Student Government

UPDATE: Welcome fromthearchives and MR readers. Please note that nothing untoward was meant by the poor choice of words in the first sentence below. Second, please note that I have no reason to believe that Megan would not mind abuses of power that were aligned with her beliefs; I was throwing her in with lots of other partisans who do have that problem, it was unfair, and I have apologized.
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I do not understand Tyler's attentions to Megan-non-McArdle. I had originally drafted a well-rounded criticism of both Megan and her anonymous, "libertarian" interlocutor, but in doing so I realized that what was really needed was a harsh rebuke of her impassioned but misguided defense of bureaucracy. Megan's position is that bureaucrats "BALANCE COMPETING NEEDS" [her overemphasis]. This is untrue, and belief in it is the stem of much wrongdoing.

1) Government employees created the problem in the first place.

According to this article, "Starting in the 1920s, the U.S. Bureau of Reclamation drained most of Tule and Lower Klamath lakes for agriculture and built an irrigation canal to send Upper Klamath Lake water to farms in the neighboring Tule Lake basin."

The government not only promised land to settlers, they promised water to them and water and fishing "rights" to the Native Americans before them. This article summarizes,

Yet according to some, the government had earlier also promised farmers irrigation water "forever" when it made Klamath Basin land grants between 1908 and the 1940s.

Further, in an 1864 treaty with the Klamath Native American tribes, the government guaranteed water and suckerfish fishing rights downriver in exchange for their land upriver. When making land grants, the government did not tell the farmers of the tribe's rights.

Politicians and bureaucrats, having "no dog in this fight" as Megan says, simply blow with the wind, giving "rights" away to anyone who petitions strongly enough. One doubts whether private property rights would have been so poorly protected, but then she basically says that she does not think people ought to be trusted with a role in resolving disputes because they will defend their own interests.

Then, those farmers got subsidized electricity. We know because of the furor set off when it was proposed that the subsidies be taken away:

Rates will go from 0.6 cents to more than 6 cents per kilowatt-hour - a tenfold increase. [and that's still less than I pay!]

The Tulelake Irrigation District in Northern California, for example, has been told that its annual power bill is expected to rise from about $70,000 in 2003 to $1.05 million in 2006, said Ed Danosky, general manager.

Farmers are screaming about economic disaster and broken promises.

"People are going to suffer," said Steve Kandra, president of the Klamath Water Users Association, who said he believes many will resort to more wasteful irrigation flooding that uses a lot less juice.

But others see market-based power rates for irrigators as the much-needed catalyst for resolving entrenched conflicts between agriculture and fish. The irony is that by leaving it to market forces rather than government, they say, fish and farmers could end up healthier.

Especially in the hillier portions of the basin in Oregon, where sprinkler irrigation is dominant and flood irrigation impractical, high power rates can be an incentive to forgo farming on marginal lands.

By first abrogating the rights granted to the Natives, then spending taxpayer money to "reclaim" the valley for agriculture, then encouraging people to move there, then subsidizing their electricity (and God knows what else), thus bringing many competing interests into the valley, bureaucrats established the conditions for conflict.

2. Megan is very adamant about the balance claim; her caps lock key frequently gets stuck when discussing it. Unfortunately, the idea of measuring and balancing needs is meaningless. It has great emotional appeal, but doesn't describe what is really happening. At best, bureaucrats are making judgments about relative costs, but there can be no doubt that they are applying their own standards for such things as discount rates, which constituencies to poll, and how much weight to attach to them. They are not measuring the needs of fishermen, farmers, or Natives and comparing them on a calibrated needs scale. As with the global warming debate, we seem to have lots of physical science experts looking at a problem and then making a social science policy recommendation.

Balance, in any meaningful sense, means that each side gives a little and gets a little. A balanced solution would have involved give and take, bargaining, and compromise; I propose private mechanisms for such below. However, from what I can tell, the recent sequence of decisions had anything except balance in that sense. First, the Fish & Wildlife Service's biological opinions and those of judges reviewing the case have been in favor of fish, Natives, and fishermen, full stop. Then, the reversal was in favor of farmers, full stop.

In this way, bureaucratic decisions don't solve conflicts, they create the conditions for eternal conflict. One side is in, the other is out, and the side left out has no recourse but to politics. This is the unstated goal of much public policy: simultaneously remove traditional decentralized mechanisms for problem solving while replacing them with a central mechanism which puts politicians and bureaucrats in the role of Solomon. That is exactly what Megan means when she says that people with a stake in the conflict should not be allowed to decide it: bargaining should be banned and replaced with a rational, technocratic authority.

3. My original draft defended Megan and her co-workers from the association with totalitarian bureaucrats, but I realized in researching the background of how the conflict came about that bureaucrats are in fact the source of the wrongdoing in question. They don't realize it; they actually believe their own propaganda about working for the common good. But as I have just argued, they create the conditions for conflict, then they "resolve" the conflict in such a way that it guarantees it will continue, and meanwhile they eradicate all of the mechanisms which would allow the conflict to be amicably resolved for everyone.

People worry incessantly about the problems of artificial monopolies in private markets, but don't seem to recognize the analogous process in the "market" for law, a market in which the main player is also the referee and league commissioner. Bureaucrats do have a dog in this fight: their existence must be justified. They have interests at stake just as much as the farmers or fishermen. And yet they claim to be honest brokers.

From her comments, Megan seems to be aware of Hannah Arendt's "banality of evil", but she does not seem to have absorbed it in a way that she can apply it. Although I'm sure there were good invoice inspectors and dam inspectors in every totalitarian regime, the pseudo-libertarian commenter was wrong to liken this particular office to one charged with the task of making sure work-camp trains were running on schedule, but that's really beside the point, isn't it? Megan makes a nice show of arguing how her particular office and the office in question in her original article are filled with people trying to do the right thing, but that is also beside the point.

The civil employees are working within a system in which the rules -- not the laws she cites, but the rules of the game -- are already set and their job is merely to be the agents of the people who set the rules.* Sure, there's a little slop in the system to let everyone believe this is a transparent democracy, but get real. Someone has already decided that your telemetry geek should measure this and not that; it serves an interest. The public meetings serve to give the public the impression that cheap talk is worth something; at the end of the day, you decide against one group and for another. Someone has dictated a long list of acquisition regulations that ensures that the invoice checker is only going to see certain kinds of invoices and look for certain kinds of data. But those are just the surface conditions.

The subsurface conditions have been in place for generations: promises were made, reclamation projects were funded, subsidies were provided. Megan makes no mention of those inconvenient facts or their implications. Second, note that the salmon industry has already gotten their settlement (here and here). Now, Megan is outraged that an elected official has the audacity to intervene on behalf of a constituency group? That is what politicians do. Note that I am not defending Cheney; doubtless what he did was as cynical as anything else this administration does. Jane's Law holds.

If ultimately successful at rationalizing all decision-making in this way, a central government will have completely displaced private institutions and made the populace entirely dependent on faceless but ostensibly well-meaning technocrats. That is the problem of progressive wonkism and centralization that I have written about. And while the Fish & Wildlife service is not as dangerous as the office of Communications Assistance for Law Enforcement, passive acceptance of centralization is part of a broader problem.**

4. Megan keeps using that word "libertarian": I do not think it means what she and her sympathetic commenters thinks it means. It certainly does not mean someone who does not understand communal goods (who are Eric S. Raymond and Jimbo Wales, what is the noosphere, and how would they be relevant to this discussion?). And I'm not sure I can think of a single libertarian who would automatically side with those farmers who were essentially benefiting from at least two previous government interventions.

In fact, a libertarian response to this would have covered at a minimum the following issues:

• native property rights (wouldn't the 1864 treaty have priority over everything else?)
  
• actual fishing rights which are defensible and transferable, as opposed to fishing licenses
  
• Groups like Trout Unlimited have been promoting the idea of in-stream rights for years. Many states have laws oriented towards farming or ranching that dictate that non-use or in-stream use of water rights results in the forfeit of those "rights". Where TU has been successful at changing the status quo, they can buy water rights and then leave the water in the river so their favorite game can flourish.
  
• Stop subsidizing the farmers' inputs such as electricity: see above.
  
• Bargaining between the fishermen and the farmers. Unfortunately, while I found several articles dealing with proposals to buy farmers out, I found none that discussed direct bargaining between the two groups. Buying the farmers out is something Richard Epstein, another quasi-libertarian, would get behind. Some sources claim that by buying out just the most marginal farms in Klamath, it might be possible to leave the remaining farms and restore enough water to the river to meet the needs of fishermen. Direct bargaining between the two groups is something in which Ronald Coase might be interested. However, contra several quasi-libertarian commenters who have joined the fray since the original post, there are large transaction costs problems to be sorted out, so the Coase Theorem does not "guarantee" an efficient solution regardless of who gets the rights. Sorry.
  

