The Energy Crisis Is Not a Crisis
Wheeler, Timothy J.
"The Energy Crisis Is Not a Crisis" violations of human rights in the Soviet Union. (A brilliantly edited compilation of materials from the Chronicle is Peter Reddaway's Uncensored Russia, McGraw-Hill, 1972.) Most dissenters...
...When you try to cause a shortage by cornering the widget market, you will be bidding against all other widget buyers in the world...
...and the people brought provisions no more to markets, since they could not get a reasonable price for them...
...it was sold by the litre...
...This restricts supply, and will cause shortages if price controls are in effect, or even higher prices if there are no controls...
...When prices rise, tempers rise...
...Massive government regulation of oil and related industries makes matters a lot worse, but that need not be discussed here.15 To sum up: there is an energy crisis, but it is strictly artificial and man-made...
...There are the Ulcrainian nationalists whose ambitions range from linguistic autonomy to political independence...
...with median family income at $11,000 most Americans belong to a highly prosperous middle class...
...16, The learned say that present oil shortages translate into gasoline prices of no more than 55-70 cents per gallon...
...is They promise to develop new sources of oil...
...Defiantly he spoke of his plans to write about Russia and to continue his personal mission to bring the Russian people a regime of '~ustice and law...
...Once abroad, they are quickly reduced to political impotence and thus rendered harmless to the Soviet regime...
...The first is that: Good jobs are the answer to poverty...
...13 Shortages occur only when prices are fixed at a level below what the market says they should be...
...To fix prices, you have to destroy the market --overrule the continuous bargaining by millions of traders that keeps the goods moving by adjusting prices...
...Since the job pays more than $450,000,000,000 a year (federal, state, and local)--with superb prospects for advancement--few of our miseries are likely to be cured by politicians...
...Also, although inflation is a divisive political issue, prices have risen less in the United States than in most other countries in recent decades...
...Although there is plenty of work for everyone to do, unemployment will persist...
...I am not one of them, and if you are, you did not read our little history lesson with your thinking-cap on...
...It seems absurd to argue that they could not afford gasoline at such prices, especially if they can afford an automobile...
...Such questions are less troublesome if you assume, realistically, that the principal business of the government is looking after the government, i.e., the care and feeding of politicians...
...The supply keeps growing, and its value sinks accordingly...
...In an interview on February 18 he asserted that "even old trees . . . are transplanted, and they take root in a new place...
...I know from experience that the argument is false...
...No sacrifice you can make is too great to keep this noble enterprise afloat...
...The price of a commodity, not bureaucrats, should tell you how to use it...
...Don't bother telling your representativ-:~ to stop inflatino They would sooner dishonor their mothers 12.The market is nonstop bargaining by buyers and sellers, both seeking the best price they can get...
...If it is high, you have to conserve...
...Emperor Richard's "fight" against inflation seems to be along these lines...
...everyone is agreed that something drastic must be done about it, although both diagnoses and prescriptions still lack focus...
...government policy...
...But look what happened to Diocletian's Rome...
...Two years later the historian Timothy observed that Richard's edict had brought a general dearth upon the empire...
...Call this cynicism if you want to, but it also 1. Politicians always blame the greedy and the profiteers when the public refuses to accept debauched currency at its face value...
...Gasoline and fuel oil prices affect almost everybody...
...At $17,000 a dozen...
...And the next step, gasoline rationing, is much more wasteful...
...They argue that lifting price controls would send gasoline prices out of reach of the poor--and after all, the poor are just as entitled to buy gasoline as the rich...
...The race has been on ever since King Glogg discovered he could take your money-without the risk of getting clubbed--by calling it taxation...
...This strongly held belief, inhering in the American work ethic, is paradoxically The Alternative April 1974 15...
...Come to think of it, it's not even money...
...moreover, ~me were actually told to choose between emigration and prison...
...Shortages are a novelty in this land of plenty...
