Publications: Notes at the Margin

Long-Term Consequences of Short-Term Actions (October 12, 2020)


The Covid-19 pandemic has required governments and businesses to take extraordinary measures that no one would have contemplated eleven months ago. History shows that some of these actions can have substantial long-term impacts.


Here we show that the price controls instituted by Richard Nixon in 1971 have had many such impacts on the energy industry. Among them are the destruction of the integrated oil company model so popular following World War II and the creation of an organized, successful oil futures market.


Some of these changes might have occurred without the Nixon program. However, history would likely have been much different. For instance, the major oil companies could be playing a much larger role in the economy today.


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