Do Americans Want Oil Socialism?
Published in Hospodářské noviny
(Czech Republic) on 20 March 2012
by Kryštof Kozák (link to
original)
Gas prices at American pumps have reached a record 20 Czech crowns per liter (about $4 per gallon.) Because of this, the ranks of citizens and political commentators who consider it further proof of the president’s critical failure in office have heaped their wrath on Obama’s head.
Complaints about high gas prices clearly point to a grave internal split among a wide range of Americans regarding the federal government and free market principles. On the one hand, they want the weakest possible government, the lowest possible taxes and the freest possible market. However, when it comes to real-life problems with the high price of a key commodity, suddenly it’s the federal government that's supposed to solve the issue.
The simplest way the state could fulfill these demands would be to nationalize private oil companies, refineries and gas stations, as was done in neighboring Mexico in 1938, for example. Then the state would have direct influence in oil markets and possibly even set prices. The U.S. Army, moreover, would have a clear mandate: to operate globally in the interest of the state with the goal of ensuring cheap resources for the new Department of Cheap Oil.
Do Americans really wish for such a dramatic increase in the authority of the central government? Probably not; nonetheless, the problem points to increasing populism in political rhetoric and to a serious lack of thoughtful deliberation on the optimal role of the public sector in the state’s economy.
Ever since the first shocks in oil markets in the 1970s, it has been clear that oil prices can rise sharply because their largest reserves are located in geopolitically unstable regions. Since that time, instead of U.S. administrations supporting basic research in the area of alternative technologies and building more energy-efficient transportation infrastructures (e.g., modern high-speed rail,) they have limited themselves to repeated showy rhetorical proclamations on the need to reduce dependence on oil imports, which they have never managed to put into practice. To this day, America still imports more than half of what it consumes; for the daily requirement of 10 million barrels of oil, we’re talking about roughly one billion dollars every single day.
The thing is that the powerful lobbyists of oil companies – which generate enormous profits: 600 billion Czech crowns for ExxonMobil in 2011 – and of auto manufacturers have successfully pressured the government into maintaining laws and regulations favoring a marked dependence on oil imports, although the environment is damaged and city air is ruined, as a result. Moreover, dependence on oil contributes to support for problematic authoritarian regimes, which live off of oil exports.
High gas prices may help those voices that have long called for American society as a whole to start dealing with the problem of dependency on oil imports more seriously and comprehensively. The problem is serious enough that a solution will require the cooperation of market participants, the government and consumers themselves, who can support newly emerging alternatives with their economic votes. Superficial campaign rhetoric placing the blame for expensive gas on the government alone only delays a solution to the problem and clouds the issue—until Americans long in the depths of their souls for the introduction of oil socialism.
Complaints about high gas prices clearly point to a grave internal split among a wide range of Americans regarding the federal government and free market principles. On the one hand, they want the weakest possible government, the lowest possible taxes and the freest possible market. However, when it comes to real-life problems with the high price of a key commodity, suddenly it’s the federal government that's supposed to solve the issue.
The simplest way the state could fulfill these demands would be to nationalize private oil companies, refineries and gas stations, as was done in neighboring Mexico in 1938, for example. Then the state would have direct influence in oil markets and possibly even set prices. The U.S. Army, moreover, would have a clear mandate: to operate globally in the interest of the state with the goal of ensuring cheap resources for the new Department of Cheap Oil.
Do Americans really wish for such a dramatic increase in the authority of the central government? Probably not; nonetheless, the problem points to increasing populism in political rhetoric and to a serious lack of thoughtful deliberation on the optimal role of the public sector in the state’s economy.
Ever since the first shocks in oil markets in the 1970s, it has been clear that oil prices can rise sharply because their largest reserves are located in geopolitically unstable regions. Since that time, instead of U.S. administrations supporting basic research in the area of alternative technologies and building more energy-efficient transportation infrastructures (e.g., modern high-speed rail,) they have limited themselves to repeated showy rhetorical proclamations on the need to reduce dependence on oil imports, which they have never managed to put into practice. To this day, America still imports more than half of what it consumes; for the daily requirement of 10 million barrels of oil, we’re talking about roughly one billion dollars every single day.
The thing is that the powerful lobbyists of oil companies – which generate enormous profits: 600 billion Czech crowns for ExxonMobil in 2011 – and of auto manufacturers have successfully pressured the government into maintaining laws and regulations favoring a marked dependence on oil imports, although the environment is damaged and city air is ruined, as a result. Moreover, dependence on oil contributes to support for problematic authoritarian regimes, which live off of oil exports.
High gas prices may help those voices that have long called for American society as a whole to start dealing with the problem of dependency on oil imports more seriously and comprehensively. The problem is serious enough that a solution will require the cooperation of market participants, the government and consumers themselves, who can support newly emerging alternatives with their economic votes. Superficial campaign rhetoric placing the blame for expensive gas on the government alone only delays a solution to the problem and clouds the issue—until Americans long in the depths of their souls for the introduction of oil socialism.
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