ProfG, or somebody, help me. I don't understand Simmons' remarks about the price of oil per unit volume - not the comparison to milk, and not the observation in his otherwise comprehensible book that oil is (was) 18 cents (if I recall correctly) a pint. I don't have any a priori way to know whether oil ought to cost 10 or 100 times as much as milk, or milk 10 or 100 times as much as oil. So the remarks seem incomprehensible unless one takes on board some cosmic notion of what a price "ought" to be. But notions of that sort got hundreds of millions of people into a world of hurt and starvation just in the twentieth century alone.

Now, as a rhetorical device, I might almost understand a comparison to bottled water, since for the normal use of bottled water, there is an ultra-cheap direct substitute - tap water. In that sense perhaps something about the level of frivolous spending is conveyed. On the other hand, there's not an ultra-cheap direct substitute for milk. And direct frivolous spending on oil products (and energy) is very comprehensible without diverting into strange comparisons with milk - travel to lecture halls just to watch TV on a screen at the front of the room when one could just as well watch at home; regular ski trips to the Alps; taking the kids to Disney World; most conferences and conventions; houses so huge that folks can hardly maintain them; Hummers; etc., etc.

But even so, a comparison to bottled water, or even an acknowledgement of frivolous consumption, however vast, still doesn't help me understand what oil or anything else "ought" to cost per unit, other than what it actually trades for. One might even coherently argue that oil "ought" to cost more now because it will cost more very shortly in the future - but that's a different story that can be told quite clearly without reference to bottled water or milk.

Isn't there some kind of economic fallacy going on here?