With a coalition of the fairness lobby, the bigger government lobby and the environmental moralists all favoring regulation and a growing perception that we must do something, direct control of our energy consumption seems to be in our future even though it would be a profound policy mistake. The market for energy feeds into all other markets. Mistakes in the energy market translate into mistakes everywhere. The price of energy may be even more important than the interest rate in decisionmaking.

Market-determined prices, including those with a tax or cap and trade intervention, have two very attractive features. First, prices deliver a higher level of efficiency in the economy because every household and business can key off of the same set of prices. Second and most important, prices give us the freedom to make our own decisions subject to the proviso that we pay the price.

There will be constant moralizing about energy use. If we choose government regulation over higher prices, we will undoubtedly suffer from a less-efficient economy. But more significantly, we will give up some of our freedom. No one likes higher prices. But I would rather live free with higher energy prices than die from a thousand petty regulations and moral homilies.

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Clayne L. Pope is the Z.C.M. Young professor of economics at Brigham Young University.