Sowell solves the latest "oil crisis".

Part 1

What happened is what usually happens when government restrictions are ended: There was more production of oil. In fact the 1980s became known as the era of an "oil glut" and gasoline prices declined.

Today production is being held back, not by price controls, but by political hysteria whenever anyone suggests actually producing more oil ourselves. Organized nature cults go ballistic at the thought that we might drill for oil in some remote part of Alaska that 99 percent of Americans will never see, including 99 percent of the nature cultists.

Part 2

Soaring oil prices have revived the old bogeyman that the world is running out of oil. Economics is a great field for nostalgia buffs because the same old fallacies keep coming back, like golden oldies in music.

Back in 1960, a best-selling book titled "The Waste Makers" by Vance Packard showed that the known reserves of petroleum in the United States were only enough to last another 13 years at the current rate of usage. Yet, 13 years later, the United States had larger known reserves of petroleum than in 1960.

This has been a worldwide phenomenon. At the end of the 20th century, the known reserves of petroleum in the world were more than ten times what they were in the middle of the 20th century -- despite an ever-growing use of oil.

There is of course some finite amount of oil and of other natural resources. The big leap is in going from saying that there is a finite amount to saying that we are running out.

When John Stuart Mill was a young man, he worried that we were running out of music, since there were only 8 notes and therefore there was only a finite amount of music possible. At that point Brahms and Tchaikovsky had not yet been born nor jazz created.

Ha! Take that, John Stuart Mill!