Demand reduction is fine in theory, but bankruptcy and possible food riots aren't a good way to manage it.
Why would you want to manage it? I thought the prevailing wisdom here was that laissez-faire was the way to go?
Don't like it? Buy a horse. Or a bike. Or magic trains out of your butt overnight. It's all your own fault anyway.
Welcome to the new European Libertarian Tribune.
Compensatory measures always distort prices, don't they?
Like Marek said above about education and health care.
I mean, come on, we're talking about roads here, without which you can't bike from A to B. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
This why I don't like 'markets should...' arguments. There's no clean definition of social necessity.
What markets really do is act as amplifiers of political positions. They're not designed to set prices rationally, they're designed to make some people rich and powerful and other people poor and irrelevant.
Is there anything at all which markets do which can't be done better in other ways?
As Sassafras said, reality isn't quite that tidy.
And if there's no other capacity on alternative modes of transport, trucking isn't key infrastructure?
What should also be done is looking at how the transport infrastructure should be shaped for the future. I think it is plausible that we will see a scenario with much more rail transport, with the final leg being performed by relatively small electric trucks with a limited autonomous range (but also by for instance coopting tramways in cities).
Building big new highways (as Zapatero is doing) will mainly favour mule power...
The demand destruction of higher fuel prices is of the sort we want - changing transport, production, and consumption patterns in the direction of less use of a scarce resource and lower CO2 output. Spain and other wealthy countries are fortunate enough that the immediate pain of demand destruction is in the form of eating something else and spending a bit more for food and other items, rather than starvation. So as you say, help out the small number of people badly hit by the change, and otherwise step back and let things happen. This is really no different than, say, regulations banning logging in old-growth forests where a small group of people end up losing their livelihood and way of life, while the rest of society adapts.
