Twenty years from now? The litre is now at approx. 1.40 Euros, if you're talking about gallons (since you appear to be American), $3 would be cheap NOW.

It’s sad in the sort term for those people who loose their jobs obviously but mechanisation in itself creates new jobs and video store clerk is a rather dead end job often done part time by students going on to better careers so I don’t think it’s really very sad in the long term.

Mechanisation changes the job market but it doesn’t really reduce it, for starters all those machines need to be built, programmed, maintained, upgraded, marketed, sold, powered, etc. New jobs are created as well as destroyed. People merely need to reskill and as I say people in those sort of roles are often doing it part time on the way to something better.

After all do you morn the loss of jobs in the chimney sweeping industry because more people have gas an electric heating now? The job market changes and people have to learn to go with the flow.

But of course the robots have to be built, programmed, maintained, have their designs improved to make them more efficient every few years, be ugraded, shipped, esembled.

You see they point is they create new jobs too. My job in IT exists only because of mechanisation in the office, the use of computer systems in the office has cost many jobs as some of the simpler tasks get handled automaticly, but it has also increased the speed with which businesses act and react, as well as creating a whole host of jobs and a whole new industry, upgrading maintaining, designing and installing hardware and software.

By the way those DVD despensing machines are a stipid Idea, online film clubs are far better they carry more titles and you can hire the films on better terms normally.

Hence the rest of that post, telling people to live in Europe for a while before complaining about gas prices. The sad truth is that the American economy is built on absurdly cheap energy prices, which are intentionally kept low by the various levels of government.

Let's take Illinois for an example, since I recently had to live through this nonsense. Electric rates had been frozen for ten years while the electric utilities were "deregulated", then people seemed to be surprized when a decade worth of inflation and cost increases hit all at once! Literally overnight electric bills doubled, and people started having problems paying them. Buisinesses went under due to overwelming costs. Guess who got blamed for this mess? It wasn't the corrupt lawmakers who made the mess, it was the power companies - some of which had been running at a loss due to the price cap. Seems people can't live without the government subsidizing cheap energy - and that's exactly what current prices are, indirect government handouts.

Now, the federal government is trying to pass increased fuel efficiency standards for the first time since the 1970s. Had fuel prices not been kept so low, these new standards would most likely have been inforced by market prices, not government regulation. I'd bet you (pndrev) drive something much more efficient than most Americans, and put a lot less miles on it a year, to boot. Why? Because if you drove like an American, you'd spend more on gas in a year than you paid for your car.

Let's just say that I consider my current (winter tires) fuel consumption of 8.0 - 8.5 litres per 100 km the upper limit of 'efficient'. That's approximately 28 to 30 mpg, and not exactly a small car either. (My Dad drives an SUV and manages barely 7 litres/100km, I honestly don't know HOW...)


Frankly, it surprises me that a country so devoted to a free market like the US has so strongly regulated energy prices. I knew the prices were cheap, but had no idea that they were law-enforced. When looking at the situation in Europe, I'd say we can expect the (usual) slowly rising energy prices in Europe to continue and the US probably will start a race to catch up with us. Hey, maybe it means we can export our fuel-efficient cars.


PS: Oh, and just to rub it in... My car still does ~150 mph on the Autobahn and it's all legal.

Oh Ned Ludd, where hath thy spirit gone?

I am entirely one for industrialization and progress (I like my robots as much as the next chap), but I really have to play devil's advocate here, cus' you all seem to be way on the 'progress' side of the fence. For the record, I have a computer science degree and I work in IT services, so I am right in the thick of one of those 'new jobs' created by the need to upkeep machines.

First, lets look at a simple example. Say you have a job done by manual labor, and there are 50 workers to perform that job. A team of five researchers get together and invent a machine to do that same job with a single operator that switches off in shifts. A few robotics engineers get hired to maintain the machinery. So lets say in total we generate 12 new jobs from this machine. The numbers are very obviously off, but the ratio they represent is what is important. The replacement of jobs revolving around a machine and jobs that machine replaces is not a 1:1 ratio - otherwise, there would be little point in bringing in the machine. The purpose of using a machine is to increase efficiency, speed, and decrease the number of paychecks involved. So take it to a larger scale. 50 jobs that each require 50 employees get replaced by fifty machines. The same five guys design each of these machines (because that is there job, and they don't design only a single machine in their entire career), we hire a couple extra engineers to handle the extra load of machines, plus 3 or 4 shift operators per machine (because these machines still require some human control, we'll say. They aren't completely automated). So thats 5 designers, we'll say 5 engineers, and 200 shift workers = 210 new jobs. How many were lost? 2500 .... So where are we going to stuff all these displaced people? We don't need 500 new robotic engineers, or 2000 operators ..... Obviously it's not as simple as all that - there are many more factors to consider - but I think it makes sense. And really, thats exactly what happened at the beginning of the industrial revolution - which is why there were radical groups of people going around destroying machines for a while.

Certainly bluethirtytwo, your point being that industrialization does reduce the total number of "jobs" within a closed system... this is really the definition of improving efficiency; less man-hours to produce a given product. But I think the key here is the point that this is never a bad thing for the system as a whole. Individuals lose their jobs and need to find new employment, but everyone benefits from the cheaper products. ($1 new release video rentals in the original example... multiplied over all the customers out there that used to need to pay $4.99 or whatever...)

I read an amusing anecdote a few years ago about a British economist touring China during the cultural revolution in the 1960's. While visiting a constuction site for a new dam, he noted the workers were all using hand tools and shovels; no heavy earth-moving machinery was present. When he asked his local handlers about it, they explained that this provided more jobs. He retorted that he thought they were making a dam at this site; if it was jobs they wanted made, just have the workers use teaspoons...

