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15191RE: [LandCafe] Re: 70% of oil price is speculation

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  • Harry Pollard
    Feb 27, 2013
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      Jolly good, Matt!

       

      Harry

       

      From: LandCafe@yahoogroups.com [mailto:LandCafe@yahoogroups.com] On Behalf Of mattbieker
      Sent: Wednesday, February 27, 2013 7:12 AM
      To: LandCafe@yahoogroups.com
      Subject: [LandCafe] Re: 70% of oil price is speculation

       

       



      --- In LandCafe@yahoogroups.com, "John" wrote:
      >
      > By the time the oil get to the retail outlet that sells you the refined oil, speculators (economic freeloaders) have driven up prices to extortionate levels. That is obvious. Geoism will tackle that but Georgism, concentrating wholly on LAND, will not.
      >
      > Bank are the biggest oil speculators, keeping tankers outside the limits until the can make a gain and bring them in.

      I'm not sure I buy this. It's pretty basic economic theory that speculators in commodities smooth out prices, thus mitigating sudden shocks. The same is not true of land, of course.

      George says it well in P&P (Book V, Ch. 1)

      "When, with the desire to consume more, there coexist the ability and willingness to produce more, industrial and commercial paralysis cannot be charged either to over-production or to over-consumption. Manifestly, the trouble is that production and consumption cannot meet and satisfy each other.

      How does this inability arise? It is evidently and by common consent the result of speculation. But of speculation in what?

      Certainly not of speculation in things which are the products of labor —in agricultural or mineral productions, or manufactured goods, for the effect of speculation in such things, as is well shown in current treatises that spare me the necessity of illustration, is simply to equalize supply and demand, and to steady the interplay of production and consumption by an action analogous to that of a fly-wheel in a machine.

      Therefore, if speculation be the cause of these industrial depressions, it must be speculation in things not the production of labor, but yet necessary to the exertion of labor in the production of wealth—of things of fixed quantity; that is to say, it must be speculation in land."

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