Curt Howland,

“It achieves the goal of ‘hands off’ in something. That is a goal all by itself.”

But it isn’t hands off, and that is my point. No change in economic system has taken place and no moves have been made to permit natural supply and demand to take affect in the industry. It is a show for which Libertarians will not gain an audience. Nobody will know. There was no significant or long-term shortage, in fact, from what I’ve read and heard, there was no more than a minor suggestion of a controlled shortage. And retailers knew this, or at least many of those who have been in the business for awhile.

You are a reasoned thinker it appears to me from your discussions, so I believe you’ll recognize the problem that $20/gallon gas will create if it became widespread in a short time in this economic system. You may be able to afford $20/gallon at your income level. I’m self-employed and my business is mostly done from my home, but I make many deliveries and pickups from local suppliers because it is less expensive than using mainstream delivery services. But when gas went up to $3.00/gallon around here, I began planning trips more carefully and found new efficiencies. However, $20.00/gallon will have a drastic negative affect on my business. I will not be able to compete with larger businesses that have more ability to milk the tax system to free up capital to take my market share while they gradually increase prices over time to account for increased input costs related to petroleum products. If neither of us could milk a tax system, it would be the level-playing-field scenario in which small and large businesses can function and the winner is the American citizen.

How much of America could withstand such a jump in price if established in the short term? The growing multitude of people in the lowest income brackets would be devastated. And the $20.00/gallon price will NOT achieve any genuine free markets with this regime.

“How about, one small step at a time anywhere that the opportunity presents itself. Such as, a hands-off approach to anything, no matter how small.”

That isn’t “one small step” that will be recognized by anyone outside of this forum. People on both “sides” by the tens of millions see the government as the only tool available. Some see it as the only right way to do things—herd the people for their own good. Others see it as the only way to fight back at that which is oppressing them. But NONE of them will believe that Libertarians scored any victory for “free markets” if the perception of price gouging isn’t addressed.

Libertarians should never advocate price controls and should always promote GENUINE free markets. But to claim that a hands-off approach in this particular situation (hurricane effects) is a move toward free markets without any accompanying change in economic system is ludicrous.

What you suggest will not begin the process of change, nor will it advance any Austrian economic theory or Libertarian philosophy.

Alright, Joe, I am through with you. I and others have pointed out your shortcomings as a writer, and I have done it in a sincere effort to understand your thoughts. Since you insist on taking it as an personal affront rather than using the criticism as a prod for self-reflection on your style of discourse, I can do nothing else than what I have done. One of the primary goals of a writer of anything, if not the most important, is to be understood by his audience. Should one choose not to be understood, then he is wasting his time in the writing, and the readers are wasting their time in the reading.

Bob A.

I wrote that only the state can force me to deal with the oil industry. I do so of my free will since they offer the lowest-priced fuel for transport and warmth in winter.

In the purest sense, oil is always in a shortage, since there is always more desire for it than can be supplied. It is price that regulates the balance of supply and demand. It is true that government subsidies to oil help keep the supply higher than it might otherwise be, and thus, keeps the price at the retail level lower than it would be in their absence, but the point is this- the subsidies increase the supply, not just cap the price- at least in the United States, since I can go out and buy gas anytime I wish. When I wrote of a shortage born of price controls or “caps”, I mean the position of not being able to purchase at any price due to no inventory.

The amounts spent on additional drilling may be wasted. However, it is in the oil companies interest not to waste money in a meritless pursuit of additional supplies. If they are unable to find addititional resources, then no amount of subsidy will stop the rising price, and only direct outlawing of alternatives will prevent their ascendency.

I don’t mind reading long-winded essays as long as they are clearly written. Yours really isn’t long-winded since it makes multiple points. I just don’t agree with all them.

Bob A,

I tried writing a reply a few minutes ago, but it has not appeared yet so I will rewrite it.

The price of oil/gas has only been capped in the sense that subsidies to the oil industry have kept the supply higher than it would have been otherwise, and, thus, kept the prices at all levels lower than they may have been. There is only a true shortage when the price at a given level of production is kept artificially lower than the supply/ demand would dictate (see Hawaii, for example). What you seem to mean is that oil companies have capped the price and will continue to cap the price in future, regardless of the actual availability of oil and demand for it- this is impossible. If there is more demand than there is possible supply, as you postulate for the future, then the price will rise, or rationing by state decree will ensue- there is no third alternative. Either way, the alternatives to petroleum will begin to assert themselves. Of course, we could continue for some time with the present situation- state subsidies that make uneconomic petroleum resources economically viable, with the corresponding lower retail prices. I don’t support that, as will no real libertarian, but I don’t like the idea of competing subsidies for the alternatives since it is ultimately self-defeating and leads to an ever bigger state.

