Letters to the Editor
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In praise of speculators
Are the oil speculators really so bad?
Let's assume for the sake of argument that higher prices really are the result of activity by futures traders - and not a reflection of current real demand outstripping supply. Aren't the speculators simply rationally anticipating future shortage? In the end, the consequences match the goals of policy makers concerned about energy supply:
- Consumers curtail their energy use
- Markets are incentivized to develop alternative energy resources
- Policy makers have public support to push through energy policies
In other words, the side effect of speculation is to promote progressive energy policies in advance of the real crisis (when we actually have a supply shortfall). Isn't this exactly how we'd want things to happen in an ideal world?
Let's note that scientists have been unable to mobilize the populace to do much to change their consumption habits, and politicians have had little support to implement progressive energy policy. Politics requires crisis.
Would consumers actually curtail their energy usage without being forced to? Would politicians be able to push progressive energy policies? Would as much investment capital be available for alternative energy were gas prices not so high? Isn't it better that all these things happen now rather than just when oil supplies are actually vanishing?
It strikes me we should be thankful for the speculators who've managed to achieve through trades what the wise and outspoken could not through words.