The voters have spoken, and so has Al Gore. It seems that the United States has no choice but to outlaw the burning of all coal and pretty much lay a chain saw to most of the energy industries and embrace something akin to the Great Leap Forward. In calling for "sustainable capitalism," Gore and his business partner David Blood write in the Wall Street Journal:
At this moment, we are faced with the convergence of three interrelated crises: economic recession, energy insecurity and the overarching climate crisis. Solving any one of these challenges requires addressing all three.
For example, by challenging America to generate 100% carbon-free electricity within 10 years — with the building of a 21st century Unified National Smart Grid, and the electrification of our automobile fleet — we can encourage investment in our economy, secure domestic energy supplies, and create millions of jobs across the country.
We also need to internalize externalities — starting with a price on carbon. The longer we delay the internalization of this obviously material cost, the greater risk the economy faces from investing in high carbon content, “sub-prime” assets. Such investments ignore the reality of the climate crisis and its consequences for business. And as Jonathan Lash, president of the World Resources Institute recently said: “Nature does not do bailouts.”
Yes, you saw it first on the pages of the Journal: more than a decade after "re-inventing government," Gore now turns to the task of "re-inventing capitalism," and since he has won the Nobel Peace Prize, that is proof that he is up to the job. He might even be able to hire Paul Krugman, although he might be busy, since the new Obama government might want to hire him away from Princeton.
In his "re-invention" of capitalism, Gore reaches back to the socialistic arguments made years ago by Barry Commoner, who claimed that capitalism had not collapsed under its self-contradictions because those dastardly capitalists had managed to degrade the environment and keep capitalism alive until the environment struck back and the whole thing came apart. However, Gore argues that global warming is such a serious threat that we no longer can ignore the consequences, which is why we need his 10-year plan, which is not based on good economics, but rather on the fallacies exposed in Frdric Bastiat’s “Broken Window Fallacy.” (Gore speaks of the “millions of new jobs” to be created with this scheme, but fails to mention the tens of millions of jobs and opportunities that will be lost if his ideas are put into law.)
It always is interesting to me that people who believe the state can engage in successful widespread economic planning always call for plans of five-years (Stalin), 10-years (Gore), or set dates as to when we will have "X" number of gallons of government ethanol made available for use (Congress). In this latest bravado of nonsense, Gore claims that his "plans" can "solve" three "crises" at the same time, which, if possible, would place him in a lofty category. Yes, a 10-year "plan" that will do away with a recession, stabilize the climate, and invigorate the economy by giving it five million "green" jobs, along with plentiful and clean electricity, if only we believe.
Well, Paul Krugman has written many times that the failures of the Bush administration came in large part because Republicans just don’t "believe in government"; that certainly does not seem to be the case with Gore, who (unlike Krugman) actually wishes to engage "private markets" to do his bidding, but under his rules, of course. This is something that not long ago was called fascism, but today Gore calls it "sustainable capitalism," which I suppose is progress.
His first claim is that we must completely do away with all coal-fired electrical generation, not to mention nuclear power and plants that burn natural gas and oil. Given that coal provides almost 50 percent of the fuel that powers domestic electric power, and when one adds nuclear, natural gas, oil, and hydroelectric (which also would be on the Gore hit list), Gore is advocating nothing less than U.S. energy suicide. Gore may blame the burning of fuels for what he claims is man-made global warming, but when it comes to the release of energy, there is nothing better than the stuff found in the ground.
We not only have Gore’s public statements on burning of coal, but also his website, "We can solve the climate crisis," which proclaims:
We can help break our addiction to fossil fuels like coal and oil by switching to renewable energy. In fact, with upgrades to our electricity grid, the United States could meet all of its power needs, with renewable energy and support a significant portion of our transportation needs, too.
Right now, these "renewable" sources account for 3.1 percent of the entire production of electricity in this country. Gore and his allies claim that this is due to an industry conspiracy and short-sightedness, but in reality, it is due to the simple economic law of opportunity cost.
