OPEC'S YEAR-END MEETING in Caracas has greatly increased the peril to which the soaring cost of oil will subject the world's economy. OPEC has not been able to stabilize oil prices, as some of its members had hoped to do. But it promises to increase massively the drain of wealth from every other country, and from every other kind of enterprise. The adjustment to the new price regime will be long and harsh. The direct costs -- the prices of gasoline and heating oil -- with be only the beginning of it.
Between last March and next January, the cost of imported oil will have at least doubled. The impact on the individual nations will be far more severe than that of the first great leap in prices, in the 1973-74 crisis. But that increase six years ago threw the world into the worst recession in a generation and left it with inflation rates that it has not yet brought under control. Governments around the world now confront the probability that the whole cycle will now begin to repeat itself.
Beyond that first shock of the new prices, the transition will mean far more than merely getting used to buying gasoline by the half-gallon. The Chrysler Corporation, now being rescued -- at least temporarily -- by act of Congress, is a victim of the high cost of gasoline. Chrysler is an early example of the enormously costly reorganization that will now have to go forward throughout the economy at an involuntarily rapid pace. Industries and families alike will be under rising pressures of cost to scrap old equipment -- production machinery, cars, furnaces, even buildings -- and replace them with more efficient alternatives. Money will be diverted from business profits and from private consumption into this enforced process of self-protection. Living standards will decline. Some jobs will disappear, and some employers. It will be an interesting experience, but don't expect it to be comfortable.
The greatest hardships will be imposed, as always, on the poorest countries. They are already suffering widespread damage from the rising cost of oil, and that damage will now increase. After the 1973-74 price increases, there was a fairly smooth recycling of funds through the big international banks. The OPEC countries put their swelling revenues into the banks and the banks lent those funds back to the poor countries. It worked nicely once -- but unfortunately it can't be repeated. The debtor countries are not capable of much more debt, and the banks are getting nervous about the magnitudes of even the present loans. Will the OPEC governments now lend directly to poor countries? That is their responsibility, but they show no inclination to meet it.
In this ominous prospect, there is at least one point of hope. In November, the United States' oil imports were lower than a year earlier by half a million barrels a day. That is a decline of 6.5 percent, a small amount compared with what's now necessary. But it comes after years of steady rises. Cutting back is the only way Americans can now protect themselves. They have now shown themselves that they are capable of it.