by Jim Davies, 11/7/2011
So far my reviews of the "Issues" raised in Ron Paul's campaign for President have shown a good, pro-freedom perspective in most of them, a superb one sometimes, and abysmally poor ones twice. Today we'll look at his stance on Energy, and I'm happy to report it's very good.
His page begins "The free market not government is the solution to Americas energy needs" and of course he's 100% right. The free market is the solution to all our needs, including the need to reduce abortions and the need to optimize labor across national boundaries. It's too bad he isn't consistent.
I confess to ignorance about the nature of the cartel agreement, if any, among the world's major oil companies. It's widely rumored that there is one, and as Adam Smith anticipated, when those businessmen get together, it is unlikely to be for our benefit. But only government licensure can enable them to exclude smaller, nimbler competitors; and as Ron's web page indicates, there is an abundance of such regulation. When it is removed, a free market will operate and we shall see some real competition and resulting optimal prices.
So yes, the removal of drilling restrictions, of the Federal gas tax, obstacles to the use of coal and nukes and pollution "licenses" as he offers, will all help. I'm not so sure about the last item - tax credits for developing alternative technologies - for that would be another government intrusion into the free market, though of course a tax cut for any reason is always goodness. If government will just get out of the way, neither hindering nor helping, the energy market will optimize supply - not because they are nice guys (though they may be) but because they are greedy, and the only way to attract money in a free market is to supply what buyers want. It's an elementary principle of economics that Adam Smith published in 1776, but the government industry hasn't caught on yet.
But, but... some will say, Surely we don't want lower fuel prices, for that would exhaust supplies faster! And then what will our children do?
What's truly needed is optimal pricing, and I think those would, initially, be significantly lower. "Optimal" means the price that equitably balances the desires of buyer and seller, both. There is only one way in which pricing can be optimal, and that is to allow a completely free market to operate - without any intereference to help or hinder any of its participants. Given a little time that will mean that competitors arise, to challenge any cartel that may currently exist; for cartels and monopolies can survive only with the active help of government force.
As supplies under optimal pricing get used up, the prospect of increased free-market prices will then provide its own incentive to discover yet more efficient ways of producing energy. There is an abundance of possible ways, already known; the most recent I noticed was to tap the heat generated by hydrothermal vents - not cheap or imminent, but feasible once the natural, market price of energy has risen high enough to make the tapping profitable. There is no energy shortage, on the Planet Earth. While a free market operates, there never will be.
Ron Paul promises "As President, [he] will lead the fight to" do the five things listed, and once again we encounter the question of how much a pro-freedom President can do, assuming a hostile Congress. I'm not sure he can do any of them, on his own. If not, it's one more indication that freedom cannot be won by political means; it has to be taken. But meanwhile, if Paul wins the White House, perhaps he can make our lives easier by achieving just some of these fine objectives.