Speculation only raises prices when investors think the price will be higher in the future, and then subsequently stockpile oil to see later at the higher price. The decrease in supply then pushes prices up.
But there are not any huge private stockpiles of oil. The Iraq war might have encouraged governments to increase strategic reserves, but the most estimates I've seen attribute $5-$10 per barrel of the oil cost to the Iraq war.
But that's only about 10% of the increase in the last 4 years. Unfortunately, most of the increase is due to unexpectedly high demand from the developing world.
A lot of development economists consider Mexico and Libya to be first world countries as well.
But Russia is a bit of an outlier. They have a more educated populace then many Western European countries, several extremely advanced industries, well developed capital markets...
Really? I'm more worried about China's long term growth prospects then Russia's. Russia is an industrialized first world country. They are economically dependent on high oil prices, but I don't think oil prices will drop below $70 a barrel in the next 20 years.
China on the other hand, is an ethnic powderkeg(Tibet is just the tip of the iceberg) only kept together by guns and economic growth. From an economic standpoint, they have to deal with long-term environmental damage on a never before seen scale, a rapidly aging economy(unexpected side-effect of the one child policy), and very high rates of inflation.
If I had to pick, I'd say that Russa seems like the better bet.
"Explain to me why there is one rule for property and another for creative works. Is a garden not a creative work? ditto architecture, yet we allow the ownership rights on those to last forever."
Quite simply, because property laws of any kind exist to maximize social welfare.
Even as recently as two hundred years ago, property rights were very rare. In most societies, everything from farms to wells wells considered communally owned. Despite the romantic illusions of comradeship that such policies inspire, these set-ups did not work very well. People do not maintain communal property as much as would be optimal, due to the tragedy of the commons, and worse, communal goods are prone to over-utilization. This problem was particularly bad in the common grazing areas that farmers shared(known as the commons).
Faced with this, a very artificial concept was imposed, land ownership, in order to give people incentives to maintain their property and use it in a sustainable manner. (For a mathematical treatment of this, see Coase's Theorem)
So the commons were fenced, and crop yields soared, and the country was better off as a whole. Over the next century, industrialized societies slowly relegated communal sharing to the history books(Though the same transition is currently occurring in nations such as Morocco).
Since the primary purpose of allowing land ownership(Which is at it's heart, a government promise to shoot anyone who comes on your land without permission), is to give you an incentive to maintain property, it makes sense to make such rights perpetual. Otherwise you would refrain from preventing problems that occur "after your lease runs out".
With intellectual property however, the motive is different. Because it is either impossible or extremely difficult to charge for ideas, ideas will be under-produced in an unfettered capitalist economy. One method of compensating for this is to grant a government enforced monopoly on the idea and it's derivatives to the creator for a period of time, so as to give creators an incentive to create more ideas.
But there is a problem with this. There is decreasing marginal return to money: That is,when you are rich, an additional dollar makes one less happy then when you are poor(This is not a leftist idea, but a rather straightforward result from very basic economic assumptions.). Because of this, extending copyright periods has complicated effects.
On one hand, increasing copyright periods increases the money an artist can expect from work in the future, so the artist has a greater incentive to produce work at the present. On the other hand, artists can now profit more off of their previous works, so they have a decreased incentive to work. These two effects battle each other, and determining the copyright period that maximizes incentives to produce requires a good deal of math. But economists have crunched the numbers, and most estimates are that the optimal copyright period is around 12-14 years.
So, short answer: It's in the social interest for copyrights to expire, but it is not in the social interest for property rights to expire; At least over the time frames you are talking about, Sometimes the presence of absolutely huge land owners(Like the Catholic church owning 90% of the land in Mexico pre-land reform) makes Coase's theorem break down, requiring some sort of redistribution.
I'd like to know what your response is to research that indicates that copyright periods are currently far too long to maximise content production(In a nutshell, artists can coast off of their previous work).
First, the US does not have any "green taxes"(at least not on a federal level). There are no Carbon taxes either. There are SO2 credits, but that is not relevant to the oil industry(Especially since most oil is imported from abroad). More specifically, we have no tariffs on imported oil.
Let me isolate this, because it's the most important point: About two thirds of our oil comes from overseas. Because of this, the only relevant taxes are the ones directly levied at the pump.
Meanwhile, the gp's central thesis, that the rise in gas prices were due to taxes, is incorrect. Every single type of tax(Capital, income, sales, gasoline, property...) has either decreased or held steady over the last 4 years. In that time, oil prices have gone up 225%.
