“The Triumph of Capitalism” (Socialism is Intellectually Dead, but Central Planning in the Mixed Economy Lives On)
“Less than 75 years after it officially began, the contest between capitalism and socialism is over: capitalism has won… Capitalism organizes the material affairs of humankind more satisfactorily than socialism.”
- Robert Heilbroner, “The Triumph of Capitalism,” The New Yorker, January 23, 1989, p. 98.
A major event in the history of political economy thought occurred in 1989 when socialist economics writer Robert Heilbroner (1919–2005) renounced his belief in central planning in the pages of the New Yorker. For anti-market liberals, this made it official: socialism was out of the mainstream. Socialism could not plan a modern economy and was an open sesame for totalitarianism. Hayek said as much in his 1944 classic, The Road to Serfdom. A trusted voice on the Left confirmed it 45 years later.
David Boaz, the Cato Institute’s longtime scholar of liberty, wrote a tribute upon Heilbroner’s death nine years ago in Reason magazine. MasterResource, with permission, reprints Boaz’s essay for its lucidity and its relevance in today’s political economy debates where mainstream views about perilous man-made climate change and the sustainability of “green” energy are in intellectual trouble.
“The Man Who Told the Truth: Robert Heilbroner fessed up to the failure of socialism” Reason, January 21, 2005. [Read more →]
February 7, 2014 3 Comments
“[There is] a general economic maxim: public [government] resources are really private, owned and exploited by a political elite, while private resources are really public, owned and managed by a multitude. Government-owned resources do not ‘belong to all of the people’ and allow ‘self determination;’ they belong to none or a very few.”
- R. Bradley, Foreword to G. Yeatts, Subsurface Wealth: The Struggle for Privatization in Argentina (Foundation for Economic Education, 1997), pp. xv–xvi.
The recent reform of Mexico’s Constitution to allow private investment (up to $20 billion in production-sharing agreements) still leaves state-owned PEMEX with a legal monopoly for oil and gas development inside the country. But it is a start at reform that may turn into a deregulatory, privatization dynamic.
More, indeed, awaits to open the energy sector internal and external competition and to foreign investment in any amounts:
1) Competition to PEMEX in all oil and gas areas should be legalized;
2) PEMEX shares be allocated to the country’s private citizens;
3) Subsoil mineral rights should be assigned–with deed of title–to the (private) surface owners of land. Surface land not privately owned can be privatized with mineral rights attached.
Thus, Mexico’s recent reform can be seen as the first of four steps to fundamental reform so that mineral wealth can benefit the masses, not just a political elite. [Read more →]
February 6, 2014 No Comments
“When the history of the global warming scare comes to be written, a chapter should be devoted to the way the message had to be altered to keep the show on the road. Global warming became climate change so as to be able to take the blame for cold spells and wet seasons as well as hot days. Then, to keep its options open, the movement began to talk about ‘extreme weather’.”
- Matt Ridley, “Nobody Even Calls the Weather Average,” July 9, 2013.
Last fall and so far this winter, the list has grown to include:
- Trillions of dollars of storm-surge flooding
- Bigger snowfalls
- Future Winter Olympics cancellations
- Drying Great Lakes
- Increased severe U.S. thunderstorms
- Less fall coloring
- Devastated ocean fisherman: ‘Sometimes We’ll Catch 5,000 Pounds Of Jellyfish’
- Aggressive hornets
- Christmas Island red crab migration
- Depletion of Caribbean fresh water supply
- Stockholm, Sweden heat deaths
- Worse Lake Erie algae blooms
- More polar bear attacks
- Destroyed Lavender (Haute-Provence)
- Wild pigs rampage
- Snowy Owl invasion
- Threatened Costa Rica banana industry
- Starfish disintegration
- Syrian Uprising; future conflict
- Prospective Texas fish deaths
A cartoon illustrates the hilarity of the ever-expanding, often contradictory list: [Read more →]
February 5, 2014 5 Comments
Upon a Congressional declaration of ”the public interest” and to “promote the general welfare,” the Department of Energy Organization Act of 1977 centralized the federal government’s energy functions. The new agency was premised on five beliefs:
- an imminent exhaustion of oil and gas;
- problematic oil-import dependence;
- the efficacy of central planning;
- the need to commercialize renewable energy; and
DOE’s rationale of market failure and government success has flipped. Today, it is government failure and market success. Oil and gas are more abundant now than 37 years ago; oil imports are decreasing to levels thought impossible just a decade ago; politically correct renewable energy remains uneconomic (note the wind industry’s dogged pursuit of the production tax credit); and mandated conservation has present costs and speculative future benefits (hence the coercion).
