Actually, oil speculation is a good thing, for several reasons. And I say that recognizing that it hurts my wallet too when I visit the gas pumps.

First, speculation and the prices that emerge from the speculation process send a very important message. When prices go up like they have recently, it’s a signal to investors to put more money into the oil business, and to the oil industry to use that money from investors to do more exploration and development. So what speculators help us avoid really serious shortages in the future. Short-term pain for long-term gain.

Second, speculators help companies that want to protect themselves against future price increases. When airlines, for example, want protection against rising prices, they go into the commodity markets and buy future deliveries of fuel. In other words, they buy next week’s or next month’s fuel at today’s prices. Having done that, they know their costs in advance and can plan accordingly. And speculators are the ones who largely make it possible for companies to buy for future delivery at today’s prices.

Third, and I promise to stop after this point, speculators take on a lot of risk that ends up serving the needs of the rest of us, even those of us who don’t own airlines or even participate in the markets. Without writing a textbook on the subject, let me just say that speculators help make markets more efficient and that’s good for all us.

Although all of these points may seem abstract and totally unrelated to your individual needs, the presence of speculators in oil and elsewhere does make you more prosperous. Banning speculators might reduce the price you pay at the pump this year, but would surely make you poorer next year, and even poorer the year after that.