

Some of the polities in the area, such as Dubai and the ‘emirates’ have made somewhat successful adaptations of their dynastic systems thus far, with oil-energy lifting living standards for all in within them. But the initiatives of Mohammad Bin Salman in Saudi Arabia project the most bold and extensive forms of ‘western’ industrial and commercial organization, while maintaining dynastic control and adhering to inherited religious norms, or constraints. 

So we are up to date on context, using non-equilibrium thermodynamic forms of thinking to characterize the state of affairs. In the non-equilibrium thermodynamic framework of thought, what is going to happen next? 

I offer the following suggestions.

First, the hydrocarbons are going to move to areas of energy use around the globe. Human ‘political’ forms of organization will be altered and adapted, if necessary, to allow this to happen.

If Saudi Arabia’s dynasty cannot manage the transformation of Saudi Arabia’s internal affairs in sustainable, stable formats to allow this to happen, the organization of that State will be altered to facilitate the energy flow. The reorganization of the society might be perceived as coming by means of internal initiatives, or external initiatives, or some combination of the two. But thermodynamics will rule.

Secondly, it would clearly be in the best interests of the human population of the area if something like the proposals of the young Prince for more modern and well adapted forms of education were adopted and pursued by ruler and citizen alike. If the area could be safe for international investment flows embodying state of the art ‘private’ and public organizations to flourish, if women and hosts of young people could be better enabled to participate in social affairs and commerce, and if other local ‘resources’ -- minerals, solar energy, etc. -- could be developed, there could be collective gain.  Presumably there will be ‘pressures’, or inclinations, for such things to evolve.

But I would support the observations or suggestions of many outside Saudi Arabia that for these things to happen, royal privileges and religious constraints must necessarily yield, whether by brittle breakage or plastic transformation. 

Given the push-back, or ‘blow back’,  and internal disorganization which have resulted from Euro-American attempts forcefully and commercially to reorganize Middle Eastern social organization  (read, Iran over the decades and Iraq more recently) there seems likely to be a tendency to let the internal systems evolve, imposing, for the most part, no more than inducements and external constraints. 

However, we cannot expect Europe and the US to be entirely hands-off. Euro-America seems to be invested in preventing any monopolization of hydrocarbon supplies in the Persian Gulf area. Such a monopoly would entail constraints on energy flow and massive wealth transfers from other societies.

And Europe and America seek sufficient peace and prosperity in the area to keep the whole supply construct functioning. Thus one must expect ‘western’ action, with Indian and Chinese complicit acquiescence, to keep open the sea lanes in and near the Persian Gulf, and keep pipelines flowing in the area. 

From the ‘Western’ and global points of view, as to Saudi Arabia, the best outcome would be lower risk, lower breakage plastic deformation, or reorganization, to allow continuous oil supply and also needed governance regularity and professionalization.

The Vision 2030 proposals are consistent with the plastic deformation, or reformation, approach. Visibly greater economic opportunities for non-royals, rigorously honest and regular systems for making available economic opportunities, consistent accommodation to the needs of external actors and investors, education which emphasizes social conformance and xenophobia less and intellectual and practical scope more, would all be helpful  in terms of improving the Saudi Arabian governance system and, importantly  encouraging the population to believe their lot will be improving, even if perhaps after some lean years.

A movement toward a constitutional monarchy, giving citizens access to some degree of ‘ownership’ in the society, favored by a minority wing of the Royal Family, could be a powerful signal of ability and willingness to adapt.

Reduction of constraints upon women, on such matters as, but certainly not limited to, the ability to drive cars, would also be a powerful signal of ability and willingness to adapt.

And certainly, evidence of follow through on this grand plan would tend to produce economic gains and elicit public support, while evidence of little or none would tend to feed disaffection from the population. If non-royals show up owning fast food enterprises, frequently on the Boards of significant corporations, winners in competitively bid contracts, and in general rising in economic and social circles, then the public will have grounds for maintaining trust in its leadership.

But, of course, if such things do not visibly occur, then the Saudi public would likely view all this Vision as just another sound and light show, intended only to maintain the status quo of privileges of the Royal family and its economic attendants. 

So, what if  Saudi Arabia’s agro-era, dynastic, and religious institutions cannot cope, there is little or no actual reform, and this results in brittle breakage of the Arabian society, in a sharply transformational event?