The U.S. Department of Energy is a candidate for wholesale abolition in a coming era of policy reform. Of the 18 “Purpose” areas below, most relate to centralized (federal; one agency) direction of energy interventionism. But there are several sections that can be re-purposed to shrink the agency. Section 9 is my favorite:
(9) to promote the interests of consumers through the provision of an adequate and reliable supply of energy at the lowest reasonable cost;
Section 17 can also supply a case for DOE abolition: [Read more →]
February 4, 2014 6 Comments
“Anti-petroleum activists would have us give up on long-distance trade and the food security inherent to the reliance on multiple suppliers based in a wide variety of geographical locations. Far from keeping the third horseman at bay, their carbon dioxide obsession will bring him back with a vengeance.”
Laura Ingalls Wilder’s The Long Winter (1940) is generally regarded as the most historically accurate book of her Little House on the Prairie series. It tells the story of how her family and the other inhabitants of DeSmet, South Dakota—but then the Dakota Territory—narrowly avoided starvation during the severe winter of 1880-81. That year, after a lean harvest, a series of blizzards dumped more than 11 feet of snow and immobilized trains on their tracks, in the process cutting off the settlers from the rest of the United States.
As their meager supplies ran out, a rumor spread that a sizeable amount of wheat had been raised and was available within 20 miles of their snow covered houses. Laura’s future husband, Almanzo Wilder, along with a friend, soon risked their lives and eventually succeeded in bringing back enough food to sustain the townspeople through the rest of the winter. With the spring thaw the railroad service was reestablished, abundant food was delivered and the Ingalls family enjoyed a long-delayed Christmas celebration in May.
To 21st century readers, “The Long Winter” is as a valuable reminder of how common and lethal crop failures and geographical isolation once were before the advent of modern farming and transportation technologies. Indeed, two additional footnotes to this true story are that Almanzo Wilder’s parents had to leave the town of Malone in Upstate New York in 1875 due to crop failures. And secondly, soon after the winter of 1880-81, three years of drought and prairie fires forced most of DeSmet’s settlers to relocate their farms and homesteads. [Read more →]
February 3, 2014 2 Comments
“The determination of the social cost of carbon (SCC) as made by [federal agencies] is discordant with the best scientific literature on the equilibrium climate sensitivity and the fertilization effect of carbon dioxide—two critically important parameters for establishing the net externality of carbon dioxide emissions…. The [federal government] should act not just to revise the current determination of the SCC, but to suspend its use in all federal rulemaking.”
- Patrick Michaels and Chip Knappenberger (Center for the Study of Science, Cato Institute). “Comment on ‘Technical Support Document, Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866’,” January 27, 2014.
Federal legislative attempts to price and regulate carbon dioxide have failed. Cap-and-trade, which passed the House in 2009, died the next year in the Senate. A carbon tax, much discussed, has not gotten the traction to reach a House vote.
However, a back-door energy tax is alive and well in a monetary-damage value assigned to carbon dioxide emissions in regulatory justification. Under federal cost/benefit analysis, for example, an energy efficiency standard can become more onerous by assigning a monetary benefit of reduced CO2 emissions.
The determination of the social cost of carbon by the Interagency Working Group (IWG), detailed in the May 2013 Technical Support Document (updated in November 2013) is worse than highly subjective, thus an arbitrary calculation. It is knowingly improper, inaccurate and misleading. It should be expunged from all federal matters.
January 31, 2014 9 Comments
• Effort to Expand California Green Power Mandate to 51% Fails
• Will California’s Green Energy Policies Fail Like Germany’s?
• Three Cities Oppose Gas Powered Plants to Replace San Onofre Nuke Plant
• Scientist Says No Reason to Shut Down San Onofre Nuclear Power Plant
• California Drought Means Less Hydropower and Higher Electricity Prices
Effort to Expand California Green Power Standard to 51% Fails
“Amendments made yesterday to state Assembly Bill 177 clarify that the 33 percent by 2020 current Renewable Portfolio Standard (RPS) is intended to be a floor, not a ceiling, for energy procurement. It directs all retail sellers of electricity to adopt a long-term procurement strategy to achieve a target of procuring 51 percent of their electricity from renewable resources by Dec. 31, 2030.”
– State Senator V. Manuel Perez of Imperial County
A key provision in State Assembly Bill 177 sponsored by Assemblyman V. Manuel Perez (Democrat, Coachella), to raise California’s green power mandate from 33% to 51% was opposed by the Large Scale Solar Association, the California Wind Association, ratepayer advocates The Utility Reform Network, and had no support whatsoever from any environmental organization. The reaction may have been driven by the appearance that AB 177 had another agenda: creating a green economy in Imperial County where the unemployment rate still hovers around 26%. Imperial County is in the southwestern corner of California. Its most notable landmark is an agricultural irrigation drain that is so big that it is called the Salton Sea. [Read more →]
January 30, 2014 2 Comments
[Last night, President Obama did not deviate from his interventionist, centralist approach to governing America, including with energy policy. This post reverses the mindset to a speech with a free-market, classical-liberal President at the podium.]
