It wasn't easy. I was a coat-and-tie-wearing college professor from wealthy Fairfax County. Surrounding me in the room were crowds of people to testify against me--that is, they testified in favor of legislation that would make it more difficult for retailers to lower the price of gasoline.

Most of these people were dressed in jeans and flannel shirts, real hardworking Virginians. Each of them was an independent owner of a country store, a small convenience store, or a service station. Most of them retailed gasoline brands such as Exxon and Texaco. They argued that they couldn't compete against corporate behemoths Sheetz and Wawa as long as these two Pennsylvania-based firms were permitted to cut prices without restraint.

"If you don't stop them from cutting prices," complained one of these independent retailers, "we'll all go bankrupt, giving Sheetz and Wawa a monopoly in Virginia. Gas prices will skyrocket!"

I testified that gasoline retailing is fiercely competitive. There are dozens of gasoline producers and countless gasoline retailers. This resulting competition constantly prompts each producer and each retailer to look for ways to improve the efficiency of operations so they can cut prices lower than otherwise.

That's the essence of competition: It forces sellers to satisfy consumers at the lowest possible cost. Competition leads sellers to set prices that reflect the true state of the market given the intensity of consumer demand and the size of the supply. If one or both of these things change--say, if supplies of some good increase--then price falls, reflecting this good's greater abundance.

Fortunately, economic sanity carried the day back then. However, such sanity remains too rare, as revealed by Attorney General Bill Mims' recent action against a Radford gas retailer who raised his prices to levels that Mims divined as being too high.