Greed is irrelevant, because companies are bound by law to do whatever is in the best interests of their shareholders. How many times have you seen executives on TV excusing their actions with the line “we are just doing what is in the best interests of our shareholders”. I mean if sending out death squads to harvest children off the streets of America to be used as pet food benefited the shareholders, then that is what would be done! There is no more powerful force in the Universe, no more uncompromising and self perpetuating force than “we are just doing what is best for our shareholders”.

In the end, when humans finally become extinct, Aliens will come and erect a monument here that say’s “we were just doing what was best for our shareholders”!

Second - re-skilling ... I have a beef with this term. People tend to bandy it about a bit to much "lost your job? Just re-skill and find another one!". Gaining a new skill set for a job often involves an exorbitant amount of time, effort, and money. Even more so in a heavily technologically based society. There may be a new job created in order help service a newly mechanized industry, but that doesn't mean that the factory worker that was displaced by that mechanization can enter that job. The worker will probably need a large amount of re-training in an environment where there is little or no social support for it. The worker may now have the time and may have the drive to succeed, but they probably don't have the thousands of dollars it takes to earn a degree in order to take that job.

Furthermore, re-skilling does not guarantee you a job. The technical market is over saturated as it is. I work on a university campus, and you wouldn't believe the number of people I have met coming back for a second technical degree because they couldn't find a job for their first one.

I'm not at all against industrialization and machines, Bleeg. I would love for us to live in a world where everything is made easier by machines, and all of our food was bio engineered to taste batter and be better for us. Hell, if you handed me a chicken that was bio-engineered to taste like chocolate, but didn't give me cholesterol, I'd take out my spork and my electric carving knife and dig in. I just think that we need to be aware and accepting that progress often comes at a human cost (unless, of coarse, you have the social infrastructure to handle and encourage a whole lot of re-training ... and we really don't)

Yes, of course.
I'm not sure about this particular instance, and I certainly favor strong labor laws, support workers' rights, and a strong social safety net; however, I think it is wrong to oppose this kind of progress in principle. If there is a cheaper, more effective way of doing something, then it should (in general) be pursued. People have jobs (and get paid) because they are producing value for society; in some cases, technology progresses such that they are no longer producing value relative to an automated process. It is a GOOD thing, from the point of view of society as a whole that those workers can be freed up for other productive activity without sacrificing the good they were already doing.

The trick, of course, is ensuring that the aggregate benefits to society are distributed such as to offset the very localized costs to the individuals that are directly affected.

Yes, that would be a cheap price in most Euopean countries. Not because gas is cheaper here, but because our government isn't taxing us as much for it. On average, 60 percent of the price European drivers pay at the pump goes to their governments in taxes.

In Britain, the government takes 75 percent, and raises taxes by 5 percent above inflation every year. (This year it didn't because of higher prices) On August 8, for example, the price of gas in the US, without taxes, would be $2.17, instead of $2.56; in Britain, it would be $1.97, instead of $6.06. So actually, it is cheap now, your government is just taxing you to death and therefore, your moral is suffering. I wonder if birthrates are down...

Funny thing with the price of Gas here in Australia - The government instituded a grant program to encourage people to have their vehicles converted to run on LPG rite, and also the Government taxes petrol very harshly but not LPG... So now the price of LPG which has little or no tax has managed to rise above 50% of the price of petrol!

In Australian Dollars - Petrol is $1.35 per litre, LPG is $.70 per litre!! Add to this that LPG has less milage per litre than petrol and causes increased wear on engines then the whole thing just makes a big joke out of the LPG conversion idea hehehehe

I think the Government should offer a grant to have LPG conversions removed!!! lol

That's just the way it is. There is nothing you can do, it's inevitable. Join us or be crushed.

Sincerely,

The Yor

The market only sets prices in a perfect competition and monopolistic competition.
Oligopoly's and monopoly's both have a fair say over prices. Add that to the price fixing and setting going on in the Oligopolistic Oil industry and it is anything but fair (although ironically it's called a "fair return" in economic terms).

Add the Natural price increase from the growing demand from the third world and fixed production quotas well below natural production would have it you get a nightmare.

Petrol prices cannot rise too much higher than they are now otherwise electric vehicles and other alternatives will be able to begin taking significant market share more and more rapidly which the oil companies would never want! Further more, as alternative fuel systems improve over time, this will add increasing downward pressure on fuel prices – we will probably even see fuel prices falling once OPEC looses too much market share and decides to fight back.

Does't it strike anybody else as odd that a gallon of gasoline (or liter or petrol) costs about the same as a locally produced gallon/liter of milk? That is, before the government tax is added to the price. So basically, if our cars could run on milk, then the price of milk would skyrocket and we'd be paying more, not less for our fuel.

It will take 10-20 years for those alternatives to become wildly available, and all hybrids will do is decrease market sensitivity to price increases.

Oil is a product with little economic sensitivity, and this means they have no reason to lower prices in the short term (read 10-20 years), and that they might as well milk us for all they can until the environment forces them to either an equilibrium or viable competition with your alternatives force them down to 0 or little economic profits.


Note: For those who do not understand this, economic profits are not accounting profits as it includes all opportunity costs.

But your forgetting one thing - 'economic opportunity'. A good example of economic opportunity here in Australia has been demonstrated several times by a new airline (compas airlines) starting up and then closing down again.

Prior to the new airline starting up, airline tickets are pushed too high by the greedy incumbent airlines thus creating an 'economic opportunity' for the new airline to jump in. Of course airline tickets plummet after the new airline starts operations and it is quickly bankrupted!!

The same principle applies to petrol prices - the higher they get, the greater the economic opportunity becomes to attract alternative fuel developments. But unlike the new airline colapsing, reducing petrol prices will not reverse what has already been developed, it may get it put on ice at best.