The Importance of Commodity Speculation
Matthew Yglesias notes the positive impact of commodities speculation on price stability:
In general, commodities speculation is a good thing. For any given commodity at any given time, there’s always someone who wishes the price were either higher or lower and that person tends to complain about speculators. But if you constantly had to pay the spot price for everything, prices would be more unstable and ordinary households and firms would need to spend more time stockpiling goods to hedge against price fluctuations.
Yglesias has been on a free-market tear lately, exposing the ridiculousness of regulation in a number of market contexts, including zoning, parking regulations, and licensure laws. If you haven’t been reading him, you’re missing out.