Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Meet the Peter the Great of Saudi Arabia

The must disruptive person in the Middle East is not an ISIS terrorist – instead it is Prince Mohammed bin Salman of Saudi Arabia. Prince Mohammed might disrupt his country in the same way Peter the Great transformed Russia.

Around 330 years ago, Russia was the sick man of Europe, a backwards but resource rich nation misruled by a corrupt aristocracy and dominated by a reactionary clergy. At that time, Russia was ignored by Europe’s great powers because its military was a joke, and its people lived in poverty.

All that changed when an aggressive and energetic radical named Peter became Czar and literally dragged the empire into the modern age. By the time Peter’s reign ended Russia was a great power; with a modern army and navy, and a leading role in Europe. Russian society had been completely disrupted and modernized.

Bronze Statue of Peter the Great in St. Petersburg.
Bronze Statue of Peter the Great in St. Petersburg.

The Man Who is Disrupting Saudi Arabia

Prince Mohammad; the deputy crown prince, is trying to do the same thing in Saudi Arabia today. He has done the unthinkable in the kingdom, cutting the budget, raising taxes, cutting civil servants’ pay, proposed the sale of the national oil company and talks about ending the country’s dependence on oil.

Like Peter the Great, Mohammad is also trying to liberalize civil society and restrict the power of the clergy. He has also involved Saudi Arabia in a bloody and controversial war in Yemen that might explode into a regional conflict. The prince has also talked of a new Saudi foreign policy independent of the United States, and he wants an Islamic military alliance similar to NATO.

Prince Mohammad visits Peter's modern successor Vladimir Putin.
Prince Mohammad visits Peter’s modern successor Vladimir Putin.

Salman is also trying to privatize Saudi Arabia’s national oil company Aramco with the largest initial public offering possibly worth $2 trillion. The idea is to give the Kingdom more control over oil and the ability to invest in next generation technologies that might give Saudis a life after oil.

Mohammad’s reforms, like Peter the Great’s are risky and certain to trigger a violent reaction. Students of Russian history will remember that the Czar massacred thousands of rebels and put dozens of people including his son to death.

The prince’s position is far shakier than his Russian predecessor. Peter was Czar and absolute monarch of Russia. Mohammad is simply deputy crown prince, third in line to the throne after his cousin Crown Prince Mohammed bin Nayef.

The ingredients for a civil war between bin Nayef and bin Salman’s forces are certainly there. As interior minister the Crown Prince controls the security forces, as defense minister the deputy crown prince controls the military.

Destabilizing Saudi Arabia

Even if bin Salman prevails he might totally destabilize Saudi Arabia by setting up an absolute monarchy like that of the Shah in Iran. The Shah’s unpopular reforms and lavish lifestyle triggered the Iranian Revolution and the creation of the Islamic Republic.


The situation in Saudi Arabia will be further destabilized by the collapse of oil prices; which has forced Salman to raise taxes and cut the budget. If oil prices and the demand for black gold keep falling, the kingdom might face bankruptcy and third class power status within a generation. Unless Prince Mohammad succeeds in his plans to give Saudi Arabia a modern economy.

It is not clear if Prince Mohammad ibn Salman will succeed but one thing is clear. Saudi Arabia is going to be a very different place in a few years and what happens there will affect the entire world.