In general, I’ll avoid discussion of political topics on here. Although some politicize the topic of Oil Company profits, I see it as strictly an economic & morality issue. So, as far as I’m concerned, it’s legal discourse. After hearing all the whining and moaning regarding gas prices, who’s “fault” it is and what the “solution” should be, I have three questions/thoughts regarding the topic.
1) What is the purpose of running a business?
The reason we work is to enable survival by earning compensation in the form of money or other tangible goods that we place value in. Individuals start businesses to conduct their money making endeavors in an organized and efficient way. A business is nothing more than a collection of individuals, all working as a means to achieve one end - money.
2) Does being in need of an item entitle one to that item?
Every day some reporter, politician or everyday citizen speaks of the “need” we have for oil. “We have to have it!!” they say, as if that slogan is a automatic trump for the rights of another individual or collection of.
First off, we don’t need it. We want it. We’ve gotten used to it. We really like the increase in our quality of life that it brings. Second, should our need of it entitle us to getting it at the price we want? If so, they why not apply that rule to other markets? I want my mobile phone bill to be $20 dollars a month. What if it costs Verizon more than $20 per month to provide that service? Should they have to operate at a loss just to satisfy my need? I’m in the market for a new home and I’d love to pay 20K for it. Why don’t we mandate that no homes can exceed that threshold?
3) Another way of looking at it.
I really like music. I like the dobro and there are several players on this planet that I really like to hear. I like to hear Rob Ickes. Rob plays music for a living. That’s his business. That’s his way of utilizing his mind and body to ensure his survival. He plays to make money. I know what some of you are saying - “No way, Rob plays because he loves it!! He’s not in it for the money!” Of course I think he loves it, but I also think that he leverages his expertise and talent to provide for his family. Why wouldn’t he? There is a demand for good dobro talent and he can supply it.
What if one day Rob decided that his time and creative energy should bring in more money. Also, he wants a new guitar and the price of the new guitar had just gone up by 25%. So, he decides he’s going o triple his session rate. Also he’s going to charge $100 per solo concert instead of $50. He certainly has that right doesn’t he? It’s his time, his creativity, his expertise and he’s certainly worked hard to build those assets and put himself in the position to be desirable. One element of his compensation increase is to help out with the cost of a new guitar which has gone up in price… the other is just because he wants more for his time, more return on his investment. Nothing wrong with that.
Unfortunately, I’m a consumer and I’m not sure the $100 concert fee really works with my budget. I’m comfortable paying ~$75, but that extra $25 is too much! What am I going to do? I need to hear Rob play! I’ve gotten used to it!
According to today’s media, politicians and society Rob should be condemned for raising his prices. We don’t care how many years he practiced or how much time he dedicated to becoming the expert that he is. We need music. Our country needs music. We don’t care how much value he’s added to our lives already, we just want more. We don’t like the fact that it’s now going to cost more than we were used to so we should demonize him and get the government involved. They can investigate Rob’s actions and hopefully we can tax all the extra revenue that he’s bringing in due to his new rates. We are entitled to his music and he should be willing to do it for the price that we are comfortable with. If not, he should be financially punished.
Comparing a musician’s talents with a product that fuels our economy is a bit of a stretch but the underlying economic and philosophical principles are identical. It’s unfortunate that we’ve become so dependent on oil within our day to day lives. We can only blame ourselves for that. Equally unfortunate is the concept of punishing other individuals for our self-made circumstance - a trend that is becoming the de facto standard in our country.
Oil companies are just like any other business and should be treated as such. They don’t exist so you can drive to work or heat your home. They execute a very specialized, complex and expensive process that converts natural resources into useful products that fuel our everyday lives and their purpose is to provide those products in exchange for compensation.
Putting gas in my car enables me to drive to a job and make money. I don’t like forking out $3 for a gallon either but it’s significantly cheaper than drilling for and refining my own oil.
