Prosperity In Motion


Our government’s refusal to allow the development of our oil resources has left us on the verge of $5 per gallon gasoline, with fuel shortages looming in the future.  This will have a profound negative effect on our economy, because growth requires movement.  The level of wealth we are accustomed to depends powerfully upon the ability to move goods and individuals over long distances at low cost.

Obviously, dramatic increases in fuel costs would increase the cost of shipping.  This means more than just an annoying surcharge for mail-order packages.  The cost of virtually everything would go up, especially highly perishable items such as milk or juice.

A great many industries have evolved to service travelers, from restaurants and hotels to auto shops.  A significant decrease in American driving, due to higher cost or limited availability of fuel, would push many of these companies to reduce or suspend operations, destroying countless jobs.

Many industries not directly involved in travel have business plans based on easy mobility.  Employees will rethink long drives to work when gas becomes hideously expensive – especially low-income, entry-level jobs.  It’s harder to stick with a part-time retail or restaurant job when the cost of getting there and back suddenly doubles. 

Services such as pizza delivery would be devastated by a surge in gas prices, as they would be forced to pass these costs onto customers.  Retail operations that rely on window shopping would suffer greatly.  An interesting 2005 article by Patricia Schaefer at pointed out that even real-estate sales are impacted by gas prices, because realtors become reluctant to spend big gas money driving potential buyers out to see low-end homes. 

Manufacturing requires huge volumes of raw materials to be shipped to plants and refineries.  A sharp increase in fuel cost would ripple through the cost of most manufactured items. 

There are other impediments to motion besides rising gas prices.  Falling home values have made it difficult for people to sell their home and relocate to different towns or states.  This interferes with our ability to “vote with our feet” and encourage dynamic competition between state governments.

Mobility is a crucial component of growth because it creates opportunity.  The ability to quickly move items across large distances makes many entrepreneurial ventures possible – selling small handcrafted goods from a Web site, for example.  The option to draw employees from sizable distances grants flexibility in staffing, and makes suburban and exurban living possible. 

Even in the Information Age, a great deal of commerce involves physical movement.  Being able to hop in a car and go just about anywhere, whenever we want to, adds terrific value to our standard of living.  If gas soars past $5 per gallon and makes us reluctant to do that, it will have profound impact far beyond causing us to cancel weekly poker games with friends on the other side of town.  Our prosperity happens at a high rate of speed, and it will inevitably diminish if forced into a lower gear.