Interestingly, we don't seem to have any politicians or bureaucrats trying to figure out the best way to assign property to minimize transaction cost problems so that the conflict can be resolved by the actors themselves. Why do you suppose that is?

5. Megan claims to be upset by a rogue agent hijacking government agencies for his own agenda. I'll grant her that this seems to be just that. But as I noted in this post, the left is full of people who are currently upset that NASA is not headed by a rogue agent for their interests and that the ideological purity tests are not in their favor. Must I really spend time looking up and finding all the ways that other, non-Bush administrations have applied their own purity tests? Really?? And no, don't bore me with the anecdote about the token right-to-lifer picked by Clinton to be the Second Assistant Vice-Chair of the Office of the Undersecretary for Wilderness Area Parking Lot Stripe Paint Standards. You know that in general, on average, every president picks people who broadly agree with him.

C'mon, Megan. Your real problem here is that the rogue isn't working for your team; you would be perfectly happy with a fellow traveler rogue who uses all of the right catch-phrases and paeans to the correct totems. You will happily look the other way when they violate laws with which you happen to disagree; you may even defend their behavior. Elk Hills? Serbia? Mazen al-Najjar and Nasser Ahmed? Carnivore? Echelon? Jane's Law holds.

As you mature as a civil servant, you will learn to operate within those laws with which you agree, in opposition to those with which you disagree, and in complete ignorance of many more. Hayek's theory about information in society is far more relevant to this discussion than The Road to Serfdom. It would be better if politicians and civil servants actually learned about the former, had a little more humility about their own work, and tried to think of ways to decentralize decision-making by using some of the methods bulleted above instead of thinking of themselves as hard-working, enlightened, public-interested, unbiased, angelic promoters of sweetness and light. "Civil Servant" is a misleading title intended to frame our perception: "Government Employee" is probably better.

At the same time, it would be better if citizens spent more time thinking about how to pull power back from the central authorities, to resolve conflicts ourselves, and to build or rebuild local, community-based institutions rather than actively supporting powerful, central authorities who claim to be able to do these things for us.


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* Civil servants Government employees aren't entirely passive in the process: they also shape and interpret and the laws in order to preserve or expand their own authority. Megan defends the Endangered Species Act elsewhere with an ad populum argument. While popular among the voting public, it has been less so among technical experts. In this way, Megan lines up support for her favored policies no matter what: they are either popular with the public and must be kept and enforced despite the objections of technical experts, or they are popular with technical experts and must be kept and enforced despite the public outcry. This is just one of the many techniques she will perfect as she continues her career.

** Thanks to Arnold Kling, I rediscovered Unqualified Reservations and this excellent and relevant article. Sorry, Arnold, Bryan set me straight.

Local, action: Buying Whole Foods' local claims

In Kevin Carson's book chapter, "Decentralized Production Technology", he has this to say about my comment about Viking appliances and planned obsolescence:

Here I take issue, at least in part, with Husman's analysis. First of all, it's hard for me to understand why the average lifetime of an appliance, as determined by the durability of its components, should as a matter of strict definition be excluded as a matter of design choice. After all, Husman himself mentions Viking refrigerators as an example of a product specifically designed for longevity. Second, he seems to be defining "planned obsolescence" far too narrowly. Planned obsolescence refers not just to how soon or how frequently an appliance breaks down as a result of problems with individual parts, but also to how amenable it is to repair. Planned obsolescence, in this latter sense, includes 1) a deliberate choice among design alternatives in favor of a design that makes repair more costly, difficult, or complicated, and 2) the use of such expedients as patents to control the availability and pricing of replacement parts.

First, as I pointed out, the Viking appliances are expensive, on the order of $6,000 for a refrigerator. And the same is going to be true of many such things: a Mercedes or Lexus is going to last longer, all things being equal, than any economy car. So I'm not opposed to including longevity as a design criteria, but rather pointing out that the longest lasting items are going to utilize the latest and most expensive elements and techniques. On the other hand, a Toyota lasts longer than its similarly priced competitors and people desire that feature. Second, I'm going to definitely concede that Kevin has a good point about repair difficulty/ease being part of the equation. The original Model T was made to be easy for farmers to repair, and they loved it. The current generation of cars is ridiculously difficult for the shade-tree mechanic to do anything but change a tire.

But that's beside the point I'm after in this post. What I'm mostly after is the fact that moving to an economy that we might prefer is going to look expensive. I introduced this with the appliance debate, but I'm going to flog the "controversy" between Michael Pollan and John Mackey for the rest of the material.

I first happened to hear about Michael Pollan during this interview on Fresh Air; I have his book Omnivore's Dilemma on my get-around-to-reading list, but this interview will have to suffice for now. It supported most of the things I have come to believe about our diet, corn, and related issues. Note especially his comments after 29:00, in which he says,

To eat in a way that is healthy for you and healthy for the environment and doesn't use a lot of energy is more expensive. That's an issue we have to grapple with. A lot of this food is elitist food, and can be called elitist food, and often is -- usually by proponents of the industrial food system. Any situation where McDonalds is claiming the high moral ground, I'm a little dubious of and this is one of them. But I think we have to confront this.

There's several different ways to look at it. One is cheap food is not as cheap as it looks. The real cost of that $0.99 burger in terms of ... is charged to public health, is charged to the environment, is charged to your health. Even though it's cheap at the register, that is not the real cost of that food. That is an irresponsible price. I don't know that people want to buy irresponsibly.

Now some people don't have a choice. There are a percentage of people in this country who probably can't afford to eat organic or even to eat more sustainably 'cause organic is not the only answer. Let's not oppose organic to everything else; there are many more alternatives out there. Grass fed beef is not organic but it's better, I think, than organic.

If you go to the supermarket, it is true that -- and you're a rational actor, and you don't have a lot of money -- if you're basically buying energy for you're family -- that's to say calories -- the rational thing for you to do under the system we have is to patronize the center of the store, all the processed food. Because a dollar will get you 2500 calories of cookies, of snacks, of potato chips and if you go to the produce aisle, it will only get you 250 calories of carrots

So, y'know, we're programmed by evolution to seek the most energy with the least effort possible and the supermarket has created an environment where that forces people essentially to buy the least healthy calories. But that's not a function of the free market, that's not a function of nature, either. That is a function of policy. There's a reason that the least healthy calories in the supermarket are the cheapest, and that is essentially "policy": we subsidize the cheap calories. We subsidize ... those calories are calories that come from corn and all those calories -- all that high fructose corn syrup -- is subsidized by our taxpayer dollars, the carrots are not.

So it seems to me that for the people who are shopping this way, the challenge is to change the set of incentives and figure out a way to make the healthy food cheaper and to make the unhealthy food a little bit more expensive.

[transcript acquired the with old-fashioned method: listen and type. I hope it's accurate.]

From the interview, Pollan's point seems to be that we should be more careful about what we eat. For example, avoiding anything with HFCS is a good shorthand for not confusing "food products" with "food". He also differentiates between good and bad organic, where bad organic is the type where free range hens never actually get outside (apparently, they haven't checked their contracts). I believe that the use of petroleum as the major input to our food is a problem since one of petroleum's alternative uses is transportation and that means that the cost of food to our poor people is rapidly becoming impacted by the transportation choices of increasingly wealthier people in China and India.

And we thought we freed ourselves of such considerations when we shucked the gold standard.

So Pollan finally ends up endorsing something like the 100 mile diet described by Alisa Smith and J.B. MacKinnon in their book of the same name. He believes that eating local means that farmers will use better inputs (no pesticides or petroleum) and that local farming will inhibit sprawl. And since localism is the point of this post, I swear I will return to it after dealing with two asides.

First, I believe he could have selected better examples. For example, by having all of our farming concentrated in Iowa, they may have eliminated birds there, but we increase the potential for green space around our cities everywhere else. He is basically proposing that we replace the native species of plants around our cities with food stuffs, which only shifts the problems around a little, but does not eliminate them. Indeed, this is the argument of Nobel Peace Prize winner Norman Borlaug, the so-called father of the green revolution. In an article in The Economist, he argues

Thanks to synthetic fertilisers, Mr Borlaug points out, global cereal production tripled between 1950 and 2000, but the amount of land used increased by only 10%. Using traditional techniques such as crop rotation, compost and manure to supply the soil with nitrogen and other minerals would have required a tripling of the area under cultivation. The more intensively you farm, Mr Borlaug contends, the more room you have left for rainforest.

Granted, Borlaug and I are offering a false dilemma here*, but the point is that Pollan doesn't seem to have thought this far through the problem (perhaps he has and it didn't come out in the interview; I haven't read the book).