...As things get worse, the government promises to "fight inflation,"11 and the stage is set for the emperor to call his press conference...
...There is no doubt, however, that ultimately they will come again to the surface...
...A classic case of the government's unfailing preference to fight an evil instead of curing it...
...In this case, the government solemnly pledges to "fight" inflation, when all it r~eed do is stop inflating...
...Here is a sample of the prevailing political rhetoric: (Washington-AP)--- ' ~ p o s - als to lift price controls from natural gas could cost consumers an extra $18 billion annually in increased fuel costs, Representative Les Aspin (D-Wis...
...Paradoxes and inequities characterize the welfare picture, where a huge public bureaucracy presides over a system which penalizes people for working, pays women to get rid of their husbands, invites cheating, and denies help to many in the greatest need...
...After the list got to he three pages long, I was too ill to cont~'nue, and resolved never to make it public...
...Solz henitsyn is trying to make the best o1" a bad situation...
...So, as the government money factories keep producing more money, m the price of the dollar goes down and down, meaning that the dollar price of beef and coal and everything else gees up and up...
...9 It robs widows and orphans, damages contracts, invites mismanagement, undermines morality (yes, it does), encourages shoddy merchandise, raises hell with the economy, causes depressions, and makes politicians wealthy, but that is another stow...
...His future plans are uncertain and will remain so until he has secured the release of his family and---almost as importantly ---of his research files, which he must have to con(inue work on his historical novel, the first installment of which, August 1914, has already appeared in the West...
...The Supreme Court legalized them seventeen years later, notwithstanding that the framers of the Constitution had specifically denied to beth federal and state governments the power to print paper money...
...Every new dollar the federal government creates is a dollar stolen out of the economy...
...The principal villain is inflation...
...Their livelihood depends on it...
...In the face of high petroleum prices, people would turn down their thermostats, drive slower, form car pools, and so on without being told by Washington, D.C...
...SO long as the traders can strike a bargain at whatever price they choose, goods will be readily exchanged and no shortage will develop...
...The Europeans were far worse off economically than American poor are today, but they managed very well despite an "unaffordable" price of gasoline...
...In the interests of even-handed justice, t can also report that those goods reported in plentiful supply over the same period ware: sunflower seeds, paper money, taxes, and political rhetoric...
...Most dissenters associated with the Chronicle of Current Events, notably Pyotr Yakir and Victor Krasin, ended up in prisons or in prison-psychiatric hospitals (by an Orwellian twist of reasoning Soviet authorities regard political dissenters as criminally insane, and it is therefore fit and proper that they should be committed to such institutions...
...You and I have to cover these losses by paying higher consumer prices...
...hope of all freedom-loving men throughout the world...
...7. Shutting off, temporarily, between 5 and 10 percent of our usual supply (published figures vary)---not enough to cause serious dislocations...
...Nowadays, we call these "progress," not "oppressions...
...You may as well get used to it all...
...Why...
...8. If further evidence is needed, available U.S oil supplies are, in the middle of the crisis, at or near record highs...
...Low prices are more popular than high prices...
...There are the Jews whose ties to Israel have, if anything, grown stronger now that tens of thousands of Soviet Jews have settled there...
...For one thing, although unemployment is only a fraction of what it was in the terrible thirties, it is several times as high as the current levels in Europe and Japan...
...and, although it is easily within the nation's economic means to eliminate poverty as it is presently defined, indigence and dependency will continue and will probably increase...
...It is caused by Emperor Richard's policies...
...It might even hurt the - spirit of ddtente...
...In several cases, such as those of Professor Zhores Medvedeev or of the lawyer Valeri Chalidze, dissenters were generously allowed to accept invitations to lecture at Western universities (liberalism and deStalinization...
...He believes his policies should remain in effect even if it causes the public inconvenience and hardship...
...the rest of the poor are on their own...
...He looms increasingly as the...
