The Morality of Gas Price Spikes

In a few places around the country, gas prices have shot through the roof, in large part because of rumors that gas prices were shooting through the roof. Folks are scrambling to get gas, drastically increasing the demand for a product that is in limited (if re-fuelable) supply.

Some folks are decrying this as profiteering, declaring it to be immoral. No folks, it isn’t immoral — it’s capitalism, and this is how we keep the supplies flowing! This is how we ensure — without government intervention — that folks have a chance to buy gas. It is a transaction between two free-willed individuals, without the threat of force. It is the essence of morality.

Consider this: every time price controls are implemented by the government scarcity follows. Why? Well think about it — let’s say you’re Joe Smith, and you see everyone scrambling for gas. You see that gas is an astronomical $10 a gallon, which means it might cost you over a hundred dollars to fill your tank. Thus, you have a reason to only buy the gas you need — and if you don’t’ have enough, then you’ll need to scrape up some cash from some friends (or the couch). Some folks might not be able to afford the gas, but everyone would probably have a chance to buy the gas.

Now consider what happens if the government slaps a ceiling on the price of gas. Joe Smith arrives at the pump, and sees that gas is only $1 a gallon. (this is, of course, an emergency, so the government benevolently lowers the current price at the pump) So he fills up on it. Hell, it’s so cheap, he decides to fill up a few of his extra gas tanks. The next 10 people do the same, and in no time flat, the gas runs out, and everyone else is screwed. They don’t even have a chance to buy the gas — not even if they pooled their resources and slapped down $1000 to get enough to drive a family member to the hospital.

Don’t believe me? Move to California.

In a free capitalist society, the “moral” price of gas — or any other commodity — is whatever folks pay for it. It is not, however, moral to pull out a gun, point it at a person’s head and say “this is how much you will sell your gas for.” That’s exactly what happens if the government steps in and starts setting prices. Some will say there is no literal gun — the government is merely passing laws, but always remember those laws are backed up by the sanctioned use of force. It may appear as fines or jail time, but if someone refuses to pay or be imprisoned, the government will take them down.

Pointing guns and people and making threats is not how a moral government and society works. Rule by threats and terror is how our enemies — like those who destroyed the World Trade Center — work. We should not sink to their level by imposing price controls or any other new dictatorial measures.

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