Not only are coal, oil, and other fuels readily found in our country, but they also release huge amounts of energy when burned. For example, politicians are fond of telling us that corn-based ethanol is a "solution" for oil replacement, but in reality, ethanol is inferior in every way to oil. It is a product that none of us would buy on the free market for fuel, so the government forces us to pay for it both in subsidies and by requiring that it be mixed with gasoline. In short, the use of ethanol requires us to use more resources than what it produces as a fuel, which is why it fails on a free market and only can be imposed through coercion.
The same goes for other sources of electrical generation. We hear much ado about "wind power," but there is more rhetoric than real promise. Almost all so-called wind farms fail to produce the electrical output that is promised, and the only reason they exist at all in this country is because of federal subsidies. If agricultural and sports stadium subsidies do not make sense, then the same lessons apply to "alternative" power, too.
Furthermore, many wind farms have to be located in remote locations that often are well away from population centers where most of the generated electricity would be needed, which means that at least some of the generated electricity would be lost in transit, and the relatively small output of wind farms exacerbates that problem.
Then there is the little problem of producing these many windmills and towers. Environmentalists seem to believe that they just appear on ridges and hilltops and in the windy corridors. Resources such as "demon petroleum" must be used to create the polymers that help to compose these products, and then there is the problem of attempting to produce a lot of electricity with a bunch of tiny generators, as opposed to the huge generators which operate at conventional power plants.
Let me give an analogy. Assume that one wishes to build a textile facility that will have the yearly output of 100,000 small hand looms. One can build a factory in which one has modern machinery and hires, perhaps, 1,000 individuals. Or, one can build huge rooms and employ 100,000 people, each working at a separate hand loom making cloth.
The former makes sense, while the latter is laughable. However, Gore is telling us that he can create a modern, "21st Century" grid using technology akin to the hand loom. When one throws in the solar concepts, we see once again that while solar electrical generation might be possible on a small scale, it cannot power anything large. When one adds the fact that he also is demanding that all of us be forced to purchase all-electric cars within a decade, we have to ask ourselves how we can add to the power burdens when simultaneously our government would be making the most cost-effective and efficient electrical generation illegal.
Gore, of course, holds one "trump card," the thing that gave him his Nobel Prize in the first place: the fear of human-created global warming. It has been Gore who has called for violence against companies that compete against Gore’s own funded companies for electricity generation, something that would land anyone else in jail. It is Gore who has called for the silencing of anyone who is publicly critical of his global warming theories, and who wants to criminalize that criticism. (Indeed, prominent scientists who do not believe Gore is correct have been silenced, although none have been jailed — yet.)
For all of the "yes we can" talk we have heard from politicians like president-elect Barack Obama, when one looks at the laws of science and economics, "No, we can’t" is the appropriate answer when someone is demanding that the political classes perform scientific and economic miracles. Neither Obama nor Gore can violate natural law. Obama, as he has announced he will do on his first day in office, can declare carbon dioxide to be a "dangerous pollutant," but his words do not change the fact that C02 is plant food and the attempt to eliminate it is fraught with danger and outright tyranny. They can impose coercion just as Mao attempted to force his ill-fated "Great Leap Forward" on the hapless Chinese people, but they cannot make the thing work.
Gore and Obama, while giving us the picture of being True Believers, know that. However, by creating both a climate of fear and then coming up with "solutions," as bad and unworkable as they are, they can be portrayed as saviors. Franklin Roosevelt’s New Deal was destructive, but it cemented his political power and the recent election of Obama is proof that even today, a Democrat can win high office carrying the mantle of FDR.
In calling for the private markets to be the mechanism for carrying out his grand vision, Gore is advocating that markets which work without coercion and violence become the tool for the government to carry out its program of coercion and (at least implied) violence. That is fascism on a grand scale. Gore may call it "sustainable capitalism," but methinks it is capitalism wearing jack boots and giving stiff-arm salutes, something that never can be compatible with the free market and only can be "sustained" through state violence.
November 7, 2008
William L. Anderson, Ph.D. [send him mail], teaches economics at Frostburg State University in Maryland, and is an adjunct scholar of the Ludwig von Mises Institute. He also is a consultant with American Economic Services.