Who's to blame for higher gas prices?

in economics •  7 years ago 

"Who's to Blame for Higher Gas Prices?"

Wrong question. Right question: "Why have gas prices gone up?"

The idea that someone or something must be "to blame" is at the root of so many misunderstandings of how economies work. It assumes intentionality where outcomes are largely emergent. To understand market processes, you need to get away from our evolved disposition to see intentionality where it isn't. Economics requires that we consider the possibility of unplanned order and systematic outcomes that no one intended. That is, as Hayek has said, the start of social science.

Note also that you'd never see "who's to blame for falling gas prices?"

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Hey @honeybee, it is always a pleasure to read one of your economic insights. You are again spot on. People rush to the blame game without understanding how demand and supply works or even more importantly the determinants of demand and supply.

It can be difficult to isolate one particular cause for anything as many things are changing simultaneously. This is also one of main criticisms of computable general equilibrium (CGE). Committing millions of dollars and months of effort to try a find a precise correlation between events and actions when the economy for so many other reasons during the meantime is changing. I much rather focus on the general direction and implications of events.

Getting back to blame games. It is part of human nature to want to blame someone or something for anything bad happening to them. Politicians love to feed off of this as well. It gives them a chance to offer a solution (normally a bad solution but one that fits their agenda quite nicely).

Very eloquent and right! There is no one to blame is the economy dictating prices for various factors.

Also, gas isn't perpetual and there is a limited amount of oil on eart as we burn gas we are effectively making oil more scarce and as a consquences prices rise.

Thank you for posting your thoughts on the manner.