Yesterday I filled my car's fuel tank at a price of $2.299 per gallon. Some 35 years earlier I was able to fill up at a price of $0.299 per gallon. Adjusted for inflation, yesterday's price was about $1 per gallon higher than the price I paid 35 years ago.
Should I be outraged? At what? At the fact that a particular type of product now costs more (in real terms) than it did 35 years ago?
If that should outrage me, then I should be overjoyed by the fact that the car I drive now is vastly superior to the one I drove 35 years ago. In fact, my present car, even though it's a moderately priced and popular Japanese make, is vastly superior to almost any car I could have bought at any price 35 years ago. But I'm no more overjoyed by the fact that I can now own an excellent car than I am outraged by that fact that it costs more to fuel that car than it would have cost 35 years ago.
Nor am I overjoyed by the many other products that I enjoy today that are superior to -- and less expensive (in real terms) -- than their counterparts of 35 years ago, or by the many other products that weren't even available to me 35 years ago, or by the many services that weren't available to me 35 years ago.
I'm neither outraged by higher gasoline prices nor overjoyed by a plethora of better, cheaper goods and services because they're simply what I would expect in a dynamic economy based on (relatively) free markets. Such an economy continuously yields better products and services, and competition pushes the prices of those products and services down over time. But not everything gets better, and not all prices go down. The beauty of free markets, however, is that better, less-expensive products and services arise to push aside their inferior, more costly predecessors.
I can't predict what will arise to replace gasoline and the kinds of automobiles that are powered by gasoline. But I can predict that if government will stand out of the way, our dynamic economy will produce such alternatives.
Wednesday, November 30, 2005
Where's the Outrage?
Posted by Loquitur Veritatem at 2:17 PM
Categories: Economics: Principles and Issues