[Editor Note: This discussion is taken from chapter 5 of the author’s Oil, Gas, and Government: The U.S. Experience (Cato Institute: 1996).]
“Allocation regulation, in turn, sought to cure the problems created by price regulation. Government intervention during wartime encounters many examples of regulation begetting other regulation, a major theme of peacetime intervention as well.”
Government direction of economic activities, rare in U.S. history, has typically accompanied wartime situations. In particular, government petroleum planning has occurred during World War I, World War II, and the Korean Conflict. Standby oil and gas planning also followed the Korean Conflict.
General Theory
Economic understanding reaches the conclusion that consumers are best served when entrepreneurs are not subsidized or penalized by government involvement. Conceived abstractly, consumers could be a private individual or even a government agency.…