Oil prices justified? Yes or No?

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skafather84
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06 Jun 2008, 5:48 pm

Awesomelyglorious wrote:

If it were just greed then why would the changes be so chaotic? Greed is constant, gas prices fluctuate. Therefore additional variables are likely present.

define chaotic. to me, the oil prices are more of a hockey stick than al gore could ever wish to dream up.

Sargon
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06 Jun 2008, 6:01 pm

Quote:

define chaotic. to me, the oil prices are more of a hockey stick than al gore could ever wish to dream up.

I believe chaotic could be defined as constantly changing like a random walk (going up then down, then up again, etc). I don't understand that part about the hockey stick and Al Gore.

I'm curious, for those who said oil prices are not justified, do you know what determines the price of oil under the current system? If you think you do, I'd like to hear. If you don't know how, then how can you say they are unjust?

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06 Jun 2008, 6:03 pm

Here. Jeffrey Tucker can give better explanations of "just prices" than I can.

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oscuria
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06 Jun 2008, 6:08 pm

Orwell wrote:

Here. Jeffrey Tucker can give better explanations of "just prices" than I can.

Why do people cry about falling house prices?

"I just moved into this house and it dropped in value! Oh no, who am I going to sell this new house which I just got a mortgage for $$$,$$$ to? Why have YOU forsaken me?"

It is silly this greed people exhibit.

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06 Jun 2008, 6:12 pm

oscuria wrote:

Orwell wrote:

Here. Jeffrey Tucker can give better explanations of "just prices" than I can.

Perhaps. Tucker was more pointing out that people tend to regard things which are not in their favor as unjust. Example: I, as a middle-class white male, view affirmative action as unjust. Asian friends of mine, who hold otherwise conservative viewpoints, are in favor of it. People try to advance their own self-interest, and promoting laws in your own favor is part of that. You may regard it as greedy, I regard it as a good reason to keep economics from being a political question. Ergo libertarianism.

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skafather84
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06 Jun 2008, 6:20 pm

Sargon wrote:

I don't understand that part about the hockey stick and Al Gore.

see an inconvenient truth. he shows temperatures as having risen up in kind of a hockey stick shape where it's a fairly straight line then all of a sudden it scoops upwards.

____/

^ like that, basically. which oil has done that but there doesn't appear to be shortages.

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06 Jun 2008, 6:21 pm

All I know is that price per gallon is going up disproportionately with the price per barrel....

skafather84
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06 Jun 2008, 6:23 pm

Cyanide wrote:

All I know is that price per gallon is going up disproportionately with the price per barrel....

how much oil is used in producing gas?

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06 Jun 2008, 6:25 pm

Cyanide wrote:

All I know is that price per gallon is going up disproportionately with the price per barrel....

Are there other factors involved in the production of gasoline? Perhaps transportation and distribution costs are also a factor? Not everything is so simple.

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Sargon
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06 Jun 2008, 6:26 pm

Quote:

All I know is that price per gallon is going up disproportionately with the price per barrel....

Depends on how you look at it (oil went up $10/barrel today, but we don't see a huge price spike), and even then it hardly implies a "injust" price (especially with so many other factors).

Quote:

see an inconvenient truth. he shows temperatures as having risen up in kind of a hockey stick shape where it's a fairly straight line then all of a sudden it scoops upwards.

In that case, you may want to look at historical real prices (i.e. controlling for inflation) instead of focusing on prices in the past 4 or 5 years (sure prices are high, but historically, prices were also high).

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06 Jun 2008, 6:27 pm

Orwell wrote:

To respond directly to the OP: oil prices are justified because people are still buying oil. The current price of oil is the free-market price (well, plus the taxes) and that is really the only justification a price needs.

I wouldn't call a cartel a "free market"...

Sargon
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06 Jun 2008, 6:29 pm

Quote:

I wouldn't call a cartel a "free market"...

OPEC doesn't set the world price for oil.

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06 Jun 2008, 6:32 pm

To be blunt, the prices are justified.

Weak dollar + increased global demand + unstable mid-east oil supplies = high priced oil.

It sucks yes... but know what? We've had the potential for developing better fuel efficiency, alternate fuels, electric vehicles and many other things for decades... and these things just were not taken seriously back then. Of course we have to wait till we get to this point or worse... but even still it doesn't seem like anything serious is being done to fix this. Of course the real fix is to get us off oil... but again no one takes that seriously.
It could be far worse... There is no shortage of oil... but oil supplies are finite and a shortage will happen eventually... Then it will be a real crisis provided we don't have something to replace oil by then.

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06 Jun 2008, 6:35 pm

Cyanide wrote:

Orwell wrote:

I wouldn't call a cartel a "free market"...

Canada is the biggest source of US oil imports, and they are not part of OPEC. Cartelism can't be the only factor when the single largest producer (if you choose to count all OPEC countries as one monolithic entity out to ruin your life) has less than 50% of the market share. Besides, cartels in reality are next to impossible to sustain unless they are strongly propped up by governments. If you are willing to buy gasoline at the current prices, then those are fair prices.

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Awesomelyglorious
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06 Jun 2008, 6:47 pm

Orwell wrote:

Oddly enough, most people you talk to view the erratic nature of gas prices as indication of a massive conspiracy among oil companies. But really, if they were just greedy, they could better coordinate changes in gas prices to get more money while inciting less bitterness. If they were doing this intentionally, you would have to conclude that they are very foolish as they are making their business a political issue, and there are now threats to their profits once politicians get involved in "punishing" oil companies for earning too much profit.

I find that odd. Demand for gas should not be so erratic where changes would be justified, therefore if you are profit maximizing, it would seem wisest to set a price and stick to it. You are right on the second part as well, a political retaliation would hurt them more in the long run than the high prices in the short run.

oscuria wrote:

The reason is that others should not be subjected for the foolishness of a few.

I agree, which is I don't like government. In government, folly can be seen in terms of objective failure, in individual decision making, we merely have choices based upon values.

oscuria wrote:

Ah, libertarians with their silly beliefs.

Ah, fascists with their stupid follies.

Orwell wrote:

You may mock my beliefs as much as you like. However, I see you are unable to come up with a convincing refutation of them. I tend to argue for libertarianism deontologically though, so if you are interested in utilitarian arguments for it those would probably be better addressed to Awesomelyglorious.

Actually, I argue for libertarianism from more of a deontological standpoint as well, but I engage in utilitarian arguing all of the time.

Quote:

I find nothing in libertarianism that allows for true liberty (in the sense of it being applicable). I compare it to eloquent poetry that is without any impact or meaning.

Well, the issue is what you mean by "true liberty". The term is poorly defined to start off with, however, if we argue that liberty is the right to legitimately control oneself, then libertarianism, which starts off with self-ownership is the system OF true liberty.

oscuria wrote:

It is silly this greed people exhibit.

It is human about this greed people exhibit.

skafather84
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06 Jun 2008, 6:53 pm

Sargon wrote:

Quote:

I wouldn't call a cartel a "free market"...

OPEC doesn't set the world price for oil.

and yet whenever rising oil prices are discussed, it's the middle east that is a result of those prices.

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