Second, Tyler Cowen's critique at Slate left me flat. Tyler points out that Pollan's approach neglects to value our time and other market signals. Tyler makes a good point when he says that we may respond to higher fuel prices by driving less or buying smaller cars, but that we probably won't start growing grapes in the back yard. However, I'm surprised that Tyler doesn't more strongly endorse Pollan's descriptions of the problems of subsidization. Neither does Tyler recognize a benefit in which I expect him to be most interested, which is the improvement in food quality that might arise from a more local, fresher supply of ingredients.

While Tyler mentions the problem with the corruption of the term "organic", and agrees with Pollan that shopping at Whole Foods is an insufficient response to the three problems in the industrial food system (our health, our environment, the treatment of animals), Whole Foods founder John Mackey responded much more vigorously in a series of blog posts and public forums. As a result, each has moved a little in the direction of the other, Pollan agreeing that the Whole Foods approach is not as bad as he thought and getting better, while Mackey conceded that some of their practices needed review and changing.**

Mackey's summary of his arguments can be found in this presentation. In slides 39-41, he mentions something that has bothered me for some time now. While writing about the theme of self-sufficiency in Kirkpatrick Sale's Human Scale, I told a story about driving out to a local chile farm to acquire the green ambrosia. Even in my high efficiency automobile (46-50 mpg), it probably required a quart or two of fuel to make the round trip. Most other vehicles would require more, and most of the city lives further away from Lujan Farms than I do. The fuel required per pound of a truckload of chile would probably be much lower when delivering to a market in the center of town, but people still have to get to the market. This is an optimization problem, so the least-energy solution will not necessarily be "don't shop at Wal-Mart". Given existing social circumstances, the optimal solution will probably depend on where you live and what you drive; "shop at Wal-Mart" may actually be the solution for many people.

That is only part of the issue. When you account for all of the inputs (soil, sun, water, etc.), the fact that some geographic regions are blessed with some of these in abundance while others are not, and that economies of scale can be realized when using railroads and ships, local may not be the answer for everything. Mackey's summary of this part was, "If you live in Berkeley, you will use less fossil fuel and produce less carbon dioxide by buying rice from Bangladesh than from California." I'm inclined to think that even if that particular claim is not correct, it will be true that some foods will be less energy intensive when grown and shipped from afar rather than locally.

But is Mackey sincere when he claims that Whole Foods' supply chain is not as bad as Pollan claims and getting better? I was originally going to post about an article in Forbes that I bookmarked some time ago (To Fight Rivals, Whole Foods Buys Local). Unfortunately, Forbes can no longer find the article on their own site. Fortunately, Google can find it elsewhere, so I excerpt it here without linking:

Dairy general manager Matt Lucas began bringing the glass bottles himself from the Morning Fresh farm in Bellevue, Colo., 60 miles north of Denver. Until then, Morning Fresh had long made its name on home deliveries.
Since his Whole Foods deliveries began in 2004, Lucas estimated, his dairy's sales have increased 20 percent. Morning Fresh now sells at least 1,000 gallons a week to supply a Whole Foods distribution center serving 10 stores.
"It's a breath of fresh air to get involved with a group like that. They were so excited to get our product in their stores," Lucas said.
By strengthening -- or, as some farmers say, returning to -- their commitment to local products, Austin, Texas-based Whole Foods and Boulder-based Wild Oats Markets Inc. are fending off big chains like Wal-Mart Stores Inc., Kroger Co. and Safeway Inc., which have expanded their own organic offerings and put pressure on the smaller "natural" grocers. "With Wal-Mart barging into the lower-end organic sales, this is a way these other retailers can differentiate from what Wal-Mart is doing," said Dan Hobbs, a cooperative development specialist with the Rocky Mountain Farmers Union.
...

Small local growers often cannot offer lower prices than large-scale operations that benefit from economies of scale and cheaper labor. But fuel costs for shipping food are less for shorter trips, which in turn often require less packaging to preserve food. Buying local also shortens the time it takes produce to get to market, preserving nutrients and freshness, ....
...
Whole Foods defines a local product as having traveled less than seven hours to get to the store.
It sells more than 200 produce and floral items from more than 60 local growers in the region covering Colorado, New Mexico, Kansas and Missouri. Overall, it does business with more than 2,400 independent farms.

Apparently, Whole Foods is looking at local foods (in the article, consumer interest in local food is credited in part to Pollan's book) as a competitive advantage over purveyors of "bad organic" such as Wal-Mart. If true, it means that Whole Foods' conscience and self-interest are aligned with those of their customers, suppliers, and (if you believe John Mackey's New Agey Manifesto) employees and stock holders. If true, that's pretty cool.

A few things can be pulled out of this.

• I think the struggle between Whole Foods and Wal-Mart leaves us all better off than Pollan does. I can't tell which paradigm will win, but I am certain that having them square off with two different formulas -- and having the local farmers market and small grocery stores as well -- means that my food supply is simultaneously more secure, less expensive, and of higher quality than if someone was to start mandating that their favorite approach should be the victor. Also, Wal-Mart is a big boy, so perhaps the merger of Whole Foods and Wild Oats creates a stronger competition between the two.
• Still, as Pollan points out, it is policy that the corn industry should be as large as it is. Frito-Lay and Coke need to occupy all that premium shelf space because they have products that need to be sold to keep the machine running. In that sense, Wal-Mart is a creation of both Sams: Uncle and Walton.
• Mass producers have genuine advantages over craft production. For one, their cash prices are lower. Amana is cheaper than Viking, Kraft is cheaper than the dairy farm down the road, Wal-Mart is cheaper than Whole Foods. If I'm on a limited budget, that's going to be important.
  
• However, there are hidden costs. Note that above I said, "moving to an economy that we might prefer is going to look expensive", not "be expensive". All things considered, and on average, cheaper appliances and vehicles are typically not as long lasting or efficient, cheaper food products are not as tasty or nutritious as organic and artisan foods, and mass production relies on a massively subsidized infrastructure. We taxpayers pay for agriculture subsidies and transportation subsidies, while we as people pay for the externalities (farm runoff, smog and soot).***
  
• The cost of transportation is a factor in whether local or mass produced is less expensive. The railroad ushered in the first age of mass production and broke down state and regional barriers and built a nation while the container and container ship ushered in the age of globalization. If we are entering an era of permanently higher fuel costs, those trends may reverse. That's not all bad.
  

I am interested in understanding how to reverse some of the policy decisions of the past 150 or so years without reverting socioeconomically to what existed then (grinding poverty, extreme inequality -- contra to what populist demagogues would have you believe about today being the worst of times in those regards). Employing lean production can build a local manufacturing base that produces high quality goods at low costs with little waste, benefiting both workers and consumers. Removing taxpayer supports shifts the advantage from ADM and Cargill toward local farmers. And local governance moves power out of distant capitals and bureaucracies into our hands.

In an upcoming post, I want to say something about local energy production.

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* You could combine localism and organic methods.

** Other takes on the Pollan/Mackey "smackdown turned lovefest":

• An Open Cupboard suggests that Whole Foods should be more diligent about teaching people to shop on a low income. Easy: vegetarian.
• Whole Foods blog: Points out that Whole Foods stock took a $2 billion dive after Pollan's book came out, but also notes that may be attributable to other problems.

*** Yes, it is literally true that the corresponding costs of obesity cost us money through Medicare/Medicaid. However, that also is a matter of policy and I am not going to start using that as a pretext for dictating other people's behavior and food choices.

Energy roundup

1) News from Green Car Congress

• Hybrid sales are continuing to climb. According to the diligent folks at Green Car Congress, hybrids accounted for 3% of cars sold in May. It's weird, almost like there's some kind of incentive, perhaps something to do with the cost of fuel? Yet, the politicians tell us, the market will fail to bring us efficient cars unless we force them to do it via CAFE and hybrid subsidies. Hybrid subsidies might be a factor in their popularity, except that Toyota doesn't seem to be seeing much drop in demand after they hit the magic number that shuts off the subsidy every year.
• In another GCC article, we find that Honda is discontinuing the Accord hybrid. Apparently, "hybrid" does not equal "slam dunk". The Civic Hybrid works, the Accord Hybrid does not. Apparently, consumers haven't gone completely irrational over the "sexiness" of hybrids.
• Honda, Mercedes, and Bosch are exploring diesel-electric hybrids. Apparently they believe there may be a market in 70 mpg vehicles that can run on vegetable oil.
  