...Somebody has to pay for everything the regulators order, and it turns out to be you and I. I started to do a list of the government's regulatory attentions to the petroleum industry: all the way from the Santa Barbara channel and the North Slope oilfields to your empty gas tank...
...A shortage means: not enough supply to meet demand...
...They adjusted to the circumstances with smell cars, motorcycles, bicycles, and hitchhiking...
...Why is it an article of faith among politicians of beth parties to keep oil prices fixed at artificially low levels, even though it muses shortages...
...4 Did generM wage and price controls, enforced by the Internal Revenue Service,5 stop inflation...
...4. "The lesson that government price fixing doesn't work is never tearned"--Richard M. Nixon, 1956...
...A small number, however, were allowed to go abroad...
...Is there a shortage of widgets...
...Now that he has been forcibly deported from his native land Mr...
...The six percent of the population receiving public assistance constitute about half of those in poverty...
...Understandably, many people blame the oil companies, or greedy capitalists, or them damn Arabs for the energy crisis...
...It takes power and a lot of it to thwart these millions of traders and enforce fixed prices...
...Arriving in Germany with little more than the clothes on his back, the Nobel Prize author stayed at the home of the German author, Mr...
...In 1971 there were two million American families trying to live on less than $3,000 annual money income from all sources, and three-fourths of these were trying to make it on less than $2,000...
...Politicians have been playing these games for millennia as we have seen, and they have invented an awful lot of ways to perpetuate and cover up the wholesale larceny that is the standard of excellence in their profession...
...You would indeed have to pay more for it: not because the giant oil companies are ripping you off, but because the government is...
...The procedure is made even more attractive to the Soviet regime because it enhances its reputation for humaneness-after all, the dissenters were not shot...
...said yesterday...
...Although the workers' paradise has become reality here, it is by no means certain that nature can endure the strain, even if the economy can...
...And these are only those groups whose grievances were voiced persistently and openly in recent years notwithstanding the fear of reprisals...
...Since that sorry day, politicians have invented indirect taxes (taxes hidden in the price of goods), progressive taxes, inflation-counterfeiting (a_ tax on capital), tax withholding (so you won't notice), and other refinements, They have also invented national emergencies, wars, austerity programs, rationing, and such to force you to lower your standard of living to what it should be after they've cleaned you out...
...Nevertheless, despite these achievements, it is not entirely due to the nature of the beast that economic issues have not disappeared from U.S...
...He said that natural gas deregulation 'amounts to nothing less than a multibillion-dollar profit grab by giant oil companies . . . . " Representative Aspin is really pitchin' it...
...These traders, the experts in supply (what's for sale) and demand (what people will pay money for), will find the right (mutually agreeable to both) price to keep the goods moving...
...Government and only government has the power to fix prices and cause shortages...
...And the average welfare family in New York or Los Angeles enjoys a level of affluence that is the envy of millions around the world...
...You succeed in buying every widget except those owned by that eccentric hobbyist in Vermont and the fine Smithsenian collection...
...In my opinion, the government persists in its "energy crisis" policies because it is politically expedient...
...In other words, apart from the Arab oil embargo, 7 the oil shortage h~q little or nothing to do with the oil industry, s and everything to do with the surplus of dollars...
...and as you can see, they have been doing it for millennia...
...If it cured our miseries, it would be out of a job...
...But we need another sort of explanation for shortages of many different goods at once...
...He spoke of wanting to acquire "calm quarters with some land, convenient for work and for health...
...For, although unemployment and poverty are economic problems, their persistence is not primarily due to economic causes but is rather the result of certain beliefs which are central to the Amerman economic ideology...
...What we need to know here is that inflation is an increase (an inflating) in the money supply--legal counterfeiting...
...Finally you bid the price of widgets up to $t7,000 a dozen...
...Not exactly...
...Jacqueline Kasun Four Myths of Poverty and Unemployment THERE WABN~T MUCH fanfare when the United States' gross output passed the one trillion dollar mark...
