ALTHOUGH WE'D LIKE

to believe that war is unnecessary, that all men are rational and never seek to do each other harm, the history of mankind has proven far different. In every age, evil has risen up and attempted to wreak havoc against innocent life. Modern times are certainly no exception. The only question is, can you pick the enemies out from your friends?

Here are a few hints: The radical Islamic movement that murdered thousands on 9/11 calls for the destruction of Israel and the U.S. and preaches hate throughout the Middle East is our enemy. Same goes for Kim Jong Il, the dictatorial leader of a totalitarian regime that openly threatens America and our allies. One need not be a Rhodes Scholar to see the clear and present danger there.

Strangely, however, so many Americans spend an inordinate amount of energy fighting against supposed enemies that are actually our friends. Probably the most obvious and frequently-targeted victim is Wal-Mart Stores. One need not look far to find the relentless animosity directed toward Wal-Mart hundreds of web sites and dozens of commentators trash the company as exploitive, evil, or, in the case of one union web site, "the lead horseman in an apocalyptic world-wide race to the bottom."

Yet if Wal-Mart really was a malicious criminal, exploiting workers and pillaging towns for the benefit of greedy shareholders, how has it grown from a single shop in a small Arkansas town into a world-wide colossus with 4,000 stores, 1.3 million employees, $245 billion in annual sales and 100 million customers each week?

The fact is that the company's success isn't built on exploiting, but on providing. Wal-Mart can't force anybody to work at its stores, nor can it force anybody to shop there. And although Wal-Mart isn't as quaint as the corner shop, millions of people prefer Wal-Mart because they get significantly more value for their hard-earned dollar. Estimates suggest Wal-Mart can save the average family more than $2,000 a year compared with shopping at higher priced alternatives. That's far from chump change.

Does Wal-Mart put local mom-and-pop stores out of business? Perhaps, but only in the same way that innovation did away with the Pullman Porters or elevator operators that were commonplace in the last century. In a market economy, we vote with our pocketbooks, and most folks, especially low-income patrons, would prefer to get a lower price than support a small, folksy shop.

What's truly evil, and unconscionably immoral, is to claim that small business has a "right" to be protected from bigger competition. That's precisely what you see in numerous communities that either prohibit Wal-Mart from opening stores or pass onerous legislation that makes it impossible for them to do business there. On a federal level, the company has seen its attempts to secure an Industrial Bank charter thwarted by special interests, even though that license has already been granted to scores of other commercial entities. If that's not outright discrimination, I don't know what is.

If you don't like Wal-Mart, don't shop there. But to suggest that a company that engages in free, voluntary trade while creating jobs for 125,000 Americans in 2005 alone is evil is an unquestionable debasement of the term. Wal-Mart is far from our enemy. Rather, it is our greatest ally and friend.

Close behind Wal-Mart as supposed enemies of America are the oil companies like Exxon Mobil or BP, which, over the last year, have received a relentless torrent of criticism over their policies, environmental practices and supposed "gouging" of defenseless consumers.

To start, one must understand that prices for anything, from barrels of oil to concert tickets for the Rolling Stones, are not arbitrary. Prices are determined by supply and demand. When demand is high and supply is scarce, prices go up, at least until demand slows or more supply can be generated to meet demand.

Since early 2004, the price of crude oil has roughly doubled, running up from $30 a barrel to $60 a barrel. Gas prices at the pump, of which crude is the main component, have also risen sharply. If you think oil companies can simply price fuel wherever they like, how can one explain the 13-year stretch between 1986 and 1999 when crude was in a range that went nowhere at all?

The truth is that numerous factors contributed to the rise in price, including growing demand, both from the U.S. and emerging economies like China, disruptions of supply due to weather and geopolitical instability and a long list of environmental restrictions that makes producing energy even more time consuming and expensive. Yet it's the oil companies who bear the brunt of the anger of rising fuel prices, even by elected officials and educated consumers who should know better.

Oil companies earn their profits. Gas doesn't simply grow at the service station. It takes hundreds of man-hours, thousands of people, and literally billions of dollars in investment to make fuel safe and easily accessible at your local Marathon station. While consumers and politicians are whining like spoiled brats at a birthday party about how expensive it is to fill up their SUVs, oil companies are, to the extent the environmentalists will allow, exploring for new resources and even more advanced methods to get us the energy we value.

Ironically, the numerous calls for "windfall" profits taxes to be levied on oil companies would end up destroying the economic motivation that will eventually bring prices down. It is the rising price and profit, after all, that prompt oil companies, innovators, wildcatters and other market participants to step up their investment in searching for more resources and better technology. What drives them isn't altruism or charity, but the selfish pursuit of profit. If politicians eliminate the profit motive to produce a value, who in their right mind will take the enormous risk to produce the value in the first place?

We use energy for almost every element of our lives. And because of the industry's success, we've come to take it for granted that a cheap and readily available fuel is simply a given, like the sun rising or tide coming in. We know producing oil is far from effortless or risk-free. Yet gas remains available, safe, and, although you don't hear it much on the evening news, extraordinarily cheap relative to inflation and the incredible value it provides.

To paint Big Oil as an evil enemy displays an almost unreal combination of ignorance and entitlement. Militant Islam is the enemy big oil is our friend. Far from being demonized, these companies should be celebrated as some of the most productive, innovative and profitable achievements of modern times.

Jonathan Hoenig is managing member at

Hedge Fund LLC.