“I believe there needs to be a thorough and complete investigation of speculators to find out whether speculation has been going on and, if so, how much it has affected the price of a barrel of oil. There’s a lot of things out there that need a lot more transparency and, consequently, oversight.”

Those are the words of presidential candidate John McCain.

This man is the Republican?

There’s more.

“I am very angry, frankly, at the oil companies not only because of the obscene profits they’ve made but at their failure to invest in alternate energy to help us eliminate our dependence on foreign oil. They’re making huge profits and that happens, but not to say, ‘We’re in this so we can over time eliminate America’s dependence on foreign oil,’ I think is an abrogation of their responsibilities as citizens.”

Let me get this straight. A potential president of a putatively free country scolds companies for “obscene profits,” failure to invest in competing products, and therefore irresponsible citizenship. Why? Is Mr. McCain running for national economic commissar?

This is not the first time Mr. McCain has displayed what I would call an anti-capitalist mentality. In an early presidential debate he countered former businessman Mitt Romney’s claim to superior executive experience by saying, “I led the largest squadron in the U.S. Navy, not for profit but for patriotism.”

Why the put-down of profit?

It’s clear Mr. McCain does not understand how markets work or why they are good. He certainly doesn’t understand the role of speculators and other middlemen. He’s not alone. Speculators are among the most reviled people in history. When they were members of ethnic minorities, they have been easy targets for economically illiterate people who were jealous of their success. Thomas Sowell has written about the horrific persecution of minorities who excelled as middlemen, like the Chinese in Southeast Asia and Jews in central Europe.

Mr. McCain wonders “whether speculation has been going on.” Excuse me? He needn’t wonder. Speculation always goes on. Speculation means to take a risk on what the future holds in hopes of making a profit. The world’s stock and commodities markets are based on this principle. Mr. McCain must have meant it when he said, “I know a lot less about economics than I do about military and foreign policy issues.”

I doubt that speculators are responsible for much of the run-up of oil prices. Why didn’t they run them up sooner? Besides, there are too many other explanations: increased demand from China and India, the declining dollar, and Middle East tensions.

Even if speculators did play a role, what Mr. McCain apparently doesn’t understand is that speculators perform a valuable service. Most people don’t realize this because on the surface speculators don’t seem productive. They don’t make anything. They buy what already exists and resell it. How does that help society?

In fact, the hated speculator is a good guy because his buying and selling reduce volatility and uncertainty in an unpredictable world. He may only be out for his own profit, but that doesn’t matter. As Adam Smith wrote, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

The prices of commodities often change unexpectedly, making business risky. The speculator brings a degree of certainty to otherwise risky ventures. When supplies of a commodity are plentiful and prices low — but speculators expect the price to rise later — they buy — cushioning the collapse of prices. When supplies become scarcer and prices rise, they sell — easing the shortage and lowering the price.

As Professor Walter Block of Loyola University in New Orleans writes:

“[T]he speculator’s actions in the market signal to all other businessmen that an era of short supply is expected in the future. His present purchases raise widget prices, and hence the profitability of producing them now. This encourages others to do so before the lean years strike. The speculator is the Distant Early Warning System of the economy.”

Also, speculators may agree to buy a commodity in the future for a price locked in today. This reduces the risk for an oil producer or farmer who fears investing because he doesn’t know what price his product will sell for next year.

As a result of these activities, volatile supplies and prices are evened out over time. Occasionally, speculators increase volatility. Markets are never perfect. (Although they are better than government regulation.) But in general, speculators increase liquidity and keep the market on a more even keel. This makes long-term planning easier for everyone.

Since speculators risk their own money, they have a stake in anticipating the market correctly. They direct money to the more productive enterprises. That’s good for everyone.

It would be nice if Mr. McCain would finally learn some economics.

Mr. Stossel is co-anchor of ABC News’ “20/20” and the author of “Myth, Lies, and Downright Stupidity,” which is now out in paperback.