...This selective deportation results in small colonies of former Soviet dissenters who may now be found in Rome, London, and New York, desperately looking for some sort of permanent residence and employment...
...These can be vexing questions if you trust politicians and believe the government is benevolent...
...Unfortunately, nobody throws used money out with the rest of the garbage...
...You would be able to buy "your share"--all you want and can afford...
...There are the several particularly disadvantaged religious groups, such as the Baptists (one such Baptist was portrayed as an inmate of a Soviet labor camp in Solzhenitsyn's One Day in the Life of Ivan Denisovich), or the Lithuanian Catholics (whose illegal publication contains long lists of victims of harassment by a government that is simultaneously mending its fences with the Vatican), or the Jehovah's Witnesses, whose sect is simply outside the pale of Soviet law and in which mere membership is a criminal offense...
...there are Crimean Tatars, deported by Stalin from their native lands and refused permission to return by the same Soviet government that sheds crocodile tears over the fate of Moslem refugees elsewhere...
...We may conclude without doubt that the energy crisis originated in the money factories of Washington, D.C...
...Why does the government persist in policies it knows to be harmful to the public...
...Possibly so, if we were only short of oil...
...After all it's been the largest in the world, both on a total and on a per capita basis, ever since the GNP measurement was invented...
...5. A police agency...
...3. Whe:~ the Administration later promised there would be no gasoline rationing, the nation's supply of gas cans sold out in a few days...
...He had there~ore issued a total edict that "commanded cheapness" in many hundreds of commedi"Lies m~_d put ceilings on wages in almost evew cmcupation, x~th the death penalty for offenders...
...Every one of the promises will be fulfilled with your money, and they will all help keep the energy crisis going and politicians employed...
...In the year 1971 A.D., eleven days after promising that he would never impose wage-price controls, 3 the emperor Richard called a press conference to announce that he had issued an edict imposing controls on most prices and wages...
...Indeed, politicians welcome and occasionally contrive new miseries for the public, since they can increase their wealth, prestige, and power by promising to "fight" this new evil...
...17 Deregulating, freeing the market from the politicians' stranglehold, would make gasoline, fuel oil, and natural gas available again in plentiful supply...
...Not exactly...
...The goods stop moving and shortages (or surpluses) commence when the price is fixed by law at a point where either buyer or seller refuses to trade...
...In a word, Rome starved...
...Politicians' efforts to thwart traders are never entirely successful...
...The poor, like the rest of us, could conserve and buy less...
...Perhaps, as a result of a wave of ruthless repressions in a re-Stalinized Russia these grievances will now for the time being disappear from public view...
...Most Western organizations that help refugees (not to speak of government bodies) prefer to keep away from these displaced persous...
...the second foolishly attempts to suppress these price rises by force, and only succeeds in keeping goods off the market...
...There seem to be a great number of people who don't know what is causing the energy crisis...
...Stationed in Europe a dozen years ago, I could buy gasoline from the Army, tax free, for 12 cants a gallon, but the Europeans bad to pay 70-90 cents a gallon...
...12 You could not cause a shortage even if Uncle Howard left you enough money to buy up 99 percent of the world's widgets or gold or quail eggs...
...Heinrich B~ll, before flying to Zurich where he is now temporarily living with his lawyer, Mr...
...Also, after years of highly financed War on Poverty, we still have the poor with us...
...Among the goods reported in short supply after the imposition of controls were: wheat, beef, corn, soybeans, fish, pork, milk, cheese, bacon, chickens, turkeys, salmon, raisins, potatoes, dried fruit, mayonnaise, catsup, peaches, margarine, canned vegetables, canned meats, asparagus,/artichokes, lobster, frozen berries, green beans, peas, apricots, Spare, cooking oil, baked beans, potato chips, onions, quail eggs, truffles, prawns, turtle meat, pitted cherries, capers, juniper berries, King Crab, frogs, earthworms, lumber, paper, steel, horses, mules, copper, pet food, buMhess forms, cow gallstones, cement, aluminum, machine tools, heavy machinery, plastics, detergents, fertilizer, hay, drill pipe, coal, hydroelectric power, and a large number of parts, supplies, and materials for business and industry.6 And, 0f course, petrolemn--the energy crisis . . . . and the people brought provisions no more to market since they could not get a reasonable price for them...