If there was competition, then price would collapse to marginal cost. And when I say competition, I mean like 5 or 10 ISP's serving any particular customer, not 2 or 3. Otherwise game theory shows that prices will converge above marginal cost.
I was being loose with numbers. The price of oil hit $40 per barrel in 2004, it is now at roughly $105 per barrel. That's a 265% increase in 4 years. Inflation over the same period has been 13%
As a quick nitpick, if inflation varies from 2-4% uniformly, it is not mathematically correct to assume the constant average interest rate over the period(8% interest followed by 0% interest is not the same as 4% interest.). It's a bit of a tricky problem, but for a large number of years, you can use the multiplicative law of large numbers and the Log-Normal distribution.
Assuming inflation randomly distributed in the interval [2,4], 1.75 is the correct answer, not 1.81. And the actual rate of inflation was 1.87 .
"Although not entirely discounting the potential role of monetary or speculative factors, I'm therefore inclined to try to interpret much of the relative price movements as resulting from the same factors that have always made commodity prices much more cyclically sensitive than other prices."
As for your dollar comment, it will effect the oil price in the intermediate to long term, but right now, the effect has been small. This is because many of the world's biggest oil producers have dollar pegged currencies(Saudi Arabia).
It really sucks for them, but it insulates us from a good part of the effect.
I'm not sure why you're so angry about Corporate Bonuses. It's not like it effects oil price. We're at the point where actual costs of production are a negligible component of oil prices.
And there is nothing particularly wrong with this. Oil companies had the foresight(or luck, most likely) to buy up oil production assets at low prices before global demand unexpectedly shot up. fixed supply + skyrocketing demand=big price increase.
The idea you are alluding to, that oil companies should pass the costs down to the consumers in the form of cheaper gasoline, is bankrupt. If the price of gasoline was any lower then market price, there would be shortages. And the loss in consumer surplus caused by shortages(Wastes of time as we wait in line, fights over limited product, etc) are quite a bit more costly then the gain consumers would experience from the price decrease.
Mind you, you could tax those bonus's away. But I think that establishing a government position of taxing all unexpected gains might effect capital purchase decisions.
Yes, but OPEC is about 30% of the market, and as you mentioned, they are pretty ineffective at cooperation. At this point, OPEC is pretty close to their theoretical production limit, and they have no ability to drive prices down further.
Gasoline taxes are a horrible way to decrease carbon emissions. Most CO2 emissions come from coal plants and industrial processes, so leaving them untaxed will not have much of an effect. For actual solutions to global warming, do some reading on Carbon credits or Carbon taxes.
When was the last time gas taxes were raised? 1996? Oh... So that means that the tripling in gas prices since year 2000 was due to something other than government?
"I took it as trite, but here: Causes of Rape: "Warren Farrell... [noted] that (male-female) rape statistics show young and sexually attractive females are raped far more often than older, less sexually attractive females."
What exactly and how broad are your experiences that differ, that would make you a credible authority to refute this?"
I did some volunteer work at a teenage health clinic, but I don't have any experience with Rape. And disclaimer, I don't have any formal background in criminology(Just math, game theory, some theoretical bio). So no, I'm not a credible authority at all.
As far as rape and abuse go, they are overwhelmingly committed by people who are close to the victim, not strangers. I don't see how attractiveness would be very relevant when a father or close friend decide to rape somebody. On one hand, you could argue that attractive people tend to have more friends, and therefore more potential rapists. But on the other hand, you could argue that attractive people are alone less. There are a billion other potential explanations(The imagination goes crazy when considering the effects on support structure), and in the absence of actual studies that test attractiveness of rape victims(try to get a grant for that), I'd say there doesn't seem to be a clear explanation. But I could be wrong, let me know.
Stalking is a different animal. It's usually a mostly emotional process in the mind of a stalker. It's very common for stalkers to be intimidated by beautiful woman, instead going after somewhat uglier but more accessible girls instead. I don't have any statistics for that, but I think the effect is significant enough to throw off a simple linear relationship.
"Pretty sure I recall that from pre-internet publications, though it circulates to the top, from time to time. The only reference could find offhand is Is acne really a disease?: a theory of acne as an evolutionarily significant, high-order psychoneuroimmune interaction timed to cortical development with a crucial role in mate choice. Medical Hypotheses, Volume 62, Issue 3, Pages 462-469, which is only a summary and merely alludes to my conjecture. You can always drop by a medical library to check it out and post a summary, here.:) I'd like to find a solid reference for it, but alas, the internet has failed me on this one."