Paul Edwards,

“If the energy market were entirely unhampered by government . . . ”

IF this happens, then prices will begin reacting to supply and demand naturally and whatever prices do they do. If someone charges $20/gallon in this type of environment, that person intends to decrease demand for that person’s inventory. That person will NOT be charging exorbitant prices using the false pretense that there is a shortage in the market, and Big Oil/Big Gov’t will not be metering and influencing pricing. In such an environment, IF citizens have choices, they will react to false pretenses accordingly with their economic and verbal actions. Such is not the case now—we have no free markets and retailers use false pretenses to achieve increased profits.

Still, I’m against price controls but don’t know what to do about the situation. It is a dilemma. It would be best to convince people to make changes to cure the disease rather than put up with or treat sores. This particular sore will fester and rubbing salt in the wound by applauding price gouging will not make it better.

If it could be realized that home electric generation will manage to create economic independence than one such plan of attack could be made real in the following manner:

City municipalities could offer a welcome and voluntary investment portfolio. Contributors pay a voluntary tax investment to purchase a spot on the list. The list contains the names of contributors and the amount of each contribution. Larger contributions move an individual up the list. The largest contributor is on the top of the list.

The municipality advertises and seeks from potential producers a product having specific design capabilities. The product utilizes solar panels to convert the energy from the sun into electric energy. The product utilizes a wind turbine to convert the power of moving air into electric power. The product stores electric energy in batteries and or the product converts excess electric energy into hydrogen. The product stores hydrogen into a tank which can be dispensed into hydrogen powered appliances and vehicles.

The product will be designed to produce at least twice the power required to power the house and two cars based upon an average demand. The product can drop into a specific sized location having specific dimensions subject to availability and current technology.

Subscribers who receive the product first are the first ones to eliminate their energy bills so long as the unit continues to generate enough energy to run the house and the two cars.

Subscribers who receive the product first begin to pay off the remaining cost of their unit. Once they pay off the unit, then, all the excess energy produced and sold back to the electric company is credited to the owner of the unit.

While the mortgage on the unit remains un-paid, then, the excess power generated by that unit is credited to the municipality account for the purchase of new units and municipal insurance to be used to fight legal battles concerning the tax credit status of independent home electric generation.

Municipalities may find reason and cause to combine interests with other municipalities in the effort to maintain legalized independent home electric generation credit. Oil, nuclear, and other power companies may lobby to defeat the independent home electric generation credit union.

As the snow ball rolls down hill it can gain mass and velocity. A person who is way down on the list may see his neighbor who already has a home unit. The neighbor may be reaping the rewards of independent home power generation. The person low on the list may wish to contribute more and move his or her name up on the list.

As more neighbors receive their units and begin generating more power, then, the municipal bank account grows. Total power grows. Oil becomes less valuable. Nuclear power becomes less valuable. More units are made. Unit costs diminish. Development capital increases. Design efficiency increases. The independent home energy generation market creates jobs. The demand for hydrogen powered cars and appliances increase. The hydrogen powered car and appliance market gains momentum.

More people receive their units.

More renewable energy is made.

Total available energy increases. Energy costs lower. All the costs associate with producing things with high cost energy lower.

People gain independence.

People stop sending their kids to Iraq for oil.

Mr. Kelley, you might find http://www.homepower.com/ interesting. I’m a long-time subscriber.

Joe Kelley,

“If it could be realized that home electric generation will manage to create economic independence than one such plan of attack could be made real in the following manner:

City municipalities could offer a welcome and voluntary investment portfolio.”

This is the kind of creative thinking I hope will become prominent in discussions all through the blogosphere and in print media. Some progress has to be made at the governmental levels because government has caused most of the problems.

In my State, a couple of programs have been developed by our Democrat Senators in conjunction with business owners and individual contributors. The contributions are voluntary and are developed outside of the tax system, or almost (so it’s getting there). I’ve considered contacting these Senators in an attempt to engage them in discussions of the benefits of GENUINE free markets and possibly selecting an industry or activity to use as a model. An idea such as yours with such widespread benefit and that can be begun in a municipality might be the key.

Joe Kelley,

Now, was that so hard? An idea laid out in a lucid comment is always nice to see.

Yancy Ward,

My wife is a successful Real Estate agent. She defeated a falsehood that gripped her soul severely in the form of a deep depression that nearly, very nearly, put her in the loony bin; a one way ticket. At that time my goal was no different than it is now. How hard is it for me to develop my goal?