This might seem unlikely. The incomes of the Saudi citizenry have risen considerably in recent decades, and the economy of the country is well above ‘third world’ levels. MGI tabs Arabian per capita gdp levels as exceeding those of Korea and Portugal.

But we have seen disruptions in this geographic area before, and MGI has advised that if the Arabian population cannot become much more productive, from a combination of initiatives such as those they recommend, substantial reductions in the living standards in Arabia -- about 20%, with high youth unemployment -- seem to be on the near horizon.

Such a disappointment of hopes and expectations as to living standards, attended by visibly continuing coddling of the already entitled, in a world with contrasting prosperity, could be substantial motivation for citizen unrest and social, including governance, disturbance.  

In the event of sharp institutional breakage, in circumstances threatening major oil flow disruptions, one cannot exclude some form of collective external intervention in Saudi Arabia and the Persian Gulf, perhaps using American instrumentalities and the concord of the large oil consuming societies of India and China. That intervention might attempt to secure oil production facilities and influence governmental reorganization.  But we have learned much about the fragility of externally installed proxies, so the terms of any reorganization might be framed as trusteeship.

Putting aside this possibility for now, in the event of an internal ‘revolution’ calling for a major break with the traditions of royal rule and great clerical influence, the participants inside Saudi Arabia would need to find a path different from Egypt’s.

In Egypt, a young population sought a sharp break with authoritarian presidential rule, in favor of democratic rule, but in the following political competition was submerged by the combination of religion oriented and military rule oriented groupings. The net result was a quick loop back to what existed before. In general, long established governance patterns are hard to break: they have an inertial force.

Thus, in Saudi Arabia, participants in a widespread reform movement, absent outside intervention, would be faced with creating a viable path to more democratic rule and undercutting State support for Wahhabism. Again, some royalty willing to negotiate a constitutional monarchy and a sharp reduction in the Wahhabi doctrines might provide a workable way station. But we may not be able to predict or prescribe just how such a rearrangement, or others, might be negotiated.

Taking into account both paths briefly discussed here, if a reform movement in Saudi Arabia impinged greatly on oil supply, there would be sharp acceleration of the exploitation of alternatives to the Saudi supply of about 10% of global oil production. ‘Fracking’ is a current example. And though the transition to ‘renewable’ energy supplies would be to some extent hindered by diminution of fossil fuels available to erect the new energy systems, the global public would have additional reason to pursue this necessary course of development.

As far as the particular interest of the Euro-American complex is concerned, a reformation of Saudi Arabia in terms which would sharply reduce revenues to the Wahhabi religious establishment and a diminution of its reactionary local and global influence, and produce more modern governance systems, would be exceeding welcome, whether that occurred by gradual means or a successful ‘revolution’ resulting in a functional state.

In the net, for now, there is reason to welcome -- indeed, to applaud -- a young monarch’s realization of a need for widespread change, or modernization, in the Arabian society, even if his lineage is substantially responsible for the conditions which now require change.

As events unfold, the world will observe how much he and followers can accomplish, and how much this young prince will yield, and induce his family and their enablers to yield, in privilege and control.

But we had best keep our hydrocarbon energy technologies sharp and agile, while urgently developing successor, ‘sustainable’ or ‘renewable’, energy supplies.  

Industrialization has been hard on dynasties.  This one may not survive. There is a good argument that it should not, given its medieval constraints and export of a reactionary ideology stifling one half of affected populations. We need to be prepared if this one breaks.

Jack Pearce has served as Assistant Chief of United States Justice Department’s Antitrust Division's ‘Public Counsel and Legislative’ Section, Assistant General Counsel of Agency for International Development with responsibilities in Near East, South Asia sector, National Institute of Public Affairs fellowship at Cornell, Deputy General Counsel, White House Office of Consumer Affairs, law practice relating to pro-competitive regulatory reform, and innovator of virtual office system for attorneys and others.

[1] In service of full disclosure, this author represented a Saudi Sheikh, named Kofide, as an attorney in dealing with workmen’s compensation law applicability to American citizens working in Saudi Arabia. I found this individual to be committed to building hospitals for his people, and entirely congenial and authentic in our relationship. I also found some Americans who worked for him to be unconscionably condescending and parochial in their outlook.