I think I might do that tomorrow. Thanks for the tip, I had never really considered the evolutionary utility of acne.
So the presence of error completely negates a empirical metric? Remember, the probability that two observers making a real valued measurement achieve the same result is zero.
If a rule always held up perfectly(or even usually held up perfectly) or generated the same results each time it was applied, it would be a theoretical rule, not an empirical one. It's the difference between Netwon's law of Acceleration and Orkun's rule.
Slashdot Mirror
But there are not any huge private stockpiles of oil. The Iraq war might have encouraged governments to increase strategic reserves, but the most estimates I've seen attribute $5-$10 per barrel of the oil cost to the Iraq war.
But that's only about 10% of the increase in the last 4 years. Unfortunately, most of the increase is due to unexpectedly high demand from the developing world.
But Russia is a bit of an outlier. They have a more educated populace then many Western European countries, several extremely advanced industries, well developed capital markets...
China on the other hand, is an ethnic powderkeg(Tibet is just the tip of the iceberg) only kept together by guns and economic growth. From an economic standpoint, they have to deal with long-term environmental damage on a never before seen scale, a rapidly aging economy(unexpected side-effect of the one child policy), and very high rates of inflation.
If I had to pick, I'd say that Russa seems like the better bet.
If they cooperated with NASA during the heat of the cold war, I don't imagine it would be particularly toxic now.
Quite simply, because property laws of any kind exist to maximize social welfare.
Even as recently as two hundred years ago, property rights were very rare. In most societies, everything from farms to wells wells considered communally owned. Despite the romantic illusions of comradeship that such policies inspire, these set-ups did not work very well. People do not maintain communal property as much as would be optimal, due to the tragedy of the commons, and worse, communal goods are prone to over-utilization. This problem was particularly bad in the common grazing areas that farmers shared(known as the commons).
Faced with this, a very artificial concept was imposed, land ownership, in order to give people incentives to maintain their property and use it in a sustainable manner. (For a mathematical treatment of this, see Coase's Theorem)
So the commons were fenced, and crop yields soared, and the country was better off as a whole. Over the next century, industrialized societies slowly relegated communal sharing to the history books(Though the same transition is currently occurring in nations such as Morocco).
Since the primary purpose of allowing land ownership(Which is at it's heart, a government promise to shoot anyone who comes on your land without permission), is to give you an incentive to maintain property, it makes sense to make such rights perpetual. Otherwise you would refrain from preventing problems that occur "after your lease runs out".
With intellectual property however, the motive is different. Because it is either impossible or extremely difficult to charge for ideas, ideas will be under-produced in an unfettered capitalist economy. One method of compensating for this is to grant a government enforced monopoly on the idea and it's derivatives to the creator for a period of time, so as to give creators an incentive to create more ideas.
But there is a problem with this. There is decreasing marginal return to money: That is,when you are rich, an additional dollar makes one less happy then when you are poor(This is not a leftist idea, but a rather straightforward result from very basic economic assumptions.). Because of this, extending copyright periods has complicated effects.
On one hand, increasing copyright periods increases the money an artist can expect from work in the future, so the artist has a greater incentive to produce work at the present. On the other hand, artists can now profit more off of their previous works, so they have a decreased incentive to work. These two effects battle each other, and determining the copyright period that maximizes incentives to produce requires a good deal of math. But economists have crunched the numbers, and most estimates are that the optimal copyright period is around 12-14 years.
So, short answer: It's in the social interest for copyrights to expire, but it is not in the social interest for property rights to expire; At least over the time frames you are talking about, Sometimes the presence of absolutely huge land owners(Like the Catholic church owning 90% of the land in Mexico pre-land reform) makes Coase's theorem break down, requiring some sort of redistribution.
But I challenge some fellow demonoid members to share as well.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=684425
That might pose a problem. There is a reason that the fed expands money supply.
I'd like to know what your response is to research that indicates that copyright periods are currently far too long to maximise content production(In a nutshell, artists can coast off of their previous work).
Yeah, I second that. I have some too.
Let me isolate this, because it's the most important point: About two thirds of our oil comes from overseas. Because of this, the only relevant taxes are the ones directly levied at the pump.
Meanwhile, the gp's central thesis, that the rise in gas prices were due to taxes, is incorrect. Every single type of tax(Capital, income, sales, gasoline, property...) has either decreased or held steady over the last 4 years. In that time, oil prices have gone up 225%.
No, the charging per seat is a much better idea. Much like charging per bit.
You are against movie theaters charging per movie as well?
