Lessons in "The Market"
Learned by Josh Marshall, lefty blogger at Talking Points Memo. First, he starts out the post being inspired.
I happened yesterday on this article in The Atlantic by Jonathan Rauch about the Chevy Volt. GM is throwing tons of resources into a breakneck schedule to produce an electric powered car that is dramatically more advanced than the hybrids currently on the market. The question is whether they can have the technology developed in time for release date.
It’s sort of inspiring to see an American company try something so ambitious.
American companies try ambitious things all the time. Energy companies might try this more often, if there wasn’t the ever-present concern that their return-on-investment might get sucked away by the government as "windfall profit". The freedom to innovate while keeping the fruits of your labor, and responding to needs by the consumer, is a feature of what we call "the market". Familiarizing oneself with the concept would be very helpful in the current economic climate.
Josh then finds in himself a newfound concern about alternative energy sources. Despite his upbringing, he says, he was never really focused on it much.
But that’s changed over the last several months: most of the key issues that face us today, from environmental issues proper, to our geostrategic position vs. other great powers and the future of our economy, all turn on our reliance on fossil fuels. Not just ‘foreign’ ones, all of them.
And what has likely contributed heavily to this rediscovered concern? How about the gas prices that have been rising quickly over "the last several month"? But that’s nothing to be ashamed of. The price of an item is an amazing bit of information that gives suppliers knowledge of short-term future demand, gives consumers an incentive to buy more or less of a product, and, depending on the price itself, gives innovators an incentive to come up with new and better way to supply the need. This is a feature of what we call "the market". (Detect a pattern here?)
This is instead of nationalizing the particular industry or forcing the price to an artificially lower value which could easily bring about shortages (just ask Venezuelans) and stifle innovation. I mean, a new source of a product just may cost a bit more as it’s getting ramped up, and forcing existing prices lower make consumers less likely to make the transition, unless you force them to do so. The keyword here, which must be used over and over again, is "force". And when your government is forcing all of your economic decisions on you, this is a feature of what we call "socialism".
Would Marshall know the free market it if jumped out and bit him? I think it just did, but according to the title of his post, he’s "shocked, shocked". Likely that’s an intentional pun on the Chevy Volt subject, but his surprise at seeing American innovation, and his lack of understanding of his changing attitudes tells me that he apparently doesn’t recognize the source of those teeth marks.
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