Saturday, May 10, 2008

The Oil Bubble

This testimony by Tyson Slocum before a Congressional Committee this past Tuesday is very long and may not hold the attention of my younger subscribers, distracted as they may be by their still roiling adolescent hormones. Ah, youth! But it is a very useful, informative piece and articulates most learnedly why the Oil Companies are ruthless, evil, lying fat bastards. I suspect most of the people reading this already have intuited as much, but it is very important to support gut intuition with cogent argument if only to have a comeback for some idolater of Milton Friedman when he tells you with self-satisfied smugness that you obviously do not know the basics of the most rudimentary workings of the free market.

Yes, well Freedman's notion of freedom was "without rules" as in anarchy, and any good Catholic philosopher (this category excludes obviously Richard John Neuhaus, George Weigel, and Michael Novak) knows that anarchy does not bring with it true freedom, but only the brutal dominance of the strong over the weak. And this is more or less the upshot of Mr. Slocum's testimony above. The deregulation of the oil business has allowed the big companies to wipe out the small ones, and now they are basically bottlenecking the supply of gas to drive the prices up. If the lovers of Adam Smith want a truly competitive market, then they have to quit singing paeans to the Invisible Hand--which is hardly invisible and more like a great, big brawling fist--and realize that true competition requires rules.

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