2) An NPR article on plug-in hybrids titled, "Corporations push Congress on Climate Policy" makes some fantastic-sounding claims:

A company called A123 Systems invented the battery pack. Les Goldman is the lawyer hired by the company to represent it in Washington. He has been bringing the Prius up to Capitol Hill, singing its praises to senators and staffers. He tells them it gets 100 to 170 miles per gallon — "and that includes charging the battery every 40 miles or so. And one charge, which takes about four hours, will cost you at the electricity rates in the Washington metropolitan area, at night at about 55 or 60 cents."

What A123 Systems wants is a tax break, not for itself, but for consumers. A decade ago, Congress approved tax credits worth up to $2,000, for buyers of new hybrids. It helped dealers sell thousands of the high-mileage cars. Now, Goldman asks the senators, why not do the same thing for these new battery packs?

Now, I assume you caught the fact that they want it for their consumers, not themselves, right? So they selflessly hired a lobbyist to point out that tax breaks helped Toyota sell "thousands of high-mileage cars". At no point does the reporter stop and ask if rising fuel prices were behind that increase rather than the tax breaks, nor does the reporter point out that A123 might perhaps benefit from those increased sales.

But let's go beyond that. Assuming the following:

• Approximately 65% of electricity energy is lost in transmission (see this great graphic). Thus, for each kW-h consumed, 3 must be generated.
• 1 kW-h of electricity is 3,600,000 Joules (3.6 MJ)
• A gallon of gasoline contains 132 MJ of energy
• Electricity costs about $0.10 per kW-h, so $0.55 to $0.60 worth of electricity is about 5.5 to 6.0 kW-h
  

That means that the plug-in hybrid is getting 40 miles per 5.5 kW-h or 40 miles per (5.5*3.6 MJ) = 2.02 miles/MJ. Inverting that, I get .495 MJ/mile, but that is for energy consumed, not energy generated. By multiplying by 3, I find that the vehicle used about 1.485 MJ of energy generated per mile. By inverting that number and multiplying by the 132 MJ/gallon of gas, I can calculate an equivalent mpg. The electricity is giving an equivalent of 267 miles per gallon for energy consumed, but about 89 mpg equivalent of energy generated because of transmission losses. Not bad.

It is also using gasoline at the rate of 170 miles per gallon. Using the higher figure, that's 170 miles per 132 MJ, or about .776 MJ/mile, roughly half the energy required to go one mile with electricity when accounting for transmission loss.

So for every mile it goes, it's consuming about .495 MJ of electricity used or 1.485 MJ of electricity generated and .776 MJ of gasoline. By adding those, I get the total average energy usage per mile. The combined efficiency -- accounting for transmission loss -- is about 58.5 mpg. That's not much more significant that what I can get in my car (50 mpg on the last tank).

Also, gasoline at $3.5/gallon is equal to $0.095 per kW-hr, or slightly cheaper than what I am using for the cost of electricity (diesel currently happens to be a much better deal at $2.70/gal).

So, instead of serving as a panacea, plug-in hybrids shift the fuel from oil to coal, natural gas, or nuclear, and shift the costs from your cheaper gasoline bill to your slightly more expensive electricity bill. Coal is reputed to be dirtier; it also happens to be burned somewhere other than in your own neighborhood. As you might guess, electric companies are behind some of these efforts to promote plug-ins.

Of course, if you were to install a wind or solar generator at the house, the electricity would be "free", but then again the sun and the wind usually aren't very effective at night when the car is parked. And, as I noted near the end of this article, some people are trying to get something for nothing by plugging their electric vehicles in at work. So here are two predictions/suggestions of what we may see in the next few years if fuel prices stay this high:

• Employers providing charging stations at worksite parking areas for charging employees' plug-ins. Install solar panels on the shelters and you increase your "green cred" while simultaneously providing shaded parking and "free" recharging. Sell extra power back to the grid (net metering) and make that unused space pay its own rent.
• Coin-op meters at large parking facilities for car charging. The coin-op serves as both parking fee and recharge fee. It would be nice if they would allow debit/credit/Paypal transactions, too.
  

3) Regarding the previous post on the news that Congress is considering a measure to block states from enacting more stringent measures: this poses a tactical problem for a decentralist. On the one hand, I'm against turning over all decision-making to a large and growing central decision-making bureaucracy and would much rather see local communities working to preserve their environment. On the other hand, opposing the federal/national Leviathan means protecting the paternalist busybody living next door. It puts you in the position of fighting for local decision-making, and then fighting against those decisions. Geez, I guess that's what Jefferson meant by, "The price of freedom is eternal vigilance." But at least I can meet my neighbors and reason through these issues. And when locals make decisions that help some and harm others, they know the score and can compensate them on the next go-round; when large nations make decisions, the far-flung citizens have little idea who is harmed or benefited, so they will remorselessly slam the same scapegoats in every round.

4) Department of Duh: The Worldwatch Institute claims that photovoltaic (PV) costs are set to decline 40% by 2010. Until just recently, as I noted back in July 2006, PV costs were rising. My guess is that consumer demand driven by both high fuel prices and worldwide government subsidization was driving the trend. Since then, the rise seems to have flattened out and even tipped the other way. If the WI predictions are correct, then Julian Simon should be calling WI founder and perpetual Malthusian doomsayer Lester Brown from the grave to say, "See? Told you so."

40% is a substantial reduction. As I noted in this post, PV is only economical under certain circumstances, but a 40% drop in prices certainly opens that up.

So why "duh"?

Well, if you know that the price is set to drop 40% in the next three years, why would you buy now? And if it is set to drop due to market supply and demand factors (which is arguable, see below), then why would you subsidize it? In fact, if many people would defer planned purchases just a little while, the over-production would create an inventory problem and drive prices down even faster.

Note from the WI report that the primary driver behind the supply increase is the money pouring into China from capital markets. Are they investing because they all believe in Peak Oil, in reducing carbon dioxide emissions, or in capturing some rents through programs like California's Million Solar Homes? If the latter, can this really be said to be a drop "due to market supply and demand factors"?

"Well, no matter" say the Big Government Greens, "whatever it takes to get there. As long as we get to screw Big Oil in the process."

How do you suppose Big Oil got that way? Hint: Among the biggest sellers of solar panels are little mom & pop companies like Shell and BP. Baptist, meet thy Bootlegger.

Centralizing to save you from your neighbors

I generally think that the California Air Resources Board (CARB) rules contain some pretty ignorant stuff, but that at least it only effects Californians. Well, and the other 6 or so states that have adopted them. But at least federalism is still gasping for breath. To people who want to be able to show those mean rotten Republican bastards in Washington that something can be done about global warming and air pollution without killing the consumerist economy, the CARB and other state standards are a great way to ... um ...

Hey! What the ... ?

According to the Green Car Congress, it looks like the Democrats running the US House Committee on Energy and Commerce are looking to pass an amendment to the Clean Air Act to "block states from establishing standards to limit the emission of greenhouse gases from automobiles."

But, Democrats don't do this, right?!

Geez, people, wake up. As noted in the comments on GCC's article, opensecrets.org shows that legislation author Rick Boucher (D-VA), Chair of the Subcommittee on Energy and Air Quality Chair, is heavily sponsored by the electric utilities.

Hope you enjoyed the Kool Aid.

Griffin commits heresy

I happened to walk out of the shower as these comments were being broadcast for the first time:

It has been mentioned that NASA is not spending as much money as it could to study climate change -- global warming -- from space. Are you concerned about global warming?

I'm aware that global warming exists. I understand that the bulk of scientific evidence accumulated supports the claim that we've had about a one degree centigrade rise in temperature over the last century to within an accuracy of 20 percent. I'm also aware of recent findings that appear to have nailed down -- pretty well nailed down the conclusion that much of that is manmade. Whether that is a longterm concern or not, I can't say.

Do you have any doubt that this is a problem that mankind has to wrestle with?

I have no doubt that ... a trend of global warming exists. I am not sure that it is fair to say that it is a problem we must wrestle with. To assume that it is a problem is to assume that the state of Earth's climate today is the optimal climate, the best climate that we could have or ever have had and that we need to take steps to make sure that it doesn't change. First of all, I don't think it's within the power of human beings to assure that the climate does not change, as millions of years of history have shown. And second of all, I guess I would ask which human beings -- where and when -- are to be accorded the privilege of deciding that this particular climate that we have right here today, right now is the best climate for all other human beings. I think that's a rather arrogant position for people to take.

Is that thinking that informs you as you put together the budget? That something is happening, that it's worth studying, but you're not sure that you want to be battling it as an army might battle an enemy?

Nowhere in NASA's authorization, which of course governs what we do, is there anything at all telling us that we should take actions to affect climate change in either one way or another. We study global climate change, that is in our authorization, we think we do it rather well. I'm proud of that, but NASA is not an agency chartered to, quote, battle climate change.