Unfortunately....
As a quick nitpick, if inflation varies from 2-4% uniformly, it is not mathematically correct to assume the constant average interest rate over the period(8% interest followed by 0% interest is not the same as 4% interest.). It's a bit of a tricky problem, but for a large number of years, you can use the multiplicative law of large numbers and the Log-Normal distribution.
Assuming inflation randomly distributed in the interval [2,4], 1.75 is the correct answer, not 1.81. And the actual rate of inflation was 1.87 .
"Although not entirely discounting the potential role of monetary or speculative factors, I'm therefore inclined to try to interpret much of the relative price movements as resulting from the same factors that have always made commodity prices much more cyclically sensitive than other prices."
As for your dollar comment, it will effect the oil price in the intermediate to long term, but right now, the effect has been small. This is because many of the world's biggest oil producers have dollar pegged currencies(Saudi Arabia).
It really sucks for them, but it insulates us from a good part of the effect.
And there is nothing particularly wrong with this. Oil companies had the foresight(or luck, most likely) to buy up oil production assets at low prices before global demand unexpectedly shot up. fixed supply + skyrocketing demand=big price increase.
The idea you are alluding to, that oil companies should pass the costs down to the consumers in the form of cheaper gasoline, is bankrupt. If the price of gasoline was any lower then market price, there would be shortages. And the loss in consumer surplus caused by shortages(Wastes of time as we wait in line, fights over limited product, etc) are quite a bit more costly then the gain consumers would experience from the price decrease.
Mind you, you could tax those bonus's away. But I think that establishing a government position of taxing all unexpected gains might effect capital purchase decisions.
Inflation? 2-4 percent every year since the mid 80's. Not enough to even be a significant factor in a 200% expansion.
Yes, but OPEC is about 30% of the market, and as you mentioned, they are pretty ineffective at cooperation. At this point, OPEC is pretty close to their theoretical production limit, and they have no ability to drive prices down further.
Gasoline taxes are a horrible way to decrease carbon emissions. Most CO2 emissions come from coal plants and industrial processes, so leaving them untaxed will not have much of an effect. For actual solutions to global warming, do some reading on Carbon credits or Carbon taxes.
When was the last time gas taxes were raised? 1996? Oh... So that means that the tripling in gas prices since year 2000 was due to something other than government?
Exxon couldn't effect the intermediate-term price of oil if they wanted to. They have every incentive to expand production.
It's extremely active. Just look at the private sector.
Something tells me that philosophers could not understand a word of advanced Math logic. Of course, neither could most Mathematicians...
What exactly and how broad are your experiences that differ, that would make you a credible authority to refute this?"
I did some volunteer work at a teenage health clinic, but I don't have any experience with Rape. And disclaimer, I don't have any formal background in criminology(Just math, game theory, some theoretical bio). So no, I'm not a credible authority at all.
As far as rape and abuse go, they are overwhelmingly committed by people who are close to the victim, not strangers. I don't see how attractiveness would be very relevant when a father or close friend decide to rape somebody. On one hand, you could argue that attractive people tend to have more friends, and therefore more potential rapists. But on the other hand, you could argue that attractive people are alone less. There are a billion other potential explanations(The imagination goes crazy when considering the effects on support structure), and in the absence of actual studies that test attractiveness of rape victims(try to get a grant for that), I'd say there doesn't seem to be a clear explanation. But I could be wrong, let me know.
Stalking is a different animal. It's usually a mostly emotional process in the mind of a stalker. It's very common for stalkers to be intimidated by beautiful woman, instead going after somewhat uglier but more accessible girls instead. I don't have any statistics for that, but I think the effect is significant enough to throw off a simple linear relationship.
"Pretty sure I recall that from pre-internet publications, though it circulates to the top, from time to time. The only reference could find offhand is Is acne really a disease?: a theory of acne as an evolutionarily significant, high-order psychoneuroimmune interaction timed to cortical development with a crucial role in mate choice. Medical Hypotheses, Volume 62, Issue 3, Pages 462-469, which is only a summary and merely alludes to my conjecture. You can always drop by a medical library to check it out and post a summary, here. :) I'd like to find a solid reference for it, but alas, the internet has failed me on this one."
I think I might do that tomorrow. Thanks for the tip, I had never really considered the evolutionary utility of acne.
If a rule always held up perfectly(or even usually held up perfectly) or generated the same results each time it was applied, it would be a theoretical rule, not an empirical one. It's the difference between Netwon's law of Acceleration and Orkun's rule.