“My fellow Americans, I come before you tonight to deliver my sixth State of the Union address at a time of continuing economic disappointment and social uncertainty across our great nation.
“I have spoken to you more than once about the country’s need for ‘hope and change.’ I have tried to begin that process over the first five years of my presidency. But I now realize that I had been looking in the wrong direction for that new and better America.
“Not long ago, while looking under my bed in the White House for the terrorists that the NSA assures me are everywhere and against whom they must surveillance each and every one of you to keep you safe, I found some books that must have been left there by former President Ronald Reagan.
“They included F. A. Hayek’s The Road to Serfdom; Henry Hazlitt’s Economics in One Lesson; Milton Friedman’s Free to Choose; Ayn Rand’s Capitalism: The Unknown Ideal; Julian Simon’s The Ultimate Resource; plus a pamphlet reprint of a chapter from a book by Herbert Spencer called ‘The Right to Ignore the State.’
“For some reason, none of these works were assigned or recommended to me by my ‘progressive’ university professors or socialist mentors. [Read more →]
January 29, 2014 1 Comment
“President Obama wants to use the tax system to ‘spread the wealth’ and apply the regulatory powers of the government to more forcefully manage and direct the economic affairs of the citizenry – all for a particular interpretation of the ‘common good,’ of course.”
- Richard Ebeling, “Barack Obama and the Meaning of Socialism, December 23, 2013.
Barack Obama will give his 5th State of the Union Address tonight amid the crisis of interventionism (what Ludwig von Mises called the exhaustion of the reserve fund). Expect proposals for new federal programs and private-sector strong-arming. And expect another Malthusian call to action on ‘saving the planet.’
The federal debt is soaring. The economy remains mired in the Great Recession according to important indicators. ObamaCare is in deep trouble with more negative shocks ahead. With energy, his ‘all of the above’ policy allows the worst alternatives to get on top.
Yet instead of trying liberty, President Obama works to move America further in the direction of increased government paternalism with health care, a push for a higher minimum wage, more intrusive business regulation, a drive for higher taxes to redistribute wealth, and a persistent insistence that individuals must sacrifice their own interests for that of “society.”
Noting that Obama has advocated or had legislated by Congress or commanded through executive order should have come as a surprise. He was very straightforward about his conception of “change” long before he was even thought of as a contender for the White House.
For example, way back in September of 2001 when he was an Illinois State Senator, in an interview with Chicago public radio station WBEZ, he was asked about the achievements and challenges of the Civil Rights Movement in America. [Read more →]
January 28, 2014 3 Comments
[Ed. note: One of the most prolific citizen activists in the windpower-subsidy debate today is Kevon Martis, Director of the Interstate Informed Citizen’s Coalition. His testimony last week before the Ohio Senate Public Utilities Committee, with slight modification, follows.]
Senator Seitz, Vice Chairman LaRose, Ranking Member Gentile and members of the Ohio Senate Public Utilities Committee, my name is Kevon Martis. I am the volunteer director of the Interstate Informed Citizen’s Coalition, Inc. of Blissfield, MI (IICC), a bipartisan renewable energy citizen’s advocacy group.
In my role as director of IICC, I speak on behalf of the hundreds of Ohio citizens who are living on the front lines of industrial wind development that has directly resulted from the very complicated, highly intrusive mandates of Senate Bill 221 of 2008, which revised
state energy policy to address electric service price regulation, establish alternative energy benchmarks for electric distribution utilities and electric services companies, provide for the use of renewable energy credits, establish energy efficiency standards for electric distribution utilities, require greenhouse gas emission reporting and carbon dioxide control planning for utility-owned generating facilities, authorize energy price risk management contracts, and authorize for natural gas utilities revenue decoupling related to energy conservation and efficiency.
I speak today January 22, 2014, in support of Senate Bill34:
To amend sections 4928.142, 4928.143, 4928.20, 4928.61, 4928.62, 5501.311, and 5727.75 and to repeal sections 4928.64 and 4928.65 of the Revised Code to repeal the requirement that electric distribution utilities and electric services companies provide 25% of their retail power supplies from advanced and renewable energy resources by 2025.
State-level renewable energy mandates like Senate Bill 221 were enacted at a time when natural gas was expensive and projected to climb. With “cap and trade” schemes looming on the federal horizon and non-emitting and fuel price stable nuclear forced to the back bench by green activists, there was apparent wisdom in leading a drive to advanced energy generation.
It is a far different story today. Formerly considered a “no brainer”, one-size-fits-all wind energy mandates are fast falling out of favor across the political spectrum. [Read more →]
January 27, 2014 1 Comment