My first thought was, -- wow, a reasonable, measured answer, who is this guy? I soon found out that the speaker was NASA director Michael Griffin, and that the reaction was virulent.

Before looking at some of that reaction, however, let's consider a few key points:

• He believes that anthropogenic (man-made) climate change is real. He believes that anthropogenic (man-made) climate change is real.
• He doesn't know whether the current climate is the optimum climate. He doesn't say it is, he doesn't say it isn't. The burden of proof is on those who claim that we need to spend billions or perhaps trillions on maintaining the current climate. The burden is rarely placed on those who would have to prove a negative.
• He believes that anthropogenic (man-made) climate change is real.
• He is mostly reacting against claims that NASA should be spending more to oppose climate change despite the fact that there is no legislation directing them to do so. Study yes, battle no. This is a legal issue, not a scientific issue.
• He believes that anthropogenic (man-made) climate change is real.

So, he has stipulated to the AGW history, but thinks caution is in order when making decisions for the future, and besides, it is illegal for him to attempt to battle it. And did I mention that he believes ... ah, so I have.

What would be said about an individual -- especially a businessman -- who simply takes matters into his own hands and starts making decisions that will affect generations to come? Wouldn't they be labeled asocial, hyperindividualist, selfish, greedy, and/or arrogant? What would be said about someone who hijacked a government agency for said purposes? The words "rogue" and "fascist" come to mind. And what would be said about people who encourage such behavior? Now I'm thinking "populist" and "demagogue". But I suppose it all depends on whether the person is breaking the law to do something you happen to favor, and whether you believe in things like "precedent" or allowing the opposition to occasionally win an election.

So what was the reaction to this? NPR published no fewer than two responses (here and here) and ABC news also chimed in here.

"It's an incredibly arrogant and ignorant statement," Hansen told ABC News. "It indicates a complete ignorance of understanding the implications of climate change."

Hansen believes Griffin's comments fly in the face of well-established scientific knowledge that hundreds of NASA scientists have contributed to.

Note that Hansen never responds to the actual comments, instead submitting arguments from intimidation (only ignorant people say that) and ad populum (hundreds of scientists ...). Yet it is Hansen who is held up as the model of scientific integrity. To be fair in this as in all reported stories, they could have neglected to print his more thoughtful reflections, opting instead for the juiciest quotes; I've had such experiences myself. I'll continue searching for the retractions.

Another sample:

"I was shocked by the statement and I think the administrator ought to resign. I don't see how he can be the effective leader of a science agency if he doesn't understand the threat of global warming," said Michael Oppenheimer, a Princeton University atmospheric scientist and lead author of some of the latest reports issued by the Intergovernmental Panel on Climate Change, or IPCC. The international body, made up of thousands of climate scientists is considered one of the most authoritative bodies on global warming.

Is he actually saying that any bureaucrat who thinks that he ought to constrain his agency's actions to what is legally permissible ought to resign for thinking just that? The last sentence in the quoted selection was put there I suppose for readers who don't know what IPCC is, but it should have been likewise noted that Griffin accepts their version of history. Does agreeing with someone on their facts, but disagreement with them on their conjectures, constitute "not understanding them"? Perhaps we ought to re-open the debate about heterogeneity with respect to the exact science of forecasting?

Another sample:

Last year, many NASA scientists were upset when reports surfaced that the agency had quietly deleted the phrase "to understand and protect our home planet" from the NASA mission statement. The scientists believe research on issues like climate change will suffer as NASA shifts priorities toward exploration missions to the moon and Mars.

"Earth has always been central to NASA's science," Hansen said.

Yes, and grants to study Earth have always been central to the well-being of NASA's scientists. Nothing brings grant money faster than emergencies - real or fabricated. As an interesting side-note, it used to be the standard left-wing position that NASA was a waste of resources that should be spent to solve poverty and hunger here on Earth; that apparently has been reversed.

The reactions to the statement around the blogosphere are mostly in line with the commenters' predispositions. If you believe in AGW, then Griffin is is either a shill or an impostor scientist. But I have seen few attempts to address his actual points. If you don't believe in AGW, there is considerable enthusiasm for a supposed repudiation of the theory.

As to his qualifications, I'd say that his academic background is as impeccable as one could have for his position (cribbed from his NASA bio):

• bachelor's degree in Physics from Johns Hopkins University;
  
• master's degrees in aerospace science from Catholic University of America; electrical engineering from the University of Southern California; applied physics from Johns Hopkins University; Civil Engineering from George Washington University
• Ph.D. in aerospace engineering from the University of Maryland
• adjunct professor at the University of Maryland, Johns Hopkins University, and George Washington University, where he taught courses in spacecraft design, applied mathematics, guidance and navigation, compressible flow, computational fluid dynamics, spacecraft attitude control, astrodynamics and introductory aerospace engineering
• lead author of more than two dozen technical papers, as well as the textbook, "Space Vehicle Design."
• registered professional engineer in Maryland and California
• a master's degree in business administration from Loyola College
• certified flight instructor with instrument and multiengine ratings
• chief engineer and as associate administrator for Exploration at NASA
• deputy for technology at the Strategic Defense Initiative Organization

Can the tables be reversed? Many of the commenters have little background in the sciences relevant to preventing the change, and offer no support to their assertions. Take for example this clip from an otherwise relatively balanced Live Science report:

Gavin Schmidt, a climate scientist with NASA's Goddard Institute for Space Studies responded via email to a request from LiveScience to comment on the NASA chief's remarks to NPR: "Griffin's comments seem surprisingly naive. We are not in a situation where we are shopping around for an ideal climate, but that we have adapted to the climate we have, and that therefore large changes to it are not likely to be beneficial."

Can Schmidt produce the relevant social, economic, and biological data that allows him to make such a sweeping claim? In fact, the climate has been both colder and hotter than the current climate. The pro-AGW crowd has now settled on the trump-card claim that the Medieval Warming Period was localized; yes, it was, to the Northern hemisphere, where most of the world's population lived and lives. That was beneficial. Even the Stern Review last year made the point that a 1 degree increase is likely to result in more, not less, food. But cooling is likely to be worse in terms of producing food, and Ice Ages have come about quite spontaneously in the past. Which is the scenario to be avoided most? What are the "likely" risks of each?

The LiveScience report also contained this bit:

Anthony Kreindler, a spokesman for Environmental Defense, an environmental rights organization, today agreed in part with NASA's clarification: "It's not within NASA's responsibility to make policy," he said.

But he disagreed with Griffin's earlier remarks.

"To suggest that we can't do anything to fix the climate change problem is a direct [refutation of recent IPCC findings]," he told LiveScience. "I think it's just ignoring the scientific consensus."

So, a rare note of the truth of Griffin's comments, followed by the required rebuttal, and then off to the claims that it has been proven that climate change can be averted. Note that the linked suggestions for averting climate change, which many seem to refer to as certainties, are complemented by many instances of words like, "should", "could", "if", "might", and so on. They also make some glaring errors, like saying that

The report says governments could lower economic costs if low-carbon technologies are promoted via carbon taxes or "cap-and-trade'' systems like Europe's, whereby industry is allocated emissions quotas, which can then be traded among more efficient and less efficient companies.

Well, perhaps they could if Europe's cap and trade scheme weren't largely perceived as a failure (a government failure designed to address an ostensibly market failure, though it is arguably a government failure - subsidizing automobiles - from an earlier period). The LATimes article here and Washington Post article here cover the EU carbon market failure:

Skeptics, though, point to the troubles of the cap-and-trade system the European Union has used since 2005 to reduce carbon emissions. Under pressure from industry, European governments gave away too many credits to polluters; the result was that the price of the credits collapsed, undermining the incentive to cut emissions or use cleaner fuels. (Some analysts say the cost fell so far it was cheaper for European utilities to buy credits and burn coal than to burn cleaner natural gas.) A second round of mandated emission reductions scheduled for next year could ameliorate the problem, but at the least, the European experience suggests that designing a successful cap and trade is an enormously complex undertaking which may require some trial and error before it works. [emphasis added - not quite the slam dunk previously claimed, eh?]

Other commenters attempted balance, but then went on to explain why they thought that bureaucrats ought to aggressively advocate for their own departments and agendas.

One says,

I do agree that NASA's charter does include regulatory aspects that would dictate CO2 emissions. However, the Administrator's comments were a classic example of "passive agressive" leadership. In denial that global warming is a serious issue, Griffin grudgingly agrees to carry out research without any real enthusiasm. Imagine instead if he actually welcomed the challenge of grappling with climate change as a motivating force for his agency, and a national priority... what a difference that would be!

Have they ever thought about the consequences of having dozens or hundreds of aggressively defended government agencies? No, I suppose that they want just the programs they want to be expanded while all the agencies of which they disapprove to passively accept defunding and failure. Unfortunately, the other side of the aisle sees things the other way 'round.

