Sowell to the Rescue

I spent last evening reading Thomas Sowell and listening to Beethoven's 5th Symphony.

I feel better now.

I shan't watch, read, or listen to the "business" news anymore.

"When huge nations like China and India - whose combined populations are more than eight times that of the United State - experienced rapid economic growth in the early twenty-first century, their increased demand for petroleum drove the price of petroleum in the world market up to unprecedented heights, and with it the price of gasoline to new highs beyond anything that American consumers were used to. The reaction in much of the American media and among politicians was anger at oil companies. The notion of volitional pricing has never died out completely, however inconsistent that is with supply and demand." Thomas Sowell, Basic Economics

"A volitional view of economics enable the intelligentsia, like politicians and others, to dramatize economics, explaining high prices by "greed" and low wages by a lack of "compassion," for example. While this is a part of an ideological vision, an ideology of the left is not sufficient by itself to explain this approach. "I paint the capitalist and the landlord in no sense couleur de rose"," Karl Marx said in the introduction to the first volume of Capital. "My stand point," he added, however, "can less than any other make the individual responsible for relations whose creature he socially remains, however much he may subjectively raise himself above them." In short, prices and wages were not determined volitionally but systemically.

Understanding that was not a question of being on the left or not, but of being economically literate or illiterate. The underlying notion of volitional pricing has, in our own times, led to at least a dozen federal investigations of American oil companies over the years, in response to either gasoline shortages or increase in gasoline prices - with none of these investigations turning up facts to support the sinister explanations abounding in the media and in politics when these investigations were launched. Many people find it hard to believe that negative economic events are not a result of villainy, even though they accept positive economic events - the declining prices of computers that are far better than earlier computers, for example - as being just a result of "progress" that happens somehow." Thomas Sowell, Intellectuals and Society