Adam Smith, the deadest man on the planet?
Among the many things that amuses me about health care reform debates is the insistence among alarmists that all government programs are inherently bad because they destroy the very competition necessary to contain costs. You have thought Adam Smith was directing the American economy to listen to the privatizing privateers predict the coming of socialism and soaring price doom and gloom. (Note to the privateers: Smith has been dead for 309 years and no economist seriously believes in 100% regulation-free markets any more.)
After I picked myself off the floor from my laughing fit I got in my car to run a few errands, one of which included filling the tank in preparation for driving to Newark airport on June 17, when Phoenix and I jet off to Scotland for a few weeks. As I made my way down King Street I had a capitalist’s dream of gasoline options: Mobil, Hess, Pride, Cumberland Farms, Sunoco…. But what happened to the free market? Everyone of them was priced at $2.49 per gallon of regular. Must be some mistake I thought. Since I was headed toward Amherst anyway I took a drive out Route 9, where I encountered numerous other choices, each at $2.49 except for one holdout who has asking four cents more. Amherst? $2.49 a gallon.
I’m not moaning about the price per se; in Scotland I'll pay more than triple this (though filling fuel-efficient tanks), but all of this makes me think that Adam Smith is among the deadest dead men on the planet. How can every station be charging exactly the same and why on earth is the price of oil going up in the first place when demand is down? Isn’t supply and demand supposed to be the “hidden hand” that dictates price? And shouldn’t gas stations be competing to drive down prices instead of up? Sure is a good thing the government doesn’t regulate prices, huh?
Luckily for me I have a Stop n’ Shop card that entitles me to knock five cents off every gallon I buy. That drove down the price to—you guessed it—$2.49 a gallon.
After I picked myself off the floor from my laughing fit I got in my car to run a few errands, one of which included filling the tank in preparation for driving to Newark airport on June 17, when Phoenix and I jet off to Scotland for a few weeks. As I made my way down King Street I had a capitalist’s dream of gasoline options: Mobil, Hess, Pride, Cumberland Farms, Sunoco…. But what happened to the free market? Everyone of them was priced at $2.49 per gallon of regular. Must be some mistake I thought. Since I was headed toward Amherst anyway I took a drive out Route 9, where I encountered numerous other choices, each at $2.49 except for one holdout who has asking four cents more. Amherst? $2.49 a gallon.
I’m not moaning about the price per se; in Scotland I'll pay more than triple this (though filling fuel-efficient tanks), but all of this makes me think that Adam Smith is among the deadest dead men on the planet. How can every station be charging exactly the same and why on earth is the price of oil going up in the first place when demand is down? Isn’t supply and demand supposed to be the “hidden hand” that dictates price? And shouldn’t gas stations be competing to drive down prices instead of up? Sure is a good thing the government doesn’t regulate prices, huh?
Luckily for me I have a Stop n’ Shop card that entitles me to knock five cents off every gallon I buy. That drove down the price to—you guessed it—$2.49 a gallon.
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