Saturday, May 25, 2019

What Really Caused the Gasoline Shortages During the Age of Disco?

Here’s a Don Boudreaux letter to the Wall Street Journal:

Worried that Americans today are “overly complacent” about volatile world oil markets, Spencer Jakab reminds Americans of the 1970s’ gasoline shortages – shortages that were, according to Mr. Jakab, “caused by events halfway around the world” (“The Gas Lines of the ‘70s Are Gone, Replaced by Complacence,” May 24).

But he’s mistaken. America’s gasoline shortages during the disco decade were caused by events on the Potomac.

Uncle Sam’s ceilings on energy prices discouraged domestic suppliers from bringing to market the full quantities of fuel that buyers sought at those artificially low prices.

It’s no surprise that there has been no nationwide shortage of gasoline since President Reagan, in one of his first acts in office, removed those price controls.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

The above originally appeared at Cafe Hayek.


  1. The government caused the shortages the Carter tried to impose energy fascism to solve the alleged problem. Murray Rothbard, July 1977 on Carter’s Energy Fascism in Libertarian Review:

    But war in this nuclear age is dangerous, and, as Vietnam and Angola have clearly shown, the United States can no longer blithely assume that God has always ordained it to emerge the victor. And so the Carter administration looked frankly for the "moral equivalent of war"-the peacetime substitute for war hysteria and war despotism, for the zeal for sacrifice. President Franklin D. Roosevelt, frankly searching for the peacetime equivalent of a war society and war economy, found it in the Great Depression-and later found it still more starkly in World War II itself. Carter's energy address to the nation on April 18 disclosed his objective frankly and revealingly: "Our decision about energy will test the character of the American people and the ability of the President and the Congress to govern this nation. This difficult effort will be the 'moral equivalent of war'-except that we will be uniting our efforts to build and not to destroy." (New York Times, April 19).

    As the draftsman of his route to power, Jimmy Carter found the ideal candidate as his Energy Czar-the very man who supplied him with the phrase "the moral equivalent of war"-former Secretary of Defense James Schlesinger, a Republican and liberal conservative beloved by the new rightist coalition for his pro-interventionist foreign policy. That this veteran symbol of the military-intellectual complex was all too ready is seen in Schlesinger's interview with a fawning TIME magazine, in one of Carter's numerous public-relations devices to soften up and prepare the American people. Schlesinger, not unhappily, declared that America faces "constraint, curtailment."

    Milton Friedman has well characterized the Carter energy package as a "monstrosity" that would "introduce the hands of the bureaucrats into every stage of pricing, pro­ duction and consumption," and which would move toward "nationalizing the production and distribution of energy."
    (Human Events, April 23).

    Magazine cover:


  2. The other moronic move was the limits on fillups as shown above, and the idiotic "odd - even" license number rule.
    These guaranteed more visits to the pump and yep, longer gas lines. Definitely cemented my libertarian leanings.

    1. I heard that some people swapped plates at that time to subvert the odd/even limits... 😁