Gasoline Prices, Big Business, and the Working Class

By John Peterson

The recent rise in gasoline prices around the country is yet another example of why democratic control over the commanding heights of the economy is the only way forward for working people.  This short article will explain why.  Retail gasoline prices in the US have jumped by more than 25 percent since January 2002 – the fastest rise in the past 50 years – even faster than during the "oil crisis" of the early 1970s.  An increase in gasoline prices affects all aspects of the economy - from transportation and shipping to the final cost of goods which must be shipped.   But above all, it hits working people - especially the working poor who already live from paycheck to paycheck. 

Just a few extra cents per gallon may not seem like much, but over time, it adds up – just ask the oil companies!  For each penny the price of gasoline at the pump rises, the oil monopolies "earn" an extra $1 billion per year.  Yet according to the top executives of the oil multinationals, gasoline prices are "out of their control".  What they forget to mention of course is that the profits from these higher prices are firmly under their control!

These executives blame volatile crude oil costs, unexpected refinery fires / shutdowns or pipeline disruption for the rise – anything but the profit motive and their own inability to properly plan the energy needs of the country and world. But as the Enron collapse graphically revealed, even at the top of some of the largest and most powerful companies in the world, the capitalists don't know how to run things under capitalism!  The companies also blame the government for its environmental requirements on gasoline production.  Their solution is to scrap the already inadequate environmental and health and safety guidelines in the name of cheaper gas – while maintaining their profit margin.

Even the US government has called the dramatic price rise into question, and the Senate's Permanent Subcommittee on Investigations called on representatives from BP, Exxon Mobil, ChevronTexaco and Royal Dutch/Shell Group to testify.  But this is more of a public charade than a real investigation into the inner-workings of monopoly capitalism.  The Bush administration is made up of ex-oil men and women and closely connected to the energy giants like Enron.  Any effort by the capitalist government to "check" its closest allies is only to throw sand in the eyes of the electorate and to curb the most blatant practices so as not to anger the masses too much. Heaven forbid the working class should demand a look into the inner workings of the economy which they alone keep running! 

The government contends that it is the unprecedented accumulation of oil wealth in the hands of fewer and fewer companies over the past few years which is to blame.  The companies on the other hand maintain that the wave of mergers – or "consolidation" as they call it - improves efficiency and competition, and has no effect on gas prices.  So who's right?   In a way they both are!  The government's position is a no-brainer – it is obvious that fewer competitors means less competition.  But the monopolies are right in asserting that even under monopoly capitalism, there is intense competition.  Each company is looking to carve out a bigger share of the market for itself (although behind closed doors there are deals made to ensure no company gets too much of an advantage – they regularly divvy up the market between themselves!).  But each company maintains a massive internal bureaucracy, spends millions on advertising and marketing, and produces not for the needs of the people, but to make the most profit.  This translates into cutting corners on quality, wages, safety precautions, etc.  It also means colossal waste – they don't really know how much the market will bear because the masses have no democratic input into what is produced, how much is produced, and above all, what happens to the excess wealth created by the workers. 

So here's an idea – if the oil monopolies think that bigger is better, we'll have to agree!  One massive oil company would eliminate all the needless competition and waste, and production could be determined on the basis of the needs of society.  But who would run such a behemoth?  Well, the day to day running of the oil companies is already done by the working class.  They are the ones who search and drill for the oil, ship or drive it to the refineries, refine it, get it to the gas stations, and sometimes even pump it into your car! Why not them?  Only the democratic control of the workers themselves over such a vital sector of the economy can ensure clean, environmentally safe gasoline, quality wages and benefits for the workers, and production based on the real needs of society.  

According to the government report, "the oil companies view it to be in their economic interest to keep gas inventories low and the supply and demand balance tight".  Under workers' democratic control there never again need there be a shortage!  Not to mention the massive auto industry which should also be nationalized in order to produce more gasoline efficient cars and research alternative modes of transportation and energy.

But the solution cannot be found entirely within the United States, no matter how rich and powerful it is.  Oil is a global resource, and its best utilization can only come about through a democratic world socialist federation in the interests of all of humanity.   Sound far-fetched or hard to imagine?  Not really!  What is truly hard to imagine is the idea that the toiling masses of the planet will allow themselves to be abused and exploited by a handful of rich bosses for much longer!  

But we have to start somewhere, so why not the United States?  Sadly, none of this can occur until the workers themselves also control the government.  Appealing to the goodwill of the rich and powerful is about as useful as an old 8-track tape.  As the Enron case shows, we cannot trust a capitalist-funded government to defend the interests of working people.  It is tied hand and foot to the interests of big business.  Only a workers' government can take control over the commanding heights of the economy and work to end unemployment, provide quality jobs, healthcare, and education for all, and more.   Is that so much to ask in the richest country on earth?  The working class is, after all, the most numerous group in society – and isn't the United States supposed to be a democracy where the majority rules? 

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