Even the normally reserved Prometheus blog reacted with incredulity and the implication that we must give weight only to the bad things that might happen should the climate get warmer.

[Aside: The Mises Institute posting mentioned in the comments on that is mostly tedious. I didn't find myself enthusiastically interested in the comments of either side.]

And what about the other counter-argument to Griffin, that he is a shill? While this is an obvious ad hominem, I agree that it is a concern, but not for the intended reasons. Prometheus author Kevin Vranes wishes that Steve Inskeep had asked follow-up questions:

The next question could have been: 'were you picked for this job because of this opinion? Before offering you the post did Bush Administration officials give you a litmus test that included your views on climate change?'

Well, duh, big red truck! But stand by for the lack of such curiosity when the next president applies the opposite litmus test. We'd all like to believe that the President, Congress, and Civil Service picks the best qualified scientists, but the reality is that the most politically adept scientists will succeed no matter who occupies the White House. They may be scientifically qualified as a matter of course or accident (Mr. Griffin, for example), but they will assuredly be politically adept. This should be a matter of concern for anyone who fears a police-state. Unfortunately, we have too many people who want a police state and fear only the other party getting their hands on it.

A lot of ink and electrons are being spilled on the observation that such reactions indicate near-religious fervor on the part of AGW believers. While there are a few, and despite the tongue-in-cheek title, I don't think that corresponds to the majority of us (yeah, us). I am more concerned about the people who believe firmly in the power of the state to solve problems and whose catechism changed from Socialism to Environmentalism as the former Soviet states collapsed. I maintain that they are too willing to accept uncritically anything that supports that doctrine, whether it be physical, social, or political science. I am also afraid that they are willing to scrap any checks on government agencies to achieve those goals. Then, when the other side gets the reins (or is it reigns?), they are surprised by the abuse of that power.

Oh, no, time for me to get out my tinfoil hat? I don't think so. The AGW true believers are willing to shove aside anything that looks like a restraint on NASA or any agency willing to accept their version of the future and their idea of the appropriate discount rate. That means control of just a few small issues, like economic production, distribution, transportation, energy, space, farming, and population. Does that seem ambitious? Have I left anything out?

Hirschmans Selective Memory

Now that I think about it (and I haven't actually read the book, just a Hirschman essay and multiple reviews of it, so I preface this with caveat), Hirschman's arguments against reaction seems to suffer from a bias. He selects only those progressive programs which succeeded: civil rights (the negative rights embodied in the Bill of Rights), political rights (universal suffrage), and economic rights (positive rights). That's convenient since you could say that since they exist, they must represent the people's will.

But what about those rights that were repudiated? The first that comes to mind is the right to live in a temperate society, another set of rights asserted in the Progressive Era. One can only imagine that the perversity, futility, and jeopardy arguments were deployed against it and ignored. Fast forward to today when the same arguments are brought out against the War on (some people who use some kinds of) Drugs. In the earlier case, the reactionaries would have been correct, while in the ongoing case, the reactionaries progressives *civil* libertarians are correct and probably in the majority. Yet, it goes on.

Hirschman therefore succumbs to survivorship bias in selecting the movements he did. What other great attempts can we think of that demonstrated the correctness of the reactionaries?

Aaron Haspel has a great take on Hirschman's theses at the God of the Machine blog.

Airplane drinks

Although I never order it anywhere else, I almost always order Ginger Ale when I fly. I try to justify it on the basis that I once heard that ginger is a natural cure for motion sickness ... but I have never had a problem with motion sickness.

Upon asking around, I found out that other people also have "airplane drinks". My wife's is tomato juice (and she normally drinks something that other people only drink on airplanes!). What's yours?

Running on glue and tar

My wife and I have been discussing where the world is going to go in the post-Peak Oil era. I for one am optimistic, but concerned about the transitional period. I think that we (humanity) will develop a variety of responses to the problem(s), and that we will be better off in the end, but I am concerned about the rate at which the transition will occur. There may be upheaval and pain in the interim, regardless of who is in the White House or what policies we follow to get there.

In the comments on Matthew Yglesias recent post on gouging, we see a response to higher fuel prices that I think is indicative of lazy, uncreative thinking. Simply keep piling on one supposed remedy after another. This is creative thinking in much the same way that fixing your mistakes after rushing through a job is productive work. (for my previous thoughts on gouging, see here, here, and here).

Some things seem to escape the attention of people who think like this. For example, the crimes committed by a gas station owner can be determined by looking at his prices compared to his competitors' as follows:

• higher: gouging
• lower: predatory intent
• equal: collusion

In this environment, it might be worthwhile to keep a lawyer on staff, nicht war? And since the laws are subject to change, a lobbyist might be useful. If everyone has to have lawyers and lobbyists, that creates a competitive advantage for larger businesses. I think I can assume that people who are against gouging are also against large businesses, so why don't they understand or acknowledge these problems?

---------------------------------

Then, I was reading about heterodoxy, Cowen, and Veblen, looked up Veblen, got side-tracked by Giffen Goods, and finally came across an essay in The Nation by Sasha Abramsky entitled, "Running on Fumes". He raises the idea that gasoline is a Giffen Good, one that poorer people will come to spend more on even as its price rises because they are locked into it.

Sasha says,

Indeed, the very fact that some commentators, such as the Cato Institute's Jerry Taylor, so glibly assume (or, at least, assumed pre-Katrina) that an oil price shock can be painlessly absorbed shows just how invisible the country's poor have become to much of its pundit class.

Since Taylor's offending comments are neither quoted nor referenced, I can only guess that Taylor said something like, "let the price mechanism work" in response to calls for price controls. The month prior to Abramsky's piece, Taylor wrote about fuel prices in NRO. I would recommend reading both before proceeding with the rest of this post.

Back?

It is of course debatable whether the price mechanism will work well with regards to energy. In the comments on James Hamilton's Peak Oil in America post, Stuart Staniford claims that recent empirical research indicates a short-term price elasticity of -0.05. An older survey indicates that the long term price elasticity is around -0.8 and the short term is around -0.2. In any case, this is for a general population, not the poor, so it is only indirectly relevant to the point. If these two articles can be taken as accurate, the indicated decrease in elasticity (magnitude) indicates that it will be harder to curtail gasoline use as price goes up than it was in 1979-1983; I would assume that it would be harder for the driving poor, but perhaps not so much for the urban poor who have access to other options. (I graph oil use vs. oil price here, but have not updated it since October 2005. Note how much reduction was achieved 1979-1983.)

Near his conclusion, Mr. Abramsky claims that the decline of the rural area about which he is writing is preventable, but

prevention involves the sort of innovation the Bush Administration, besotted as it is with laissez-faire triumphalism (not to mention oil-industry campaign cash), has been reluctant to embrace.

Did you just experience a self-administered lacto-nasal enema upon reading -- in a single sentence -- that the Bush Administration favors laissez-faire policies and that laissez-faire and oil-industry campaign cash are not mutually exclusive?

Indeed, this seems to be common in discussions of gouging, Peak Oil, current pricing, and related issues. Are Mr. Abramsky and the commenters on Matthew Yglesias' blog really claiming that the oil industry enjoys laissez-faire trade policy? That seems so absurd on its face that I cannot believe it needs rebuttal.

The oil industry came of age in the Progressive Era. Oil production had steadily increased and prices decreased for the entire history of the industry through the antitrust prosecution of Standard Oil. As the automobile caught on and demand heated up, Progressives were excited to be able to subsidize a competitor to railroads. Then, as the US got involved in World War I, businessmen eager to be freed from antitrust regulation jumped at the invitation to participate in the Commodities Section of the Petroleum War Services Committee and the Oil Division of the United States Fuel Administration. Dominick Armentano points out in Antitrust and Monopoly, that A. C. Bedford, president of Standard Oil of New Jersey, was appointed as chairman of the War Services Committee. Their experience of cooperation and "supervised competition", and the concurrent worldwide embrace of central planning (think about what was happening in Russia, Germany, Italy, and even England in the period between wars), paved the way to the corporative-creating National Industrial Recovery Act. When that was struck down, the Connally Hot Oil Act of 1935 was passed without hearings to maintain stability in the oil industry. It allocated state production quotas and provided a means to enforce restrictions on interstate transshipment in excess of those quotas.

The military has been tied in to oil production or at least the Middle East arguably since Eisenhower placed troops in Lebanon in 1958 and Kennedy defended Saudi interests in 1963. More recently, in 1980 Jimmy Carter announced the Carter Doctrine, stating that the US would defend its oil interests there. You have the obvious Bush wars since then, with Clinton lobbing a few bombs and establishing bases in Saudi Arabia in between.

