Horse, Ravine, Economy: See the Connection?
Chris Wallace of Fox News Sunday interviewed senators Byron Dorgan (D, ND) and Kay Bailey Hutchison (R, TX) Sunday about high gas prices and domestic oil production–the transcript is available here. Everyone in touch with reality (a handful of people, by last count) knows that the price of any product in an even minimally free market is directly related to the ratio of demand to supply. The higher the demand and lower the supply, the higher the price.
So the two most direct routes to lower gas prices are (a) imposing despotic restrictions on consumption and (b) increasing supply. Since (a) is still a degree or two too admittedly Marxist even for most people in congress, the focus turns instead to (b); that is, the attention turns to increasing the amount of oil available to be refined into gasoline. All of those things are good and fine, and they are the reason both Dorgan and Hutchison express the need for increased production–albeit with possibly different levels of sincerity.
But here come the problems. Increasing production means drilling where it is not done now. That fact means environmentalism (which is a political movement, not an ideology) can insert its anti-capitalism (aka anti-free-market-ism) into the picture. It also means politicians looking for a support base can use environmentalism as a justification for holding a position which serves no real purpose other than making their existence appear to be somehow significant and beneficial. In reality, their position is defined in toto by the need to disagree with their opposition. That their opposition happens to support the free market means they happen to oppose it, even when it is against all rationality. So Dorgan can claim to support increased production but oppose drilling in the Alaska National Wildlife Refuge, even though ten billion barrels of oil are there waiting to be harvested. And he can claim to support increased production but know it will not happen since his party stopped a bill which would have given states incentives to allow drilling for offshore oil (incentives, by the way, which are actually simply the federal government allowing supposedly sovereign states to collect the benefit of productivity in their own supposed dominions.)
Unfortunately, the whole dispute takes place miles from where the federal government ought to be debating. The only justifiable and positively meaningful role of government in the economy is to ensure an even playing field for all participants.
Consider the ideological equivalent from a Christian perspective. The prayer of Christians for those in government is not that they will promote Christianity. Christianity does not need government advocacy. The prayer of Christians for government is apparently simply that they will allow believers to live a “quiet and peaceable life in all godliness and honesty” according to the first few verses of 1 Timothy 2. Christianity does not seek an advantage in the marketplace of ideas. The advantage of Christianity is its truth, practicality, and power. Given a level playing field, Christianity will do fine ideologically. And constitutionally, the U.S. government is designed to function perfectly toward that end. It serves to make sure that laws enforce neither Christian ideas (as Christian, that is) nor anti-Christian ideas. But that constitutional role is perfect from the perspective of anyone who believes the best ideas will win out in the end.
The same point applies economically. The federal government ought not restrict drilling, nor impose it, nor even incentivize companies to do it. But what they ought to do is so far removed from the current place of government that it almost sounds ludicrous. They ought simply to be ensuring that every company interested in investing in the production of oil, or the development of alternative energy, is free from pressures immune to market forces–free, that is, from the pressure of monopolies or of collusive trade practices; and certainly free from the pressure of governments uninterested in maintaining their citizens’ freedoms.
One of very few times I have ridden a horse, I and the friend who took me riding came to a very steep ravine. My friend’s instruction for clearing the ravine was simple: “Give her her head.”
“Huh?” I said.
“Let the reins totally loose so she has freedom to move her head however she wants and she’ll run you right through the ravine with no problem.”
And she did.
If I can ride a horse through a ravine without falling off, maybe even a congress predicted to be more rein-yanking than ever after the next round of elections could actually back off and let her go. She’ll take the economy right through the ravine and out the other side if they do. It’s what free markets do!
I agree completely. Has there ever been a situation in which government restriction or incentivising of entities in the private economy has had proven, positive long-term results?
The closest I can think of is the new deal. However, I think it can be argued that other factors were responsible for re-stablizing the US economy at the time… WWII in particular. Furthermore, the current state of welfare/social secturity is hardly a compliment to Roosevelt’s ambitious plan.
I used to work as an oil rig hand. My boss (the owner of the oil/gas company) told me that if the government would lift restrictions, the private sector would fund, develop and impliment oil production and refining on such a scale that prices would plummet and stabalize… wholly apart from government funding/aid. He also told me that this would be done with little effect on natural environment. In fact, when I worked for him, I remember the extreme caution we took in preserving nature around every well site. Just a thought.