A few months ago my wife asked me to define the word pretension. My wife was dealing with people who insist upon spreading falsehood. Real Estate profits tend to inspire this type of activity. I told my wife that pretension is a word describing a person’s assumption of knowledge that has no basis in fact.

Do you actually have any idea how hard it is for me to write? Have I not thanked you enough for your continued and repetitive critical statements?

Now; is it so hard to credit someone without the strings of pretension attached?

I thought that you were done with me. What happened? Pat yourself on the back. You helped me. Thank you very much – sincerely. Please consider the possibility that I am aware of my own limitations concerning my talents for applying language. I can use constructive help. Would you like to be my editor? Am I wasting our time?

Curt,

Sincerity is as valuable as science. If you can understand where I am coming from then you will know that my thanks for your dialog is sincere. The chips can’t fall as they may if the chips don’t start flying in the first place.

The relationship between oil and china is, perhaps, arguably the most important long term topic relevant to this present topic. The next step on the road to seizing, securing, and maintaining oil backed world dollar hegemony is Iran. The force that is able to seize control of Iran and Iranian oil will gain significant power relative the forces that do not seize control of Iran. All of which becomes insignificant when enough people sever the link and regain independence from oil.

It has been reported, from sources that I can link, that claim; China has drawn a line in the sand around Iran. The leadership in China, the report states, cannot afford to give up any more power linked to the supply of oil. China currently demands and depends too much upon the supply of oil.

How will the Chinese leadership deal with the current oil bullies?

Coincidently; I have linked up with a person claiming to live in China. This person contacted me through the internet start up called Skype.

Skype advertises this slogan: “The whole world can talk for free.”

This Chinese person appears to be genuinely sincere about friendship. It is a real shame that our respective leaders are not as wise. It is a shame that we have grown dependent upon their unwise leadership. At least we are able to begin chipping away at the source of the problem. We are able to make a connection that is independent of leadership. The lesser of two evils appears to be a choice that is not necessary.

Time will tell. Perhaps the chips will fall in place; in a rational order (out of chaos) and market forces can begin to do the job freely.

Mr. Kelley, if the Chinese are smart, and they certainly are that, they will embrace Thermal Depolymerization. Oil at $8/barrel and empty landfills.

Curt,

I found the following while searching for information on TDP:

“They are not publishing the exact financial performance of the first full scale plant. The financial performance would tell us right now if TDP will work on a larger scale.

“The Carthage plant is only producing 500 bpd. The US currently consumes 20 million bpd.

“There has to date been no peer review. That is, I have seen no independent verification of the claims. CWT has made good, but incomplete presentations at technical conferences.

“Detailed claims have been made that CWT says the Carthage plant has verified the predicted performance and is running successfully.”

And this from the same source:

“Once I have a 100% air tight case that TDP will work as advertised, I will lay that case out in clearest language I can muster, then initiate contacts with concerned parties in government, congress, media, industry, banking, and international organizations.”

That site also links to the “Peak Oil” contention.

I checked one more source:

“He says the first generation of depolymerization centers
will be up and running in 2005. By then it should be clear whether the
technology is as miraculous as its backers claim.”

If, and this is a big if, “Peak Oil” is like the sky falling down as many sources claim – then knowing if TDP will work becomes a significantly important question to answer.

So there are two important questions to answer and both questions significantly affect the supply, demand, and the price we pay for Oil now, soon, and later.

China may have an advantage; if in China the force of government is not directed toward enforcement of patents and if TDP technology does erupt in China, then, the TDP marking in China will not be bottled up by some company spending time and energy seeking government protection. The market may resemble an open source model – free from barriers and be able to develop and expand rapidly.

All ideological theory aside, it seems to me, that our world is rapidly being redefined. Free competition may really show its strength – maybe sooner rather than later.

Meanwhile I see that electric meter dial on the side of my house spinning in the wrong direction and my special interest is to get it turning the other way. If TDP does work out fast enough to keep pace with whatever “Peak Oil” realities dictate, then, my special interest my return to my book idea: “Liberty for Kids”. I think it will be a coloring book. I could try selling crayons too.

Bob A.

“What’s the deal?”

Protectionism, enforced scarcity, manipulated supply and demand, coercion by lies, coercion by arms, enforced monopoly, centralized control, centralized propagated false authority?

That TDP production development case above illustrates how people manipulate other people in ways that inhibit free exchange. In the effort to gain the greatest profits the developers are (possibly) seeking protection, by law, for their development and discoveries. This is a fine thing say many authorities by whatever label they choose to embroider on their hats. The fact is that no such protection, by law, would exist without THE STATE. How could a company force competitors to pay for their competitors protection – by law?