In addition to regulatory and military support, we also have regulatory intervention and distortion. As James Hamilton has pointed out, one reason for the increase in gas prices during the tight markets in 2005 was the fact that the national market is segmented by EPA requirements and refineries cannot easily switch between the various boutique fuels favored by - you guessed it - Mr. Abramsky's fellow travelers. Finally, we have people who insist that we need to increase gas taxes so that we, like Eurotopia, will have gasoline prices near $10 per gallon.

Any guesses as to whether The Nation favors those higher fuel prices? I searched for "carbon tax" on their site and got 78 hits; the first one says, "A carbon tax would be simple --" The author goes on to add that

And as Charles Komanoff of the Carbon Tax Center argues, at least part of the proceeds of the tax could be rebated to poor and middle-income households through the income tax system, neutralizing any inequities. The unrebated balance could be used to subsidize alternative energy research and production. Given the historical successes of government funding of basic research in computing and medicine, there's every reason to believe the products of this work would be very promising.

Another two-fer: not only do we learn that the simple tax now has lots of other little simple ancillaries, like using the simple income tax system to rebate for gas, but we also discover that the government's funding of basic research has a proven track record. They don't explain exactly how we figure out the difference in rebates between subway-riding New Yorkers and rural Californians, so perhaps it is not as simple as they first insist. Nor do they actually compare the government's track record in conducting research to anything else, like privately funded applied research. Now, I think it's possible that government gives the private sector a good run in basic research, but recall that the human genome was first decoded by a private company in 1/10 the time and budget as that proposed by a government agency. But the private sector is much better at applied research, which is what was meant by "subsidize alternative energy research and production." So they call for applied research based on the government's track record in basic research? Nice sleight of hand.

--------------------------------------

A greater protest must be registered over Mr. Abramsky's nearly complete silence on the century of other Progressive policies that have pushed the poor out of town and into the oil-based lifestyle. Once again, we can refer to Gabriel Kolko's Railroads and Regulation and The Triumph of Conservatism for an understanding of the politics underlying regulation in the Progressive Era. The tongue-in-cheek, short version is that competition was largely working for everyone except the capitalists themselves. Competition was forcing costs down so far that they were all headed for bankruptcy, so they tried cooperative arrangements. When those failed, they turned to the federal government to act as the cartelizing agent. Though Kolko doesn't specifically address it, it is easy to see that the electric power industry faced the same logic of high capital costs, low marginal production costs, and the resulting expansion, competition, system building, bankruptcy, and "need" for regulatory intervention. This eliminated the "destructive competition" in rails & utilities by constraining competition and innovation. The whole point of regulatory oversight was not consumer protection, as the unsophisticated, narcissistic state-worshipper would have you think, but rather stabilization for the industries so they could go back to peace, quiet, and regular dividends. That is why deregulation and people like Craig McCaw and Michael Milken were so upsetting to AT&T in the 1970s and 1980s, and why electric utilities are so resistant to deregulation today.

The same public who first wanted to give land grants and rights of way to railroads and canals in order to get rid of private turnpikes, and then wanted to constrain railroads because the average voter didn't understand the logic of the capital-intensive industry they had spawned, and now didn't like the fact that their regulations created a de jure cartel, wanted roads. They joined the Good Roads movement and fought for public subsidies for bicycles and then cars. When Louis Brandeis brought Harrington Emerson to the stand in the 1910 Eastern Freight Rate Cases to argue that every industry could be rationalized with and every consumer benefited by Taylor's Scientific Management, the public caught the bug for the Efficiency Movement and Technocracy Movement. They wanted to centrally manage everything. The goal was, as Herbert Croly put it, to produce "Jeffersonian ends with Hamiltonian means".

As outlined above, the Progressives in WWI and FDR's cabinet in the Depression and WWII supported a state-industrial oil policy to further rationalize oil production and distribution. In conjunction with the Good Roads and subsidization of the automobile (which gave rise to the Golden Age of manufacture and its corresponding anomie and unionism which many Progressives yearn for), the stage was set for moving out of high density urban areas and to the suburbs.

The push to suburbia has also been helped over the years with some uniquely Progressive policies. Rent control in New York City, for example (I once read that poverty-stricken Walter Cronkite lives in a rent-controlled building). The aforementioned utility subsidization, including the TVA and REA, which replaced farmer-owned windmills with investor-owner utilities. More recently, to "preserve their character" (a euphemism for "preserve their property values"), many cities (bastions of Right Wingerdom, like San Francisco) have banned urban development, forcing people out of town to find affordable housing. To pay for a wide variety of programs, some of which used to be privately provided by the working classes for themselves, cities have raised property and sales taxes (Santa Fe, for example: there's a reason you need to make $10/hour to live there, and it mostly has to do with California millionaires moving into the City Different; most of them are not exactly Goldwater Republicans). While the upper and middle classes were leaving the city to live in clean, quiet neighborhoods, these policies were all pushing the poor even further out of town.

In the specific case Mr. Abramsky addresses in his essay, the size of those towns probably needs to be smaller. They were dependent on mineral extraction and timber, both repeatedly attacked by people like Mr. Abramsky, but probably not by Jerry Taylor. Indeed, it's probably a safe bet that when people like Jerry Taylor raised the issue about the impact of stopping resource extraction on the workers, people like Mr. Abramsky glibly dismissed it, saying that the economy could easily absorb the jobs lost. But I will go further than either of them and point out something both should agree to (if they want to be logically consistent with their probable core values): continuing to live in a non-agricultural rural area is inherently energy intensive, and we should not continue to subsidize it if we really think Peak Oil is a concern.

I recently came across a site (probably something on Gristmill dealing with global warming) that claimed all of the skeptics of (Kyoto?) never provide any suggested solutions of their own. Does Mr. Abramsky offer a suggested solution for the poor people he exploits for his article? He offers a vague mention of mass transit, a system that works well in high density areas like Europe and the Northeast Corridor, but probably not in Northern California. He seems to imply that George Bush is personally responsible for the lack of mass transit despite the fact that ridership is higher than it was under Clinton.

Abramsky makes a quick offer to help them pay for oil, thus furthering the addiction that has them in this situation in the first place, and contributing to a 150 year legacy of trapping people in a state-underwritten prison. The latest insult in that legacy has been the ethanol subsidy, a Carter-era program with bipartisan support for all the wrong reasons: it reduces imports, it supports "family farmers", and it is "renewable". First used to replace lead (Pb) and reduce pollution, it actually increases certain types of pollution. The subsidies for "family" corn farmers mostly end up in the pockets of ADM. And the renewability, touted by Progressives, is having growing implications for poor people. As I noted in my review of Joshua Tickell's From the Fryer to the Fuel Tank, "Some bio-cheerleaders ... claim that a large scale shift to biofuels won't affect food prices, but that is almost certainly wrong. The amount of land required to make a dent into our petro-fuel usage would easily require both the fallow fields and some land currently used for food production. Demand up, price up, QED." Given recent headlines, I'm going to claim prescience, but I think every clear-headed person could figure this out on their own. Even Noam Chomsky figured it out in hindsight.

Finally, Abramsky also mentions the possibility of subsidizing efficient vehicles, something that has been going on for several years with mixed results*. In other words, we get some paeans to Progressive programs and a demonstration of how much good Mr. Abramsky can do with other people's money to prove that he cares. Some of his explanations are wrong, some suggested solutions are demonstrable failures, and one at least will probably make things worse (subsidizing oil? Really?!). At no time does Abramsky recognize or even seem to be aware of the contribution of his intellectual predecessors to the creation of the problems of today's poor. Instead, he turns the tables, claiming that those problems were caused by people like Jerry Taylor and policies like laissez faire and implying that anyone who doesn't accept his vaguely defined solutions is responsible for the misery and possibly death of the poor. "Laissez faire means you don't care."

Now, Mr. Abramsky is correct to question the effect on the poor, but he has come to exactly the wrong conclusion. His essay is nothing but rhetorical sleight of hand intended to impugn Jerry Taylor and anyone who dares suggest that the price mechanism is a better mechanism than any other so far identified to coordinate oil supply with oil demand. Mr. Abramsky is like George Washington's doctors who kept letting his blood, and upon remarking how sick he appeared -- probably the result of too much blood letting -- tried more blood letting.

Note that I did not say the price mechanism is the best means. Again, thinking negatively (what is that? perhaps not what you think), there may be a solution of which I have not heard yet, but until then the price mechanism is the least worst solution. Price controls are predicted by theory to create shortages, and the theory is confirmed by empirical data. A shorthand way of explaining this is the gas lines in the 70s and in Baghdad today. Surely, if the poor need gasoline, then some at high prices is better than none at any price? Ridiculing the least worst answer, or insulting the person who acknowledges it, is like accusing your doctor of murder for informing you that you will inevitably die.

