Saudi Arabia's decision to pump more oil could mean that it thinks oil prices are too high and that increased supply will cause them to fall. It could mean that it thinks prices have peaked and that it can now maximize its profits by increasing production. It could mean that King Abdullah, on sober geopolitical reflection, decided to do U.S. President George W. Bush a personal favour. Or it could mean that the Trilateral Commission (or take your pick: Masonic Order, the Rockefellers, Boy Scouts of America) conspired to make it happen.

The marvellous thing is that the reason doesn't really matter – at least not in allocating the use of an apparently expensive natural resource. A billion people, more or less, will decide this issue, based solely on home economics, all by themselves.


Who “fixes” the price of oil? We, the people, fix it in a thoroughly democratic manner through our private, personal decisions – whether to buy gasoline on any given day, for example, and how much; whether to buy a high-mileage car or a low-mileage car and where to drive it. The Saudi decision to increase supply, as with the thousands of other factors that influence price, is essentially irrelevant in this global reckoning. People alone determine demand. The implications are inherently radical.

Knowledgeable people with global perspectives don't determine prices. Ignorant people with household budgets determine prices. By extension, knowledgeable people can't run a rational economy, no matter how brilliant or how well connected. Without consciously trying, ignorant people can and do.