Free market? Watch my hands!
There are those who insist that economics is simple. When they want it to appear simple, or when they want economic facts to appear to be consistent with their prejudices, the often call up the magic mojo of the "free market".
Problems are plenty with that explanation. It never works, except in the ridiculous sense that it appeals to emotion and there are no clearer stories available. The facts, from day to day, from year to year, however, fly in the face of the "free market" myth.
The BBC provides a current and powerful example:
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Wednesday, 20 February 2008, 23:40 GMT
Who knows why oil prices are so high?
By Anthony Reuben, Business reporter, BBC News
On Wednesday, oil prices in New York set a new record trading high of $101.32 a barrel, ending the day at a record close of $100.74. Various reports have attributed this rise to different reasons, but who is correct?
Some say it is because the Opec cartel may be about to cut its production. Others say it is because of fears that Venezuela may stop working with Western oil companies. It may have been sparked off by Monday's explosion at Alon USA's Big Spring refinery in Texas.
But the truth is, it could be something completely different. "Why did it happen on Tuesday? Nobody really knows for a fact what's happening or where it's going," says John Hall from the energy consultancy John Hall Associates.
So what is it that moves oil prices up and down? "It's the fundamentals, stupid," says Mark Lewis from Energy Market Consultants.
The fundamentals are factors that influence the supply of, and demand for, oil. Things such as the increasing demand from China and India, as well as fears that a stand-off between the US and Iran could interrupt supplies, have been raising oil prices.
Alternatively, financial factors may be at work, such as a hedge fund having to sell a particular oil contract so it does not end up receiving a tanker-load of oil - or a trader deciding it would be fun to be the first to trade oil above $100 a barrel.
The problem is, much fundamental information is not freely available. "We really don't know what the fundamentals are doing at any point in time," Mr Lewis says.