Furthermore, Mr. Abramsky never seriously looks at the total effect of the price mechanism. It not only curtails demand, but it stimulates supply. Note the implications of this chart in The Economist, from the article "Venture Capitals". Furthermore, note an idea from this episode of Nova: "If you look at companies, like SunEdison, who are helping retailers put up solar panels on their roofs, you're suddenly seeing a linkage of the capital markets -- which have traditionally been very reluctant to get into solar energy -- with the retail sector. That's how you do things in America. You link the technology to the capital, and that's where the rubber hits the road." In America, the capital markets respond to a problem, while in other countries, the politicians respond. The former have to spend their own or their clients' money and are held accountable, the latter not so much.

"So what", you might say, "I don't care who produces the solution, so long as there is one. And so long as it benefits the least well off."

Well, here's so what. I'm vaguely familiar with the theory of functionalism. It says that institutions exist because a society needs them; institutions serve a purpose, a function. When I first heard of it, I immediately thought that it seems circular and lacks a mechanism to describe change; this appears to be an ongoing criticism of the theory. In any case, proponents of this theory use it to justify the existence of government agencies: obviously we must need them if they exist. If you evil bastard libertarians abolish some of those agencies, people will suffer.

That is true as far as it goes. It doesn't go far enough, though. There are two problems with it.

First, I have always believed that there are two problems faced by people who desire change: one is describing a desirable and reasonably realistic future. That is what I like about Kirkpatrick Sale. The second is to describe the path, how to get from here to there. The problem with simply saying "abolish such-and-such program" is that it doesn't describe what we reasonably expect to replace the functionality of that program or how the private institution that replaces the program will spontaneously evolve. For one thing, we don't know what it will look like or how it will evolve: if we did, we'd be in favor of planning. For another, "spontaneous" does not mean "instantaneous", and "evolve" does not mean "appear out of thin air".** So they are right to think that people would suffer if all we were saying is "abolish such-and-such", but we aren't: we are saying, "abolish such-and-such and allow some time for a better solution to evolve." Clearly, though, we need to do a better job of understanding and then explaining how institutions evolve.

The second problem with the functionalist-statist analysis is that it is usually based on an ignorance of history. Remember, if the existence of an institution implies a need for it, what answered that need before the government agency? This is a problem with the change mechanism in functionalism - if the agency sprung from nothingness, either the need must not have existed before, or the agency didn't spring from nothingness. So how does functionalism account for how or why would such a change occur? No answer seems to be forthcoming (but I admittedly have only a kindergartener's view of functionalism). In many cases, though, the solution to the riddle is that a private institution answered the need until it was co-opted by the government. As David Beito has documented, that was the case with much social insurance. The victor (the government) also gets to write the history and teach it in the schools it owns, so few people know about institutional arrangements that probably haven't existed for generations.

Let me bring this full circle.

Sasha Abramsky and others are claiming that laissez faire is not the answer to the problems posed by high gasoline prices for poor people, they are claiming it is the problem. I'm going to consider this patently false until someone can successfully convince me that oil policy is and has been laissez faire. Even stipulating to that claim, though, their recommended solutions of subsidizing the addiction would only prolong the problem and -- given that agencies rarely die once created -- would make the problem worse if oil prices should fall. They are refusing to face the possible fact that this area of California, like the Corps of Engineers' New Orleans, should not be as heavily populated as they were in the cheap-energy past. However, had laissez faire actually been practiced instead of the heady policy brew we have endured for the past 100+ years - regulating railroads and utilities, protecting them against innovators, encouraging suburban expansion, promoting efficiency in energy production at the expense of efficiency in distribution, reliability, and end use, then perhaps the poor people described in Mr. Abramsky's story wouldn't be locked into the lifestyle they are. People like Mr. Abramsky spent taxpayer money on the system that got them into this mess, now he has 100 ideas on how to spend more to keep them in the manner they have come to expect: poor, dependent, and hopeless. Ecologists refer to this approach of endlessly proposing the same solutions to the unintended consequences caused by an earlier round of similar interventions as "parachuting cats."

Given the power to enact their vision, they would systematically destroy every last vestige of spontaneous, private order in an effort to build community values. But such governments have a tendency to collapse of their own weight. When they do, the survivors look around and note that the community was kept together only by the fear of the increasingly necessary police state. There is no community spirit in such a place. Look at what the inhabitants of Russia have been enduring after the collapse of their system. Listen to this article on NPR about the lack of community values in Albania. No, really, listen to it. Generations of socialist theory have wiped out everything they knew about civil society. In America, de Tocqueville marveled at the Association phenomena; in Russia, people wished for their neighbors' barns to burn down.

That is why I prefer private to public institutions. I don't believe in market "magic"; too often have I been a disappointed consumer. Private solutions may not be perfect, but neither are state institutions. Too often have I also stood in DMV lines.

Cooperatives and associations are more democratic than an agency run by career bureaucrats. Furthermore, even Hirschman now acknowledges that Voice works only when Exit is a viable option. As a result, on average, private institutions are flexible and responsive and will evolve; public agencies are rigid and arrogant and will stagnate.***

Nobody resents an association they neither belong to nor pay for, even when that institution stands for something they loathe, but everyone hates paying for those parts of the government they oppose (agriculture? military?). Those who oppose democracy distrust private organizations and vote to suppress them (think Red Scare, Alien and Sedition, Palmer Raids, Radio Caracas Television). Those who genuflect to democracy cannot understand why people would vote for what they would call "undemocratic" programs and politicians. To comfort themselves, they develop theories of conspiracy, brainwashing & propaganda, or false class consciousness. They then begin to support politicians who promise to thwart those poor demented creatures, the opposition; in the end, the democrats line up to vote for the fascists, who proceed to replace private institutions with state institutions. The democrats are surprised when the anti-democrats take control of the machine and use it in surprising ways, perhaps even contrary to its original intent.

A public policy and agency require no imagination or creativity; simply - and I mean simply - propose a blunt mechanism for addressing whatever problem vexes you, then either declare victory or ask for more money and authority. The clever politician does both at once. Opponents can always be demonized as unpatriotic, asocial, and dangerous. A private institution requires work, creativity, conviction, persuasion, and innovation. It promotes civic values. Think Wikipedia, an institution created by libertarians (yes, Virginia, Jimbo Wales is one of those people). That is why I think that government is the intellectually lazy man's solution, and why it endangers the poor man whom he seeks to save.



* Yes, the Prius is great, but I get 46+ mpg with my non-hybrid. Somehow, the powers that be decided that hybrid was better than diesel, even though diesel fuel can be made easily from waste oil and renewable oil. I would argue that this is rather short-sighted, but not atypical. Also, several years ago I remember reading about the skyrocketing price of Suburbans in Arizona due to a shortage of them; apparently, the state was subsidizing a version with an alternative fuel modification (LNG or propane), but you could still run it on gasoline, so people were driving in from out of state and taking ownership of a friggin' Suburban at taxpayer expense for the purpose of saving gas. Personally, I think that if there is a role for the government here, it is to fund an E-prize as Lovins et al describe in The Oil Endgame. Remember, however, that the E-prize is named after the Ansari X-prize, a privately funded prize that has been moderately successful.

** In case you think I'm exaggerating about the strawmen used by anti-libertarians, look at what this says about libertarianism: "Libertarians believe (like Marxists believed back when there actually were Marxists) that if the government just shriveled away, a paradise would naturally spring into existence." Spring? It took hundreds of years to kill some institutions that themselves had to evolve over hundreds of years; only a fool would think they could be replaced overnight. Similarly, only a fool would think that "stroke of the pen, law of the land" equates to "problem solved". They are generally surprised to find out about "unintended consequences". Other than that, Midas' claim that things claimed by libertarians have never existed exposes the breathtaking ignorance of actual history usually found in people who read only popular history books. He could try starting with Homage to Catalonia or The Machinery of Freedom and work his way up from there.

*** Size is also important: I will take a small, decentralized public institution to a large corporation. Centralization and the distance between the top of the hierarchy and the end users or customers are also factors.

Hetero? Ortho?

Would I be far off base to suspect that the correlation between heterodox economists and orthodox climate change enthusiasts is very, very strong? I mean, let's compare this comment to the reactions to this comment. Suppose Max Sawicky, the TPM Cafe family, or any of the others are going to say, "and we consistently insist that AGW skeptics be treated the same way we want to be"? Conversely, will the neoclassicals embrace AGW ... oh, sorry, some of them seem to be.

One side seems to be very dogmatic, and it appears to be the people constantly leveling the dogma charge.