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10.05.2006

Government Intervention

Got this from Whiskey & Gunpowder:

"It’s a broadly accepted principle that government interference in the private production of resources creates economic consequences. The extent of the interference usually dictates the severity of the consequences. The Soviet Union was notorious for its hopelessly inept price and quota system that led to rationing and shortages. Central planning commissions dictating supply, capital investment, and demand is clearly a fool’s errand in an infinitely complex modern industrialized economy.

How about the establishment of a pure free market to determine energy prices? A “pure” free market cannot exist as long as energy prices are measured in an elastic paper currency. But leaving this complication aside, history teaches that the freer the market, the more efficiently and quickly supply can be developed to satisfy demand."

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