One Person’s Oil Addict is Another’s Intelligent Consumer
In the last few weeks, rhetoric about America’s oil addiction has resurfaced, years after being pushed by former President George W. Bush. It is meant to explain the inability of Americans to become energy independent or at least to significantly reduce consumption. The implication is that consumers are either foolish or brainwashed, and that the government is a slave to the oil industry’s lobby.
I submit that this claim reveals an ideological bias, as well as a degree of energy illiteracy.
Such illiteracy is not new and is often battled by economists. For example, when I was at MIT, one class was taught by an engineer who believed that oil was underpriced because it cost less than mineral water. I didn’t have the heart to tell him that this is a common misconception: the prices of the two are completely unrelated.
Now there is a new litmus test for energy illiteracy, namely the claim that America is ‘addicted to oil.’ Those stating this are either being less than honest (politicians and special interests) or have failed to comprehend either addiction or economics. For example, why say Americans are addicted to oil, but not food, housing and clothing? Or cement or steel? It is easy to compare the traditional types of addiction with the reliance on these substances to see where oil falls on the spectrum.
What is ‘Addiction’?
Addictive substances typically cause changes in brain behavior, create a sense of euphoria but also reduce productive activity, making citizens less capable and/or less interested in being productive. They serve primarily to stimulate pleasure and often distort mental processes, creating biochemical dependencies to the point where those consuming the substances sacrifice their careers, livelihoods, families and everything they hold dear to acquire it on a continual basis. While there are many functioning addicts, there are also huge numbers whose lives have been ruined by their addictions. (Just watch “Behind the Music” on VH1.)
Steel, on the other hand, is an input for other products, such as machinery and buildings, which are useful and valuable. No direct pleasure is provided, though many are enamored of structures and machinery (I like trains myself), and people buy it or not as needed and depending on prices. No one drives into a bad neighborhood late at night to use their last dollar buy steel from strangers. Yet, it seems that we cannot do without it, and import whatever we cannot produce ourselves.
So, on the spectrum of goods—psychoactive substances to economic inputs, heroin to steel—where does petroleum fall? Do we see homeless citizens begging for coins on street corners to fill their SUVs? Lying to their families about their purchase of premium gasoline? Losing their jobs because they can’t give up ‘the juice’?
On the contrary, petroleum is used to transport goods and services, and to move people to work so that they can be economically productive. It also provides mobility, increasing the freedom of the citizenry significantly over the days of horses and steam railroads, thereby improving their quality of life.
Many use the charge of addiction to explain consumers’ failure to behave as “experts” believe they should; witness, for example, James Howard Kunstler’s hatred of suburbia and its many aspects, which he blames on cheap oil. His distain for individual preferences is obvious, and one can imagine him leading a 21st Century Khmer-Rouge-in-reverse, forcing the peasants back to the cities.
Electric Cars Are No AA Program
Similarly, the devotees of electric cars—most of whom are unwilling to pay for them without massive taxpayer assistance—seem to feel that gasoline engines were forced on consumers by car makers or “Big Oil.” Daniel Weiss has gone so far as to say: “one of the reasons why electric cars were abandoned 100 years ago is because the auto companies made a deal with the oil companies and decided to go ahead and pursue that, rather than do batteries.” It means nothing that, even after a century of development, batteries still cannot compete with the internal combustion engine in economics, range, power, or performance.
The electric car is in fact a Potemkin village on wheels—a high-tech façade that disguises the heavy, dirty industry behind it, both in the manufacture of the vehicles and batteries and the electricity generated to power them. Given that only the rich will be able to afford them (expensive toys for rich boys), even with substantial tax breaks, the expenditure of government money ($200 million a year in California) to subsidize them is nearly criminal in this time of constrained budget resources.
Foreign Policy Rationale
Of course, many also decry oil imports as causing us to pursue an immoral foreign policy, specifically importing oil from disreputable characters or (it is claimed) invading Iraq to secure access to their oil. Our reliance on imports, the implication runs, makes us vulnerable to political pressure from oil exporters and drives us into foolish wars. But again, this reflects more an ideological bias than our actual foreign policy history.
Yes, petroleum is sometimes an issue, but it hardly seems to have an overriding influence. Recall Nixon’s staunch support of Israel during the 1973 October War (and oil embargo) and the fact that George W. Bush, a Texas oil man with family ties to the Saudi royal family, embraced Ariel Sharon. Note also American antipathy for Hugo Chavez, even though his country provides us with 10% of our oil imports.
Alternatively, some analysts argue that the importing more than half of our oil is economically damaging, ignoring the fact that trade is not a zero sum game. Indeed, oil importers have traditionally outperformed oil exporters economically, partly because they rely on cheap raw material (such as oil) to create manufactured goods. S. Korea has hardly suffered from relying on oil imports to fuel its economy, nor has Japan, while the countries that rely heavily on oil exports have often failed to prosper. Should we bemoan the fact that we import cheap oil rather than rely on expensive substitutes, or that we produce manufactured goods instead of raw materials?
The Oil Lobby Canard
Both Barack Obama and Daniel Schorr have blamed our lack of an energy policy on lobbyists from the oil industry, a rationalization similar to claiming consumers buy products not because they want them but as a result of advertisers brainwashing them That is, it presumes that “my choice is objective,”and that anyone making a different choice must be brainwashed, rather than simply exercising their own personal preferences.
No doubt the oil lobby has power, but ask what they have achieved in, say, the last decade? Did they get the government, under President Bush, to open offshore areas or ANWR for drilling? Even with Republican governors like Jeb Bush and Arnold Schwarzenegger in power in Florida and California, they did not succeed.
What, then, can we conclude about our ‘addiction’ to oil? It is a totally fallacious concept, promoted by those who have an inherent bias against oil and the oil industry and are seeking to explain the failure of the American public to choose to pay extremely high electricity prices and buy expensive cars incapable of traveling one hundred miles on a single, multi-hour, charge. The truth is that American consumers have ample choices and have chosen wisely.