...Environmental questions aside therefore, there are still some real economic issues, some real problems about which opinion is sharply divided...
...Unprincipled greed,"1 he said, had caused food prices to go up eightfold recently, and as Emperor ,~.f aH the people, it was his duty to bring prices and wages into line...
...The reason for such "dumping" of Soviet dissenters in the West is quite simple...
...Competition eliminates the possibility of fixing prices in the open market--regardless of what you may have heard about monopolists, profiteers, price collusions, or sharpies who corner the widget market...
...It could be cured overnight by reversing those policies and letting the market function...
...That this meant real deprivation and squalor for these people can be confirmed by any schoolteacher having low income children in her class...
...The year honest Abe Lincoln invented greenbacks...
...Either way it can prompt politicians to declare an emergency and impose controls on nonpoliticians...
...There is not enough supply to meet demand at the government-fixed price, and that is what we call a shortage...
...The paper money in your pocket is still not constitutional...
...You can see how wall it prevented the energy crisis...
...Inflation alone, however, does not cause shortages, at least not right away...
...When there is one shortage, the problem is not enough supply (dried up wells or Arabs...
...Aleksandr Solzhenitsyn was arrested in his wife's apartment on the afternoon of February I4 and forcibly flown to West Germany...
...So long as inflation and wage-price controls remain the operative federal policy, there will be general shortages, including of course the "energy crisis...
...Therefore, the politicians promise to fight for low prices...
...The first debases the currency and causes commodity prices to rise...
...It would be interesting to deduct inflation as a test case 18...
...14 The Alternative April 1974 helps to observe that the government is in business to fight miseries, not to cure them...
...2. Lactantius is referring to the welfare state, reckless inflation, and crushing taxes...
...The value of the dollar has been falling since 1862.1s But lifting wage-price controls would also mean less power and wealth for politicians, and they won't permit it...
...By lifting controls and letting the dollar sink, the government would automatically promote the conservation of scarce energy...
...And if the shortage persists, they still promise that everyone will get his '~air share" by---~reluctantly " of course--imposing gasoline rationing...
...and this increased the dearth so much that at last, after many had died by it, the law itself was laid aside...
...Here is what the Second Continental Congress had to say in November 1776, five months after it began issuing worthless paper "Continentals" to finance the Revolutionary War: " . . . any person who shall hereafter be so lost to all virtue and regard for his country as to refuse to receive said bills in payment, or obstruct and discourage the currency or circulation thereof . . . shall be deemed.., an enemy of his country...
...This position of world leadership in productivity and affluence is taken for granted by Americans as well as by the rest of the world...
...and in all cases it causes prices to rise...
...While the Germans ponder where to get more workers to fill their" job vacancies, we have 10 percent unemployment rates in some of our central cities and a rate of 17 percent among teenagers...
...How long this will go on, I don't know...
...The mere money (or anything) there is in circulation, the less it is worth...
...Government regulation tends to cause industrial senility, hamper production, and create privilege and monopoly...
...The emperor Richard knows all this...
...Every garage and attic in the world is ransacked for old widgets to sell to you...
...The fact is, he and his colleagues have already grabbed the $18 billion, and a lot more, with inflation...
...There are always some who would rather trade than obey the law...
...There are four myths which play a n especially prominent role in perpetuating poverty and unemployment in America...
...In either case, supply is sufficient to meet demand at the market price and there is no shortage...
...Friedberg wrote this article the condition of at least one of the Russian dissenters has changed dramatically...
...There was much blood shed upon very slight and trifling accounts...
