(Sorry, that’s as clever a title as I could muster). The rationing of oil. Michael Ruppert, writing in From the Wilderness, tells us that the International Energy Agency has “dusted off plans for rationing to be imposed (with the full authority of government and the UN) in nations which had signed the original UN treaty in 1974 or joined later.”
These nations include the U.S., the U.K., Canada, Japan, Australia, New Zealand, and most of continental Europe. Not China (who are the socialists, again? I get so confused). While Ruppert doesn’t like the plan’s particulars, he is a firm supporter of rationing:
“On the other hand, mandatory and enforced rationing might be the only way to penetrate a very thick American skull. We do reveal a bovine nature on occasion.” “So I think it’s time we all put rationing (serious rationing) on our schedule of upcoming events. “ “When? (Sigh). It could be as soon as this winter. I would say, of a certainty, no later than January or February 2007.”
Ruppert also reprints a Falls Church (VA) News-Press article by Tom Whipple which touts the idea:
“It has to come sooner or later. As oil becomes scarcer and scarcer and price rises higher and higher, pressures will grow for a formal allocation system. Rationing will come, if only to calm the havoc at the gas lines and the social upheavals that are bound to occur as long as rationing is only by price. “
This statement reveals a startling lack of economic understanding. It is not rationing by price which caused “havoc at the gas lines”! It was Nixon’s price controls. When you put a price ceiling in place, demand outstrips supply, causing a shortage. When prices are allowed to freely float, they rise in response to tightening supplies or increased demand. Consumers thus try to cut back on purchases, economizing where they can. Long lines are thus avoided. The price system is the most efficient allocation system ever invented, and we owe much of our material well-being to it. A warning to UK readers. Whipple writes (approvingly):
“Once again our friends in Europe , this time in Britain , appear to be out in front in thinking about this problem... “A couple of weeks ago, the British press reported that Her Majesty’s cabinet is considering a plan to ration energy consumption. The immediate reason for implementing such a system is to reduce the UK ‘s emission of greenhouse gases as required by the Kyoto Treaty. The plans authors, however, claim that if the proposal works, it will deal equally well with equitably allocating dwindling energy supplies caused by peak oil.”
By forcibly limiting energy usage, this plan will cause distortions in choices, and create inefficiencies for businesses. With the UK already in recession and the US likely to follow in another year or so, this is the last thing we need. The plan will also cause “black” (i.e. free) markets to spring up, making criminals out of ordinary people who are just trying trying to do business peacefully. Finally, like all such plans, there will be plenty of chances for the politically powerful to game the system, at the expense of average citizens.
