A little capitalism appreciation

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Drove by a gas station with advertising $2.57 / gallon last night and had my mind blown.

Consider what’s involved in getting that product to that location at that price:

  • Finding a large deposit of oil (which required drilling a bunch of dry holes first, I’m sure)
  • Installing drilling equipment
  • Pumping ~2 gallons of oil
  • Transporting it to a refinery
  • Refining the 2 gallons of oil into a gallon of gasoline
  • Transporting that gasoline to the gas station

All of the steps above require someone to be paid an acceptable amount (whether in wages or in return on invested capital).

It’s a marvel of modern capitalism that all of those steps, with profit at every point, can be accomplished with an end-user price of $2.57.

There’s nothing that I will ever do in my life that works as perfectly as the system above… and I bet the same goes for you!

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