...He knows he caused the oil shortage, and he knows he could end it tomorrow...
...By retaining controls, the government is actually encouraging fuel wastage...
...The higher you raise your bid, the more the other buyers will drop out of the bidding and order Ajax Patented Widget Substitutes, or go into dry goods...
...Still, the seeds of discontent from which the various movements sprang up remain intact--nearly nothing was done by the Soviet regime to placate even the most innocent demands--and one may therefore expect that dissenters will make themselves heard again before long...
...Did comprehensive wage-price controls, enforced with the death penalty, stop inflation...
...So turn down your thermostat, drive at 55-mph, stop visiting grandma on Sundays, and stop bitching about it...
...6. I am not making this up...
...Its policies are therefore shaped not by what is good for the public, but by what is necessary to stay in power...
...When there are many shortages, the problem in common is too much demand (a dollar blizzard...
...Thirteen years later the historian Lactantius reported the results of Diocletian's edict: "After the many oppressions2 which he had put in practice had brought a general dearth upon the empire, he then set himself to regulate the prices of all vendible things...
...Nor are these problems on the verge of disappearing as the economy continues its climb to new pinnacles of prosperity...
...Eft Timothy J . Wheeler The Energy Crisis Is Not a Crisis IN THE YEAR 301 A.D., the emperor Diocletian called a press conference...
...Now we have pinned down the two principal causes of the energy crisis: government counterfeiting (inflation) and government price fixing...
...Measured by an absolute standard, the proportion and numbers in poverty have declined dramatically over the decades...
...If the price is low, you use it freely...
...Since Mr...
...The energy crisis, you see, is not a crisis at all...
...Perhaps not so well known is the fact that this gigantic income is also one of the world's most evenly distributed...
...Thus criminals follow the government and its economic interventions the way grackles follow a horse, pecking at the manure...
...When there is a greater demand for widgets, either 1) widget makers will make more widgets to satisfy the demand, or 2) the price of widgets will rise and demand will fall until supply and demand are again in balance and trading resumes...
...Theft losses are deductible on federal income taxes...
...Shortages never occur in the free market because prices can (and do) fluctuate to reflect changes in the supply and demand...
...Even the environmental concerns which are currently, and probably belatedly, so intense are success problems primarily, being the result of the incredibly high and widely diffused levels of consnmption provided for the mass of the people...
...14 The only force strong enough to do it is the law-police power...
...Obviously, excessive solicitude for them would not be viewed kindly by the Soviet authorities...
...The gap between rich and poor is less wide here than in many, perhaps most, other countries...
...Them Arabs can stop selling oil to the The Alternative April 1974 13 United States, but they can't cause shortages of beef or coal or quail eggs...
...9. Over the long term, inflation seriously damages productive capacity by encouraging misinvestment...
...it works just like a free market, except that black market traders get much higher profit margins and prices to cover the risk of being fined or jailed...
...Actually, the statement can be taken at face value referring to the greed of Diocletian and his predecessors who had, over two centuries, debased the Roman denarius from nearly pure silver to 99.98 percent base metal--in effect, the denarius was inflated to 1/4700 its former value...
...Yet he does not do so...
...political debates...
...In the past Mr...
...only to have their Soviet passports confiscated abroad, thus preventing their return to Russia...
...This situation is tailor-made for the entrepreneurs of the Mob, who live outside the law anyway...
...But the environmental question is not really an issue...
...Fritz Heeb, while looking for more permanent residence in Norway...
...This is called, notably by politicians, a black market...
...Don't be silly...
...All this regulatory meddling was justified in the first place by the argument that it would prevent economic crises...
...Solzhenitsyn wrote off exile as "spiritual castration...
...It is official U.S...
...There is no denying the fact that at this time, after a wave of arrests, Soviet dissenters are in a state of disarray...
...Naturally, more buyers want to buy at these bargain prices, but fewer sellers are willing to sell...
Vol. 7 • April 1974 • No. 7
