The Market vs. Rationing.

[elfs]

I'm with Jane Galt on this one:

If you cap the price (as some people are making noises about), rationing will take the form of queuing: people will have to wait in long lines for gasoline. This sounds just fine to some activists and academics, apparently ones with a lot of time on their hands. The rest of us, who do not think it would be fun to live in the Soviet Union, recognize that, painful as it may be, prices are in general a better way to allocate scarce resources than lines.

But it hurts! I hear you moan. "What about my Labor Day driving?" Let me translate. What you're really saying when you say "I don't want to pay more for gas" is "I don't want to either use less gas, or use less of anything else". But as a society, we have to use less gas. You, or someone else, is going to have to consume less of the stuff, because we have less than we used to. If you don't want to be one of the people using less gas, then you have to be one of the people using less of everything else. Thus will the market pretty efficiently strip out driving by those who value it least.

But high prices don't just make people want to drive less; they make people want to supply more.