After oil and gasoline prices continued their relentless march up earlier this year, it was nice to have some relief at the pump in May and June. However, since the end of June, prices of WTI crude oil is up over 15%, Brent crude oil is up about 25%, and retail gasoline is up over 7%. Oil and gasoline prices reached three-month highs last week and the Energy Information Administration (EIA) increased their 2012 forecasts of these prices.
There is no doubt that these higher prices will grab the attention of news outlets, policy makers, and the public. With this increased attention, political rhetoric regarding fantasies of governmental regulations and market manipulations will likely reemerge as catalysts to lower these prices.
The less likely scenario is increased awareness on the impacts that central banks, particularly the Federal Reserve, have on these petroleum prices by changes in the money supply.…
Editor’s note: As the United States commemorates the 40th anniversary of Earth Day we can expect to hear various commentators bemoan the growth in population, consumption, and carbon emissions driven by fossil-fueled technologies. We will be told that this is unsustainable, that we are running out of resources, that prices are inevitably headed up, and, worse, that such consumption reduces both environmental and human well-being. In this worldview, industrialization and economic development are the inventions of the Devil; de-industrialization and de-development will be our savior.
In this series of posts, Indur M. Goklany will compare the above Neo-Malthusian view of industrialization, economic growth, and technological change against empirical data on human well-being from the age of industrialization. First, he will revisit the bet made in 1980 by Julian Simon and Paul Ehrlich on the direction of commodity prices, and examine long-term trends in the prices and affordability of various commodities, specifically, metals and food, going back to at least 1900.…