Craig Haynie wrote:
The energy problem is one example of an issue that is only properly
understood by people having either technical training or the intelligence
and interest to understand the complex relationships. ...
But please understand that there is also political disagreement. To some
of us who consider ourselves capitalists, it's not proper to try to change
market behavior through legislation.
"Proper" is odd choice of words here. I am a capitalist too, but I would
say it is often not "effective" or "practical" to change market behavior
through legislation. The market is usually better and faster.
But in some cases legislation works well, and everyone agrees the change is
beneficial and cost-effective. What could be "improper" about that? We
should be pragmatists first and foremost. Never let ideology or economic
theory stand in the way of common sense. To take a particularly clear-cut
example, in the 19th century, accidents with railroad couplings were so
common in the US that most rail yard workers were missing a finger or a
hand. In 1893, the Congress passed The Appliance Safety Act mandating the
use of standardized automatic couplers on railroad cars. This dramatically
reduced the accident rate:
"Its success in promoting switchyard safety was stunning. Between 1877 and
1887, approximately 38% of all railworker accidents involved coupling. . .
. [B]y 1902, only two years after the SAA's effective date, coupling
accidents constituted only 4% of all employee accidents. In absolute
numbers, coupler related accidents dropped from nearly 11,000 in 1892 to
just over 2,000 in 1902, even though the number of railroad employees
steadily increased during that decade."
http://straylight.law.cornell.edu/supct/html/95-6.ZO.html
Railroad coupling accidents were an engineering problem, amenable to a
simple, direct, technical solution. When the legislation was proposed, it
ignited an acrimonious debate about the property rights of the railroad
owners. The fingers, hands and lives of 11,000 workers per years were
infinitely more important than such considerations!
Also, I've spent a great deal of time studying market economics, and it
appears to me that free markets are excellent at handling scarcity.
Yes they are. That is why as a practical matter the best way to solve the
energy crisis quickly would be to "artificially" increase the cost of
gasoline, by imposing a $2 tax. Alternatively, we could remove all the
overt and hidden subsidies for oil, and charge everyone what it really
costs, including the costs of war and pollution. That would raise the cost
by $3, instead of $2. That would be fine with me. (Of course it is
impossible -- and obscene -- to put dollar value on the thousands of dead
and maimed American soldiers, but we could, at least, try to approximate
the costs at, say, $1 million per victim.)
As a resource becomes more scarce, prices rise due to the economic law of
supply and demand. As prices rise, alternatives to the scarce resource
become more economically feasible. The market is self-correcting, and as
such, it doesn't look to me like any energy policy based on resource
scarcity can, or should be, modified through legislation.
Yup, that is a fairly dependable rule of thumb. The market is not a law of
nature, but yes, most of the time, it works roughly as well as COBOL,
Pascal, the air traffic control system, or some other nifty, time-tested
human innovation. All human institutions have limitations; none work
perfectly. They exist to fill our needs. We should not be slaves or
helpless robot automatons in response to the "market." We should make use
it where it works, and circumvent it where it does not. It is not sacred,
and there is nothing "improper" about overriding it, any more than there is
anything improper about resetting a computer to interrupt a Pascal program
that has gone haywire.
The market does not apply to one vital area of society. Basic research into
physics, chemistry, information theory and other academic disciplines never
pays for itself directly. You cannot patent a force of nature, and basic
research never yields results that can be kept secret without revealing the
principles to the competition. Research must be conducted by professors who
are either paid for by the public or by philanthropy. Results must be
published freely for everyone to read. If we are ever going to see cold
fusion, or space elevators, or a cure for cancer, we must give these people
whatever money and resources they require, for whatever obscure purposes
they feel like pursuing.
The only exception to this rule that I can think of, would be an
exception based on national security.
Nothing is more vital to national security than energy.
- Jed
