THE LIBERTARIAN ENTERPRISE
Number 337, September 18, 2005

"Prison Time For Gun Confiscators!"

Court of Last Resort
by L. Neil Smith
lneil@lneilsmith.org

Exclusive to TLE

I find myself in receipt, thanks to the kindness of a frequent poster calling him- or herself "Spiker", of a brief article from the Huffington Post written by one Jamie Court, of a Santa Monica-based "Foundation for Taxpayer and Consumer Rights".

Court's article claims that gas prices have risen precipitously in recent weeks because the oil companies have deliberately closed refineries to decrease supply so they can demand more money for their product.

He goes on to quote internal corporate "strategy memos" from Texaco, Mobil, and Chevron, advocating this policy, and discusses other actions the gas giants have taken—notably through supporting stringent regulations in order to drive smaller suppliers out of the market—which have the highly-desired (to them) effect of raising the price of gasoline at the pump. Today, we're paying three dollars a gallon, whereas even a short time ago, two dollars would have been unthinkable.

"Large oil companies," asserts Court, sounding dismayingly dismal, and a whole lot like one of my old Economics 101 professors back in college three or four decades ago, with their X-shaped diagrams up on the greenboard, "have for a decade artificially shorted the gasoline market to drive up prices. Oil companies know they can make more money by making less gasoline. Katrina should be a wakeup call to America that the refiners profit widely when they keep the system running on empty."

To this point, there's nothing I can complain about in Court's analysis. It took me about half of my adult life (so far) to realize, and admit to myself, that Ayn Rand was dead wrong about corporations and the system everybody calls "capitalism" which is, in fact, the very mercantilism that Adam Smith denounced in Wealth of Nations I kept wondering why American business didn't recognize us as their intellectual saviors and shower us with grants and campaign donations. For the most part, corporations are evil, and—here's the important part—every bit as threatening to individual life, liberty, and property as the government, of which they are, in fact, a malign tentacle.

Or the other way around, if you prefer: government often operates as the malign tentacle of the corporations. The whole multifront war going on in the Middle East right now is being waged for the benefit of companies like Texaco, Mobil, Chevron, and the putrescent likes of Halliburton.

So having agreed with him up to a point, it's Court's next thought that I find disagreeable—and sort of puzzling, given that the man seems to understand the way that corporations wield the bludgeon of law to advance themselves in what would otherwise be a free market system.

"It's time for government," he says, "to regulate the industry's supply." I'm not entirely sure what he means by this, but he goes on, "The fact that President Bush received $2.6 million from the oil industry for his reelection in 2004 should make regulation of the nation's gas supply one of the Democrats' most important talking points."

Perhaps he intends to regulate their supply of presidents.

Or maybe he means forcing them to make more gas, setting Soviet- style quotas and the whole Marxoid nine meters, maybe even taking out production managers who fall short from month to month and shooting them. The ones who meet or exceed the quotas get big medals that say "HERO".

But the inconvenient fact (for Court, anyway) is that this sort of regulation never, ever works, precisely as better historians like Gabriel Kolko (otherwise a staunch Marxoid type, himself) have been attempting to point out to their fellow lefties for at least four decades.

First and foremost, regulations never seem to affect big companies much, which shouldn't come as a surprise to anybody. They can afford the higher costs regulation imposes on them (which they pass on to the consumer, anyway), and the hordes of lawyers they hire to get around it.

Far worse than that, big companies actually welcome regulation—as Kolko first told us in the case of America's railroads, and as Court himself points out—as a way to limit market entry and keep small competitors off their backs. It leaves them free to charge whatever they damn well please, instead of what a free market would determine.

And in the end, real life being what it is and all, bureaucrats and politicians involved in regulation—members of this or that commission or "blue ribon panel"—invariably end up retiring from "public" service and immediately being invited to join the boards of directors of the very corporations they were supposed to have been regulating. There's a good, basic, depressing human reason for this: gratitude.

No, you simply can't write legislation that avoids any of these pitfalls, and you can only make an existing bad situation worse by trying. If Court's plan is to impose price controls, once again he's handing a huge advantage to the big outfits, while depriving smaller ones of room they need to maneuver in the market. And again the giants win.

So what sort of remedy would work? Well, the simple truth is that the market acquired its present distorted shape precisely because of regulation. Using government as a tool, the big companies fixed it so it's extremely hard to start a company, and so that long-term survival is much more difficult than it would likely be in a free economy. Tiny independent producers—in the 1970s, every farmer between here and Oklahoma City had a well and a miniature refinery on his land; I've been told they've been regulated out of existence—don't stand a chance.

At the same time, important innovation is frowned on by those already invested heavily in the current technology, and, accordingly, discouraged by regulation. We're long accustomed to hearing advocates of wind and solar power blubbering that their pet technologies are being kept out of the mainstream market. However the bald-faced truth is that the poor, twisted market system in this country has been forced to bend over backward to make room for them—room that they have failed to fill. Wind and sun are simply not reliable sources of the kind of power that this civilization requires to operate and advance.

Meanwhile, fission, one truly innovative and effective source of electrical power has been savagely suppressed. Catalytic fusion has been reduced to crackpottery by the round-heeled media. And the best hope for the immediate future—thermal depolymerization, a simple, inexpensive process that effectively turns garbage of all kinds into petroleum—hangs in limbo because it offers the world a splendid source of fuel that the big companies don't (and can never) ration and control.

I'm sure that what really wakes the big boys up in the middle of the night, sweating and screaming, is a vision of a future in which the average home's garbage disposal and trash compactor feed directly into a device that manufactures all the petroleum an individual family needs.

So the answer isn't regulation, at all, friend Court, and Mr. Spiker, too. It is deregulation, which will allow exactly that sort of "nightmare" vision to come true for the big oil companies, while giving individuals, families, and communities some genuine energy independence.

I have heard one criticism of thermal depolymerization: it will generate fuel so cheap (about eight dollars a barrel) that folks will drive a lot more, increasing pollution of the environment. I have a question for the critics: how many human lives will likely be lost to such pollution, compared to those lost in this stupid, unnecessary war?

Be careful: your answer may reveal more about you than you want known.



Four-time Prometheus Award-winner L. Neil Smith is the author of 24 books, including The American Zone, Forge of the Elders, Pallas, The Probability Broach, Hope (w/Aaron Zelman), and his collected articles and speeches, Lever Action, all of which may be purchased through his website "The Webley Page" www.lneilsmith.org. Ceres, an exciting sequel to Neil's 1993 Ngu family novel Pallas was recently completed and is looking for a literary home.

A decensored, e-published version of Neil's 1984 novel, TOM PAINE MARU is now available online: http://payloadz.com/go/sip?id=137991.

Neil is presently working on Ares, the middle volume of the epic Ngu Family Cycle, and on Roswell, Texas, with Rex F. "Baloo" May. The stunning 185-page full-color graphic-novelized version of The Probability Broach, which features the art of Scott Bieser and was published by BigHead Press www.bigheadpress.com has recently won a Special Prometheus Award. It may be had through the publisher, at www.Amazon.com, or at billofrightsPress.com.


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