In business and in government, lesson after lesson has been learned against trusting the ‘smartest guys in the room.’
Remember Enron, where doubters were told by CEO Jeff Skilling that they just didn’t ‘get it’? … the alarmist climate scientists who have long stated that the science is settled…. the Obama Administration energy decision-makers who know which technologies are ‘environmentally sustainable’ and are ‘commercially promising’?
F. A. Hayek warned against the ‘pretense of knowledge” where an intellectual elite via government coercion plans for the rest of us. Economist/educator Russell Roberts (Mercatus Center, George Mason University) explained what Hayek meant in a Wall Street Journal piece, “Is the Dismal Science Really a Science?”
If economics is a science, it is more like biology than physics. Biologists try to understand the relationships in a complex system. That’s hard enough. But they can’t tell you what will happen with any precision to the population of a particular species of frog if rainfall goes up this year in a particular rain forest. They might not even be able to count the number of frogs right now with any exactness.
We have the same problems in economics. The economy is a complex system, our data are imperfect and our models inevitably fail to account for all the interactions.
The bottom line is that we should expect less of economists. Economics is a powerful tool, a lens for organizing one’s thinking about the complexity of the world around us. That should be enough. We should be honest about what we know, what we don’t know and what we may never know. Admitting that publicly is the first step toward respectability.
Compare planner-worship to the wisdom of masses, make up of countless individuals with each having on-the-spot, decentralized knowledge. Enter the talented amateurs in the energy debate, dozens of which blog at MasterResource. 
In my last quarterly report to the readership, I commented on our stable of windpower critics who often live and work near industrial wind parks. “One particular niche at MasterResource has been giving voice to the growing, articulate grassroot opposition to industrial wind parks,” I wrote. “Our category, Grassroots Opposition, Windpower, is full of confessionals where former wind supporters saw the light of economic and environmental reality.”
I mentioned, among others, Eric Bibler (here and here); Jon Boone (here and here); John Droz Jr (here and here); Tom Stacy (here and here); Sherri Lange (here, here, and here); Lisa Linowes; Kent Hawkins; Mary Kay Barton; and so on.
And so it was with delight that I read about our MR contributors John Droz and George Taylor last Friday at Greenwire (sub. req.). Here are excerpts from the article, ‘Determined Gentleman’ Leads Assault by ‘Citizen Renegades’ on Wind Power by Jean Chemnick (June 22, 2012):
John Droz, Jr
Look out, wind industry. John Droz Jr. has you in his sights.
Droz, 66, is no inside-the-Beltway mover and shaker. He lives in the port town of Morehead City, N.C., when he isn’t at his Adirondacks cabin. He prefers sweater vests to pinstripes, and he describes himself as “just a busybody.”
“I’m not part of some industrial complex,” he said during a recent interview. “I’m not working for anybody. I’m just a citizen who lives on a lake in the backwoods.”
But Droz is relentless with research, phone calls and PowerPoint presentations. And he aims high. As the unofficial leader of a loosely organized band of wind industry foes, he hosted in February a Washington, D.C., powwow whose invited guests included representatives of prominent conservative organizations….
The 20-some participants in Droz’s Washington meeting considered but rejected the notion of creating a formal group to counter the American Wind Energy Association for fear it would be too expensive and complicated, he said. They are now shopping for an established think tank to take a coordinating role….
“… environmentalism isn’t about the environment,” he said….
He said he initially supported the wind industry because he thought it might help curb air pollutants that cause acid rain, a major threat to forests in the Northeast.
“I sort of had the perception originally, the best I could recollect, that it was sort of like going to the dentist,” he said of wind energy. “That it wasn’t something that I thought was a fun thing, but I said, ‘OK, if this is what needs to be done, fine. I’ll support it.'”
His views changed, he said, when people he respected suggested he take another look at wind.
“Just Google stuff,” he remembers them advising him. “I mean, nobody has to tell me how to do research.”
“He had some really insightful things that made good sense,” he said. “The more I checked into these things, it was clear that nobody had done any scientific assessment of wind energy,” said Droz, who calls himself “a backwoods scientist.”
“It was just being promoted as something that seemed to be politically attractive to people who have a green perspective.”
His argument against wind subsidies or mandates goes something like this: Renewable energy in general and wind power in particular are a bad investment, because their intermittent nature makes them less reliable and more costly than conventional energy technologies and requires utilities to provide backup from other energy sources.
A 150-megawatt power plant run by wind, for example, would only provide a fraction of its maximum electricity on any given day because the wind doesn’t blow constantly, he said. The need for backup from other fuels, meanwhile, is both an expense and an example of wasted energy, as a gas plant is forced to ramp up from nothing when the wind drops….
Wind technology, he said, is “a lobbyist-driven solution without scientific basis.” He takes the same tack in some of his other freelance advocacy work, including his involvement in efforts to prevent North Carolina from factoring climate change into its projections for sea-level rise, concerning which he wrote a letter published on the website of the News and Observer newspaper.…
Another of Droz’s “citizen renegades” is George Taylor, a Silicon Valley investor with a computer technology background….
State renewable energy standards and financial support for renewable energy have made a robust nuclear renaissance even less likely, he said, by effectively mandating the continued use of fossil fuels.
“The reason that bugs me is when people say, ‘I want this little wind mandate,’ what they’re really saying is, ‘I want a very big gas-wind or coal-wind mandate,'” he said….
Like Droz, Taylor said support for wind appeared to be ideological rather than rational. All technologies deserve to have their performance scrutinized, he said.
“You shouldn’t be hugging a windmill any more than you would hug a nuclear power plant,” he said, adding that he might be inclined to embrace nuclear plants himself, “but I’m a little weird.”
Of wind: “You should be saying, ‘Wait a minute, it’s some gigantic piece of metal.’ And the best wind is in North Dakota. Who lives in North Dakota? I don’t live there.”
The growing grassroot opposition to the fantasy of windpower is a major story. Jean Chemnick of Environmental & Energy News is to be commended for her reporting of Droz and Taylor. Their voices are important both at and outside of MasterResource.
 Tyler Cowen referred to me as an ‘amateur,” which means nonacademic in this sense.
“Edison to Enron … [is] the second part of a three-volume series on the history of American energy, told through the distinction between productive and predatory capitalism. Bradley is a very much underrated economic historian, largely because of his ‘amateur’ status, but there is a remarkable amount of learning in his books.” Cowen, ‘What I’ve Been Reading,’ Marginal Revolution, November 15, 2011.