Pouring Gasoline on the Fire of High Fuel Prices


As I type, the average price for a gallon of gasoline here in western Pennsylvania is about $2.03, lower than the national average but a record for our area nonetheless.

Fortunately, consumers here are getting a little relief from the high gas prices courtesy of the Giant Eagle supermarket chain, which also owns a chain of gas stations known as GetGo. Giant Eagle offers its customers a discount of 10 cents per gallon of gas for every $50 they spend on products in its supermarkets. Furthermore, these coupons can be combined, so that someone who has spent $500 in Giant Eagle stores can buy gas at GetGo for $1 less than the price at the pump.

Unfortunately, however, GetGo's competitors are not too happy with this turn of events, seeing as how it inevitably takes business away from them. Being good Americans, they know that the best way to deal with such a situation is not to attempt to compete in the marketplace but to enlist the government to destroy their competitor's advantage. Thus we find that they have taken their case to the Pennsylvania state attorney general in order to convince him to prosecute Giant Eagle under the Unfair Sales Act of 1941, which prohibits retailers from selling merchandise 'at cost or less than cost in order to attract patronage.'

Now this puts the attorney general, Tom Corbett, in a sticky situation. He's a politician who depends on both campaign contributions from special interests and votes from the general public to remain in office. He will have to weigh the importance of losing contributions from the Petroleum Retailers and Auto Repair Association of Pittsburgh, who are bringing the case to him and have a very strong incentive to back his opponent in the next election should he fail to prosecute, against the importance of losing votes to consumers, who will not much care for his costing them more money at the pump should he successfully prosecute the case. Since he was just elected and has three more years until the next election, by which time oil prices may have fallen and consumers will, in any event, likely have forgotten his raid on their pocketbooks, I suggest that he will choose to prosecute. The special interests have longer and stronger memories than do the voters at large.

Note that I did not even consider the possibility that Corbett would actually consider the merits of the case and the law under which the Petroleum Retailers want him to prosecute GetGo. Politicians seldom, if ever, consider such things. As far as they are concerned, they make laws; they don't just codify the 'laws of nature and of nature's God.' Therefore, their laws are not to be questioned. They are there to be used in whatever way benefits the politicians and keeps the campaign contributions and votes rolling in.

I, on the other hand, am not a politician, so I will indeed consider the merits of the case and the law under which the Petroleum Retailers want the state to prosecute GetGo.

The Unfair Sales Act'which is similar to laws in over 30 other states, one of which (Oklahoma's) was used to prosecute Sam's Club for a similar 'offense' of selling gasoline below cost, to the everlasting benefit of Oklahoma drivers, all of whom now have to pay higher prices for gas'is a blatant violation of the right to private property. Simply put, if the party of the first part owns a piece of property, be it gasoline, house paint, butter, or a girdle, he has every right to offer it for sale at whatever price he so chooses; and the party of the second part, the consumer, has every right to choose whether to pay the price, negotiate it down to an acceptable price, or reject it out of hand. It's called freedom, boys and girls.

When the government comes along and tells a property owner that he may not sell his property at a price agreeable to both him and his customers, then that government is violating the property owner's right to his property (in effect, stealing it from him) and both the seller's and buyer's rights to liberty (in effect, enslaving them to someone else's idea of what the price for the merchandise ought to be). There are no ifs, ands, or buts about it. All laws that interfere with free trade, whether within a jurisdiction or between jurisdictions, are ipso facto violations of the buyer's and seller's rights to liberty and property, and as such are crimes in themselves and ought to be repealed or, failing that, ignored.

'I can honestly say I am astonished at the reaction of the other gasoline suppliers' to the GetGo discount program, wrote one Pittsburgh Tribune-Review reader to that newspaper's editor. Why should he be astonished in the least? Isn't this the American way?

Let's face it: Most of the people currently complaining about the Petroleum Retailers' attempts to force them to pay higher prices for gas will be writing angry letters to the editor demanding government action if the price of gas rises to, say, $3 a gallon. Similarly, many of them complain incessantly about Wal-Mart's 'unfair' advantages over local retailers, who often go out of business when Wal-Mart sets up shop in a community. Most of them probably believe the myth that Teddy Roosevelt's trust-busting saved Americans from the evil Standard Oil monopoly'you know, the one that kept steadily bringing the cost of refined oil products down as it grew bigger and bigger. It all depends on whose octane is being gored.

No one should be astonished that some people use government to obtain by force what they cannot obtain by peaceful exchange. This is, after all, the central function of government. By its very nature it takes the lives, liberty, and property of its citizens and puts them to its own uses, either to enrich the government and its functionaries directly or to reward those who contribute cash and/or votes to keep the same people in charge year after year. No matter how 'limited' a government is, it invariably rests on force or the threat of force and subsists by, at the very least, taking the property of some or all of its citizens in the form of taxes and giving it to other people. The only astonishing thing is that it lets us have any freedom at all.

A principled attorney general would say, 'The Unfair Sales Act violates people's rights to liberty and property and thus violates the laws of nature and of God. I cannot in good conscience enforce such a law. Therefore, I am doing two things. First, I am declining to prosecute Giant Eagle under this act. Second, I am recommending to the state legislature that the act be repealed.' Time will tell whether or not Pennsylvania has such a man in Tom Corbett.

Meanwhile, it is the task of all lovers of liberty to work to abolish such horrendous laws and to prevent further such laws from being enacted and existing ones from being enforced. If we can do that, we'll have a good start on getting rid of the institution that enacted them in the first place.

Gentlemen, start your engines'with discounted gasoline, of course.

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Michael Tennant's picture
Columns on STR: 30

Michael Tennant is a software developer in Pittsburgh, Pennsylvania.