You may be familiar with the "Don’t buy gas May 15th" e-mails, notifications, and so forth. You see it on any sort of advertisements from events or groups on facebook.com, to random e-mails, and plenty of other sources. The plan is simple: for everyone and his brother to boycott gasoline on May 15th, 2007. The idea is that gasoline companies, having no business on one day in particular, would be forced by the laws of economics to lower their prices. Sound good? Well let’s take a look!Statistics are a good way to help us learn about economics. But statistics can be overrated. Statistics back up the facts. Statistics show what did happen, and give a good idea of what will happen. If two big dogs have another big dog, there is a chance that there is a sort of pattern or relationship between two big dogs having a big dog. But statistics are not always accurate either. They do not lie, but those who live by statistics can deceive themselves.
You may be familiar with the quote "A broken clock is right twice a day." Sometimes, "A" may cause "B" but "A" may not always cause "B." So you ask, what does this have to do with whether or not we pump gas on May 15th 2007? Well it does because it shows us that we can not always use statistics. Statistics can attest to the pure absolute laws of the universe, and to common sense. Neither true laws, nor common sense lie. Unfortunately, common sense is not too common.
Therefore, I desire to present my opinion on this case with common sense approach, with common sense more in mind than statistics. It gives us better results. Common sense is universal. Statistics are particular. Statistics can often help defend what common sense tells us. Some statistics, relating to what has happened, are factual. However making statistics direct our future is only relative. Past experiences may or may not happen in the same way. Having said that, I do not know all the statistics. Both sides of this argument (to boycott or not to boycott gasoline on May 15th) seem to tell me that statistics are in their favor. Once again, either side can take statistics from different times in totally different situations, to help make their case show truth. People would rather hear "We tried this before, and (fill in the blank) happened," than they would "Okay class, now we begin Economics 101. According to Adam Smith…"
But economics 101 probably tells more and has more accuracy than what you would hear from the media reporting about what happened twenty years ago. We need pure laws of economics, and pure laws of common sense to tell us what will probably happen. From economics 101, I see two ways of looking at this.
One way would be to say that sense the people control the free market, then what would be wrong with the people at least trying some way to lower the price of gasoline. Keep in mind, that this way of looking at this, theoretically only shows two things: that the government should not interfere with the situation on either end (promoting/forcing the idea, or forcing the idea not to take effect, perhaps by forcing you to buy gasoline on May 15th), and that this is merely for now, only an idea, not a given fact that it would affect the price of gasoline or not. Whether or not it will is still in question.
But the other way of looking at this, takes it one step farther: whether or not the proposed idea would work. When I look at the issue on this standpoint, I do not believe that it would work. Suppose that someone owes somebody twenty-one dollars a week, and can pay it in any form that they wish, so long as on Sunday, the person who owes money has paid twenty-one dollars to the person is owed the money. Suppose that the person who owes money pays three dollars a day (three times seven is twenty-one). Now suppose that the person is angry with loosing three dollars every day, and decides not to pay anything Sunday through Saturday, leaving only the next Sunday to pay twenty-one dollars. The person who is owed the money is going to still charge twenty-one dollars. He would not get discouraged and lower the price.
It is true that someone may lower their prices in order to keep with competition, or to earn business in a less necessary field. For instance, yardwork (what I do), is not as highly demanded as other jobs. Most people do their own yardwork. If no one hires me, I may lower my prices to try to drum up some business.
But gasoline is different than yardwork. Your normal every-day citizens are not going to go into places of the world they’ve never been, dig a trench, dig up oil, and then convert it into gasoline, all just to drive a car. They’ll pay people to do that. Division of labor, and competing oil companies help make this worth it. Obviously, you will not walk everywhere, or convert to horse-and-buggies. If you do not buy gasoline on one day, you will need the gasoline on other days. If you need to fill up your tank either the 14th, 15th, or 16th, then if you don’t do it on the 15th, then you will either the 14th or the 16th. This, perhaps, is the best simple and straight-forward approach to the issue. You will need to buy just as much gas, so long as you burn the same amount of gas (depending on you gas mileage, and miles driven). Both of these will theoretically be the same.
Economics 101 tells us that supply and demand affect the price of materials. The demand for gas is high. If the whole world suddenly ran out of oil and gas, we would be much worse off than we are now. Do you really want to walk across town, or whip horses and ride in a buggy across town? Of course not! As far as the high prices, don’t freak about it. It does not help. For those who do love statistics, consider this: when adjusted for inflation, gasoline is not really as high as it was during much time in the 1970’s, 1980’s, or even part of the 1990’s. These statistics are factual statistics, not relative statistics. To suggest that this means that gas prices will drop due to inflation would be relative, not statistic, because we have not seen the future gas prices, and we do not know what they will be.
If you are worried about the price, what can you do? You could try to decrease the amount of gas you use. However, that would be hard. You may have to give up something you would not like to such as church, scouts, ceramics, or any other optional even you go to. You could try to drive a better fuel-efficient vehicle. You could do this, but you may have to buy a new vehicle. But perhaps the best way to help the cause for lower prices, is to not complain. When you complain, the government is "there to help." But economics 101 with statistics and the past to back it up, show that when the government is "there to help" is often in reality making the situation worse. For that, I would rather a boycott, then a price cap, although neither one would really work.
Yet people still want to give it a try, and I say, let them go for it. If they find happiness in a worthless cause, then so let them. I hope that anyone who thought this would work would see the other side to the situation- the common sense, and basic economics behind it all. People claim that we should be optimistic toward the situation, as if that giving it a try would not hurt. It may not hurt, but the rationality is that it does not help. Supply and demand affect the price, not our optimistic attitude. Perhaps we should be more optimistic that the price will go down due to competition. It may or may not, but this is a better place to be optimistic than a worthless cause is. The only way optimism and pessimism takes effect tomorrow is depending on whether you look at your tank half full or half empty.
