June 2nd 2008, by Ken Livingstone
Boris Johnson’s cancellation of London’s oil agreement with Venezuela is a piece of rightwing dogmatism that is equally costly to the people of London and Caracas. The agreement was that Londoners on income support received half-price bus travel, subsidised via cheap Venezuelan oil, in return for London providing transport, planning and other expertise to Venezuela.
The basic principle of London-Caracas agreement was simple, reasonable and indeed a rather textbook illustration of relative advantage in foreign trade. Each side provided the other with that in which they are rich, and which for them is therefore relatively cheap – oil, on one hand, and the expertise in managing a modern advanced city on the other – in return for something which was scarce, and therefore relatively expensive, for the other side. Continue reading