Don’t Blame Speculators for High Oil Prices
Monday, April 7th, 2008 By Marc Kilmer
Economist Robert Murphy writes an excellent article over at the Library of Economics and Liberty that is a must-read for anyone who is interested in cutting through some of the misinformation that surrounds oil prices in politics and the media:
When oil prices hit record levels, many people look for a scapegoat, and hugely profitable oil companies are an easy target. Even so, the typical political “solutions” overlook the crucial role that market prices play in resource allocation, both among competing uses in different areas of the world today and among competing uses in different time periods (i.e. today versus the future). Contrary to popular belief, it is private sector professionals who will ensure an adequate supply of oil and other commodities for our descendants. It is the politicians – not the speculators – who are notoriously shortsighted and threaten to cripple our energy supply.
Tags: Economy
