an extremely high influence on the entire economy. An increase in the price of a national strategic economic resource has a direct and immediate effect on the economy. Because of this, these resources must be carefully monitored by the government and price increases outside of defined limits must be reviewed and approved by the government. Next, the financial records for the last ten years of every US based oil company (as well as every oil company that does business in the US) need to be made public. What needs to be disclosed to the public is the cost that each oil company pays for a barrel of crude oil, the total amount of revenue generated by a barrel of oil and the amount of profit that the company makes on each barrel—all on a quarterly basis for the last ten years. It will be clear when the oil companies began to manipulate prices and deceive the public, it will be clear as to the extent of the profits that the oil companies have been making, and it will be clear that prices need to be managed.
Price management should not be limited to oil and its derivatives. While excessive and inordinate gasoline, diesel, heating fuel and natural gas prices have had perhaps a severe impact on the economy and the lives of most Americans, the prices of food, electricity and healthcare have also risen dramatically and inordinately within the past ten years. Like petroleum, these items are controlled by oligopolies that have manipulated their respective markets. Like petroleum, these industries are currently out of control and need immediate government intervention.
Was the price of gasoline at over $4.00 a gallon fair? In 2000 the price of gasoline was $1.25 a gallon and the oil companies were making a decent profit at this price? From 2000 to 2008 the price of gasoline increased about 18.5% per year and the profits for the oil companies increased proportionately. If the price of gasoline was subject to government oversight and could increase by only five percent a year during that time instead of 18.5%, then the current price of gas would have only risen to about $2.40 a gallon in 2008 and it would never have exceeded $4.00 a gallon. If the government limited the price increase of gasoline to five percent per year, the oil companies would still have seen their profits increasing considerably.
The Oil Companies do not want to sell gasoline at a fair price even though a fair price would generate a reasonable profit. The intent and focus of the oil companies is to maximize profits, which they can do primarily by maximizing price and minimizing costs and expenses. The owners and executives of the oil companies hide behind the cloak of the corporation, an amoral yet legal person. Whatever the owners and executives do, as long as it is in the name of the corporation, is neither right nor wrong as the common phrase ‘it is neither right nor wrong, it is just business ’. So, the oil companies are intent on maximizing profits and they are not constrained by morals. From the corporation’s point of view, anything and everything is justified in seeking maximum profits. Wars have been started for the sole purpose of maximizing profits.
Will a corporation deceive consumers by presenting false and misleading information? Absolutely! Will a corporation manipulate the market? Absolutely! Will a corporation engage in unfair business practices in order to eliminate its competition ? Absolutely! The owners and executives of corporations deceive, manipulate and compete unfairly because they hold that it is not they, who deceive, manipulate and compete unfairly—it is the corporation that does so and what the corporation does is neither right nor wrong. Of course, this is wrong and immoral. Yet where is the Christian majority within the United States? Why are Christians silent to these things? Why in many cases are Christians actually engaging in these immoral actions? And why do so many Christians actually espouse the philosophy and principles of radical capitalist economics when it is at variance with Christian principles and the philosophy and principles of Christian economics?
Doesn’t supply and demand control prices? Doesn’t supply and demand drive all economics? Can’t consumers reduce prices by lowering demand? No, no, no! Supply and demand without government oversight and management will not control prices. Supply and demand without government oversight and management does not drive all economics. And consumers do not have the ability to control prices in markets dominated by oligopolies and virtually all markets are controlled today by oligopolies.
What can consumers do to reduce the price of food? What can consumers do to reduce interest rates on mortgage loans, auto loans, or credit card loans? What can consumers do to reduce the amount that a doctor charges for a normal office visit? What can consumers do to reduce the costs of operations and other medical procedures? What can consumers do to reduce the cost of health insurance, auto insurance, or life insurance? What can consumers do to reduce the price of a college education ? What can consumers do to reduce the fees charged by lawyers? What can consumers do to reduce prices on goods or services that they require? Obviously, the answer to every one of these questions is ‘nothing’. A person cannot stop eating. A person cannot stop going to the doctor. A person cannot avoid getting an education.
Capitalism is not a bad thing. In fact, capitalism is a good thing and necessary for the economy. It is the uncontrolled, inordinate, exaggerated, and radical form of capitalism that is bad and unfortunately, it is this variant of capitalism that controls the economy and the government today. It is this uncontrolled or ‘out of control’ capitalism that is the root of the severe problems affecting both the US economy and government today. And it is the modification of capitalism by Christian economic principles that is the solution to these problems.
The theory of supply and demand is the basis for the economics system of this radical form of capitalism. This economic system is a set of theories developed by capitalists for the exclusive benefit of capitalists. The main objective of this system is the domination of the working class by the capitalist class, the domination of the majority by the select few, and the perpetuation of this imbalance on to the end of time. Radical capitalist economics hold that the capitalist is superior to the worker, and the worker is subordinate to the capitalist. In fact, the worker is looked upon as somewhat less than human. This is clear based on how workers are classified within an organization. Workers are no longer considered as personnel (persons), but as resources (human resources) and capital (human capital)—things that are used and things that are owned.
The key theory of radical capitalist economics involves price, supply and demand. While economics is a social science, the theory attempts to establish the relationship between supply, demand and price as a scientific fact. It is amazing how extensive mathematical models have been used to try to demonstrate and prove this theory. The complexity of these models overwhelms students of economics who merely acquiesce and accept these theories out of a kind of religious faith rather than on the strength of their arguments. Underlying the capitalist theory on price, supply and demand; is the theory of maximization of profits. The capitalist theory on supply and demand promotes and supports the maximization of profits for businesses, companies and corporations and ignores the concept of maximizing the wealth of virtually everyone through economic balance and equity
Does price have to increase as demand increases? Does price have to increase in a captive market? The following example provides the answers.
The ABC bakery makes and sells bread. It operates successfully and generates an after tax net profit of fifteen percent. Because of good economic conditions, the bakery experiences an increase in customer demand. Because of this increase in demand, the bakery hires additional workers and buys new equipment. Because of increased demand, the bakery’s sales have increased significantly. The increased sales have resulted in increased profits, yet its percent profit is still fifteen percent. Given the strong demand for bread, the bakery could increase prices in order to increase profits further, but, does it have to raise prices? The customers are happy. They are buying enough bread to satisfy their needs at a fair price. And the bakery is operating near capacity and making a good profit. What good to the customers would come from the bakery increasing the price of bread? Since the customers’ income is limited, an increase in the price of bread will lead to either the customer buying less bread or having to buy less of some other items that they also need. If the customer buys less bread, then how is that good for the bakery and how is that good for the customer? Does price have to increase as demand increases? Certainly not! It is a deceit of radical capitalist economics to make people
