Gasoline prices are high. Prices everywhere are well above $2 a gallon for regular-grade gasoline, and most motorists are paying more than $2.50. It is not unusual to see today’s prices or even the prices of a year ago—in the $1.80s—referred to as “record breaking.” Recently, columnist and Fox News analyst Cal Thomas referred to the good old days of “cheap gas,” when discussing the 1940s and ‘50s. These were times when people were paying about 20 cents a gallon at the pump. Many in my own Baby Boomer generation remember when, as 16-year-olds, we could fill the tank of our father’s car for $5 and still get some change back.
But it makes little sense to compare the price of gas at the pump today with the price at the pump 30, 40, or 50 years ago. Based on this comparison, it is more absurd to proclaim that prices today are “the highest ever.” By this standard, we could say the same for the price of bread or a pair of pants. After all, when I was a kid in the 1960s we paid 25 cents for a loaf of bread and less than $5 for a new pair of Wrangler jeans. But inflation happens—we’ll leave aside why for this discussion—and a dollar today is not the same as a dollar in the 1930s, 40s, or 50s. So, while it won’t make us feel any better when having to shell out $40 for a fillup, a look at some real gasoline-price history might give us an appreciation for both our current burden and a more accurate perspective on the past.
As noted, gas prices at the pump during the 1940s and 1950s hovered around 20 cents a gallon, which sounds cheap from our perspective. But in fact, our perspective doesn’t mean very much. What did 20 cents mean to people who were actually paying it? If we adjust 1940s prices to reflect inflation—that is, if we put 1940s prices in terms of 2005 dollars—we discover that gasoline prices for the entire decade stayed well above $2 a gallon. The average price from 1941-1950 was $2.25. The peak price was $2.52 in 1941. Prices probably would have been higher had there not been wartime price controls, and of course the shortages and rationing that always go along with such controls.
How about the 1950s? After all, we never heard Ward Cleaver complaining to June about the price of gas. Once again, with the exception of 1952 ($1.98), the inflation-adjusted price was more than $2 per gallon for the entire decade, with an average price of $2.07 a gallon and a peak price in 1956 and 1957 of $2.15 a gallon.
Going back to the Depression years of the 1930s, gas prices, in real terms, were generally higher than they are today. The average inflation-adjusted price of gasoline in the 1930s was a whopping $2.62 per gallon. Prices reached peaks of $2.76 per gallon in 1934 and again in 1937. These were the prices that those who were written about in the Grapes of Wrath paid as they made their way from the dust bowl of Oklahoma to California.
If we go back even further to the early days of the automobile we find that the real price of gasoline was higher still. In 1918, for example, the per-gallon price was $3.22 and in 1922 the price was $2.90.
The fact is that Americans did not begin to pay less than $2 a gallon on a regular basis until 1963. Since then, there have been several price spikes, which have sent prices soaring to well above the $2 mark. The post-World War II record was set in 1981 when the inflation-adjusted price was $2.80 a gallon.
This doesn’t mean that today’s gas prices aren’t high. They are. Clearly these higher prices are causing people to reconsider travel plans and to find ways to reprioritize their household budgets. But the prices we are paying today are not unprecedented. There have been times in our history when they have been significantly higher and for much longer periods than we have experienced thus far.
Roy Cordato is vice president for research and resident scholar of the John Locke Foundation.