Wednesday, January 18, 2006

19th Century Crisis!

It is not widely known what with government schools focusing on “self esteem” and tree hugging, but during the middle part of the 19th century there was a resource crisis of nearly world wide proportions. The major source of oil for lamps had been whale oil and the whale population had been reduced due to over hunting. The price of whale oil rose steeply as the supply contracted. Candles had been widely used in prior years but they were expensive as well due to the scarcity of animal fat. Does the expression of something being or not being “worth the candle” ring any bells? Poorer people could not afford the price of illuminating oil and mostly confined their activities to daylight or utilized the light from heating fires. In 1850 a brand new technology was developed in Pennsylvania relying on the efforts of a business man by the name of Colonel Drake who drilled the first oil well and was able to sell the crude oil to a local refiner. The refiner was able to produce cheap lamp oil which we now call kerosene. Furthermore, the gas which always accompanies crude oil production opened up other possibilities. It is not widely known but for many years casing head gas which is gasoline condensed from the natural gas at the well head was disposed of as a waste product by being burned off by flaring. Having grown up in the oil fields of California, Leonidas burned many barrels of casing head gasoline in his first few autos. It was FREE!! Please do not rat out your humble writer for “delaying payment” on the required government imposed taxes.

The moral to this tale is that if left free of government interference, human resourcefulness will usually solve the problems of scarcity by developing new solutions and technologies. This is not to say that there are not dislocations and pain. What do you suppose happened to all of the unemployed whalers, buggy whip makers and ice delivery men? Are they still collecting government unemployment benefits?

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