On the one hand a person may demand the right to protect his patent. A competitor may or may not voluntarily finance a patent enforcement racket…err…legal police force. It snow balls quickly. Two competitors may find reason to share the patents rights to leverage a third competitor out of business on two fronts.
A. Enforce a tax to pay for everyone’s “Protection”
B. Sell the product below cost or “dump” the product long enough to make the smaller competitor’s competition insolvent – then buy up the capital at a discount.

Front A is down right criminal

I’d like to find one proponent of intellectual property rights who have never copied a ‘protected’ music CD or computer program. The “Law” appears to apply only to those who get caught. Criminals are not people who go around harming others; instead criminals are just those who are not well connected enough (have enough capital), or just not clever enough to avoid getting caught.

Front B illustrates the principles behind patent rights. Kill or be killed. Perhaps these principles are integral parts of human biology. I thought the concept of Law was to raise the human condition above savagery and cannibalism.

Intellectual property can be managed in many ways that do not require the creation of The State. Why look for these ways when a congressman in the pocket is so much cheaper and or more fashionable. Why look for these ways when it is so much easier to simply cheat.

Competition can be open and free or equitable in principle. “Here is the ball – dude – lets see who can make the most goals.”

When the goal is a limited market then all the more reason to negotiate an equitable portion of the limited pie and then calculate capital allotment from an agreeable, known, position based upon the capital principle of trust. Players who are known to break the rules based upon principle may actually become undesirable rather than just undetected (SHHHHHH I won’t say nothing if you don’t). Look at the effects of “negative feedback” where enforcement is not practical i.e. on the net.

When the goal is to find a solution to the worlds energy and military crisis (perhaps one and the same thing), then, the stakes are somewhat higher than someone’s personal bottom line in dirty tricks competition for some obscure market.

The PDT Company is, possibly, sitting on their development work – hoping to corner the market by securing some form of legal protection. Perhaps they want royalties for their findings. All well and good say the economist dejure; better for the free market. And who by chance is going to pay for the enforcement of payment on those royalties?

What happens when the protected information reaches China? China doesn’t enforce intellectual property rights; right? Does my son have to go to China to enforce property rights? I’d rather he stays here in case we need to help each other in a disaster like an earthquake or a State run financial collapse. Some dangers are real and the other are manipulated consequences of someone else’s special interest.

From another, possible angle, suppose that the PDT Company is stalling for time. Perhaps their development has not quite managed to fit the bill and they are feverishly working out some remaining problems in the process. If some unconnected researcher in China has the answer to those last remaining problems, then, the closed source protection tactic inhibits progress.

If the PDT Company fails to iron out the last problems and buries their research in defeat, then, progress is further inhibited and perhaps even severed. Opening the source would, at least, inform others of specific failed research leading to specific dead ends. If they won’t open the source, then, they obviously wish to exploit. That is a fine thing. To each their own; but, please, don’t turn that mess around to demand payment from me to support their protection.

A cornered and protected energy market is all around simply stupid or at least a prime example of low time preferences. Each additional source of energy increases the total supply of energy and therefore lowers the cost of energy. Each product produced by the lower cost energy will cost less. Purchasing power raises – costs of production lower. The cycle conceivably reaches a point where energy costs are at a practical minimum and everything produced by energy costs less to produce; reverse inflation.

If energy is abundant because everyone is making it and if these renewable energy sources practically run themselves once built; like windmills and solar panels, then, any and every conceivable project becomes less and less expensive to make and more likely to be made; like inhabiting another planet or tracking meteorites that threaten our planet, or cleaning up chromium six dumps.

Cheap abundant energy lowers the need to minimize labor cost below humanitarian levels for two reasons. Lower production costs from lower energy costs free up capital to increase wages and benefits. The labor supply would also tend to dwindle as the people generate their own energy and thereby increasing their own wealth would find less reason to work at low wages. Certainly a house in China that generates 200 dollars worth of energy a month won’t inspire the owner in china to run out and work for 1 dollar a day. Then again who knows what is happening in China?

A person sitting at home generating wealth for doing nothing at all will need more reason to work.

The greater number of people who invest in and realize independent energy creation (as a source of wealth) could reach a point where energy is less valuable than labor – where human life is more valuable than oil.

If you do not see this – reverse inflation – reverse tax – reverse interest – and reverse mortgage scenario created by home energy generation units – then I am more than willing to shake out the bugs. Fear of automation would tend to vanish.

Not sure how you can call it supply and demand when OPEC openly says they are going to curtail barrel per-day production to keep prices at a level they like. When production output is dictated by profit alone, that is NOT supply and demand.