Economics and Government

"I sent to the Boston Globe this letter in response:

To the Editor:

John Heywood reports that, to reduce Americans’ use of petroleum, he and his MIT colleagues have 'developed an integrated set of fiscal and regulatory policies' (Letters, Aug. 20).

His policies are unnecessary. An integrated worldwide network of appropriate incentives and knowledge loops already is in place and working precisely as it should: it’s called the price system. Higher oil prices promote producer efforts to find economically viable substitutes while encouraging consumers to use less oil. And compared to Dr. Heywood’s top-down scheme, market pricing does not depend upon a few geniuses in authority getting millions of important details just right."

# posted by Larry Eubanks : 11:30 AM