Turns out you can’t arbitrarily decide prices.
In an interview with WFTV, President Obama suddenly discovered what it is that has troubled Americans about Marxism for well over a century. The crucial exchange occurred when Obama was asked about gas prices. “Well, as long as gas prices are going up, people are going to feel like I’m not doing enough, and I understand that,” Obama observed. “Ultimately, though, there’s no silver bullet.”
Then came the critical question. “Your opponents say they can get gas to the $2.50 range,” said the interviewer. “What do you think Americans should be OK with?” Obama, avoiding the question, shrugged, “First of all, nobody believes that. They know that’s just politics. Anybody who says we can get gas down to two bucks a gallon just isn’t telling the truth.”
But President Obama didn’t answer the question.
The real question is why he couldn’t. After all, this is a president who has stated over and over that prices and wages should be set on the basis of fairness. He tried to claw back Wall Street bonuses because investment bankers were making more than they “deserved” to make; he says the rich should pay their “fair share.”
The problem, of course, is that nobody knows what is fair—for wages, bonuses, or gas prices. Is it really fair for some people to pay a far lower percentage of their income to the federal government than others? Is it fair that some people buy ground chuck and others New York strip?
That he struggled to say how much Americans should have to pay for gas should not have surprised the president. Economists have struggled for centuries to determine what people deserve to pay for precious commodities. . Invariably, they insist on more control of the economy, stating that the blind hand of the market simply cannot produce a fair and just system. That’s why Thomas Edison wrote, “What is wanted is some person familiar with the selling and buying, the technical as well as the financial end of all industries, to devise some generic scheme that business can work on.”
Top-down technocrats fail to understand how an undirected system can work so well. That’s because they don’t understand freedom. How can hundreds of millions of people, all pursuing their self-interest, create more wealth than hundreds of millions of people all directed toward a single end? How can fairness by achieved by seeming randomness rather than by hierarchical control of the right-minded?
The answer is deceptively simple: all those people pursuing self interest are pursuing the same end. That end is a better standard of living. If you work hard and bargain for the lowest price, you will enjoy a better standard of living. If everyone around you does it, they will too. If, however, you have a massive government standing over you, telling you who should win and who should lose, the system of incentives stops working. You no longer have to work hard to make a living if the government provides you one by taking from a third party and giving you a handout; you no longer have to bargain for lower prices if the government sets a ceiling or a floor on prices. Now, instead of everyone working for the same personal goal, everyone relies on the government to tell them what is fair. And when government decides what is fair, nothing ever is.
Now, this isn’t to say that Obama will recognize the folly of his Marxist philosophy. He won’t. He’ll ignore the internal contradiction here. He’ll maintain that while nobody can decide the fair price of gas at the pump, he can certainly decide the fair profit margin for gas companies. He’ll determine that certain executives take less pay for the good of the whole, while determining that certain teachers, police officers, firefighters, and union members make more money and are therefore able to buy more gasoline at whatever the pump price.
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