Prices

As oil and gasoline prices begin their annual rite of spring, I am waiting for another rite that occurs among media pundits and some economists—who ought to know better. That particular ritual is the accusation levied against oil companies that they are "manipulating the market" in order to force up prices. Like the oil companies two decades ago and electricity producers and distributors during the California crisis, the mantra is going to be repeated ad nauseum, "They are manipulating the market. That is why prices are increasing."

In deregulating its power system, California seems to have made every mistake possible, writes William Anderson. For starters, it forced utilities to buy power at market rates while capping what they could charge their retail customers. This devastated the utilities. It also sent exactly the wrong signal to consumers, who had no incentive to conserve.

Individuals and foundations have sunk millions of dollars into D.C. "think tanks" and seminars, writes William Anderson, in hopes of teaching economics to those who are in positions of political leadership. Lest we be tempted to think this is working, read the latest U.S. Senate "investigative report" on oil prices. The political classes and their media allies have cooked up yet another conspiracy theory on the evils of private enterprise.

It is this economic law of exchange—not bombs, government spending, regulations, loose credit from the Fed, or stock-market scams—that is the source of wealth, health, and security in our world. Politicians care nothing about it because voluntarism is not what they are about. But economic law always has its revenge. It brought down the Soviet Union, and it will do the same to any state or institution that believes itself exempt.

A new study has been seized upon by proponents as a "proof text" against critics of living-wage laws. The success claimed for such policies by that study, however, is, in fact, far less than implied by the innumerable "Living Wage Laws Reduce Poverty" stories it has spawned. At most, the study only shows that some low-income workers may gain more than other low-income workers lose.

Charging $4, $5, or even $100 for a gallon of gasoline is not a crime; rather, it is a logical response to what buyers and sellers perceive to be the current market situation.  

Like control over consumer goods in the former Soviet Union, water in Canada is subject to strict state control.

Doctors and patients fed up with the current medical system are negotiating something entirely new, and the AMA is very unhappy. 

Recorded at Mises University 2001.

The Hirohito gold coin was fixed at a very high legal-tender value in terms of yen. Then the price of gold fell.