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When I heard that Speaker Nancy Pelosi was going to respond to the highest gasoline prices in American history by giving the government the power to fix prices, I was instantly reminded of King Canute.
Canute was the most powerful king of his era. He ruled England, Denmark, and Norway. According to legend, his advisers had been praising his power and wisdom. He took them to the ocean as the tide was coming in and ordered the waves to stop. The waves, of course, ignored his command, and he got his feet and legs wet. Canute stepped back and pointed out to his advisers that God and the ocean simply ignored the King, and it would be wise to remember the real limits of his power.
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Speaker of the House Nancy Pelosi, D-Calif., leads an event with House Democrats after the Senate failed to pass the Women's Health Protection Act to ensure a federally protected right to abortion access, on the Capitol steps in Washington, Friday, May 13, 2022. (AP Photo/J. Scott Applewhite) (AP Photo/J. Scott Applewhite)
Professor Simon Keynes of the department of Anglo Saxon, Norse, and Celtic at the University of Cambridge, told Kathryn Westcott of the BBC:
"It is often used about politicians who consider themselves so powerful they can stop the tide of something, such as rising wages – as arrogant as King Canute.
"Everyone always gets it wrong… Every now and then someone points out that the reference is wrong, but commentators continue to do it and historians such as myself wince. The story is intended to illustrate his piety – a prominent feature in his kingship. He knows his power is nothing besides that of God."
Big Government Socialists don’t understand Canute’s story. They believe the powers of bureaucrats and laws are virtually limitless. Declare war on poverty, and it must disappear. Declare everyone has graduated high school – even if they can’t read, write, or do arithmetic – and they are ready for the workforce. Declare police are bad and criminals are good, even if the result is rising numbers of murders, rapes, robberies, and carjackings.
Now we are being told by Speaker Pelosi and her Big Government Socialist followers that the historically high gasoline and diesel fuel prices – which were caused by President Joe Biden’s assault on the oil and gas industry – can be undone by government price controls.
Of course, in the real world, the result of price controls will be scarcity, black markets, and political favoritism – as politicians take care of their friends and further distort the market.
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Price controls also signal to capital investors to quit investing in a particular industry. It is exactly the opposite from what we want in a time of scarcity. The answer to high prices is to dramatically increase production, so the flow of new resources brings down the price.
The rule of supply and demand remains a constant of economic analysis – because it is real. When supply expands, prices come down. When supply is constrained, prices go up.
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Politicians can no more repeal the rule of supply and demand than King Canute could stop the tide.
Maybe if Speaker Pelosi knew how wet King Canute got – and understood he was trying to show his advisers that his power was limited by God and nature – she could then share that insight with her caucus. But would they get it?
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