Me From the Past!

So I was just alerted to the online availability of a brief presentation I gave at FEE's Young Scholars Colloquium last year, and I figured it would be worth posting here. I should note that the presentation was basically a response to not having enough student presentations to fill the time and needing one of the interns to jump in to eat space, so I don't pretend that anything particularly groundbreaking was said.

But without further ado, here's the link. My talk starts at 12:30, and discusses pollution taxes. In it, I make the claim that there are pollution taxes, and I'm not actually sure that's true...can anyone think of an example? That aside, I think it's pretty decent presentation, and I hope you all enjoy it!

My climate change presentation from this year's seminar will hopefully be coming online relatively soon -- and with video! -- so look forward to that...

Interesting Things to Watch

Howdy, y'all. I just figured I should direct your attention to two conversations that have caught my interest recently, and which may be interesting to some of you as well.

Over at the Austro-Athenian Empire blog, Dr. Long has posted a discussion of the proper definition of "socialism," entitled "POOTMOP Redux!" (after an older post, "Pootmop!," in which he discussed private ownership of the means of production -- p.o.o.t.m.o.p.). If you want some background on the post, read Kevin Carson's initial contribution to the discussion, "Socialism: A Perfectly Good Word Rehabilitated," and Stephen Kinsella's response, "The New Libertarianism: Anti-Capitalistic and Socialist." I should point out for the time-starved, however, that Dr. Long's post is probably just fine on its own.

I've posted a fair amount in the comments section of the post, and Neverfox of Instead of a Blog has jumped in as well. Of interest as well may be Dr. Chartier's thoughtful contribution on the LiberaLaw blog, "Socialism Revisited," as well as Brainpolice's commentary on the Polycentric Order blog, "Anarchist and Socialist Semantics and Historicity (Or, Why Does Stephan Kinsella Act As If Individualist Anarchism Never Existed? Redux)."

---
The other interesting conversation going on at the moment is a new chapter in the debate over state involvement in marriage, this time with a post on the ThinkMarkets blog by Dr. Rizzo, "What Should Be The State’s Role In Marriage?." The time scale for this discussion is a bit longer than that for the previous one. For me, it started with an overconfident post on this blog last year, now-amusingly entitled, "Open and Shut: Should Same-Sex Marriage Be Legal?" In it, I argued that the state should get out of marriage entirely in order to avoid a choice between discrimination and offending religious groups who I took to have some legitimate claim to the institution of "marriage." (That post, incidentally, marked the one and only time that this blog has ever been linked to on The Huffington Post. Go figure.)

A few months later, Dr. Koppl posted his own discussion of the issue over at the ThinkMarkets blog, "Ideas Have Consequences," in which he argued that gay marriage should be legalized. In the comments section of that post, we had what I found to be an incredibly productive conversation in which he convinced me that the religious groups in question really did not have the kind of claim to the institution of marriage that I had attributed to them, and that having a legal understanding of "marriage" was quite valuable. I accordingly posted a follow-up on this blog in which I conceded the argument to Dr. Koppl, entitled, "Roger Koppl Is Right About Gay Marriage."

Dr. Rizzo's point intriguingly takes up the banner for the sort of position I initially defended, arguing that the government ought to get out of defining marriage altogether. In the comments section, I tried to draw attention to the conversation that had already taken place on the blog earlier this year, and eventually Dr. Koppl himself arrived on the scene to defend his position again. Gene Callahan of Crash Landing, the (now willfully abandoned!) Morality Debate, chance meetings at AIER, etc., has also joined in the discussion. This should be good!

I Don't Get the Whole "Peak Oil" Thing...

So here's a fancy story:

There's a commodity that exists in limited supplies on the Earth; let's call it awesomite. Awesomite can currently be harvested and brought to market for $5/oz, and at that price we can satisfy all the demand from people who are willing to pay that much. Eventually, some of the supplies of awesomite run out, and it becomes more difficult to meet the market's demand. We can get more awesomite for $7/oz than we can for $5/oz in this now-somewhat-depleted world, since that price would allow us to buy a sweet line of awesomite-carrying trucks which would help us reach sources of awesomite that simply couldn't be harvested without them. And at this higher price, some people decide to stop using awesomite; we can meet all the remaining demand for awesomite at $7/oz. Eventually, we start to deplete the supplies of awesomite even further, and so it becomes increasingly difficult to meet demand at $7/oz. For $10/oz, though, we can definitely get at some of the hardest to reach sources of awesomite, since we could buy a totally rad array of processing equipment that would enable us to get the valuable commodity out of ore that would otherwise be too impure to use. And at $10/oz, way fewer people want to use awesomite, so we can balance things again.

This entire time, we've known about a substitute for awesomite: spiffium. With current harvesting methods, we can get spiffium for $9/oz, but even at that price we can't produce all that much -- the technology is very limited. When awesomite cost $5/oz, people were only really using spiffium for specialized applications; it simply didn't make sense to use it when you could just use the much cheaper awesomite instead. The same was pretty much true at $7/oz. But when awesomite prices hit $10/oz, the spiffium producers went into high gear. They quickly found that they had maxed out the amount of spiffium they could produce, and suddenly people were willing to pay $10/oz for whatever they could put out. Accordingly, a lot of people started to invest in some excellent new methods to produce spiffium.

See, there was always a whole lot of spiffium that could be harvested, but no one ever really cared to figure out how. Developing any one of those new methods would be expensive and may never turn up anything. And besides, the price of awesomite was just so low; the investment would only have been worthwhile if it produced a radical breakthrough that totally revolutionized spiffium production, and that was a pretty big risk to take. But at $10/oz, things looked a lot better for spiffium producers. As awesomite supplies continued to dwindle, its market price continued to climb and awesomite producers continued to use even more remote and awesomite-poor resources to satisfy the market's demand for their products. But at these high prices, spiffium producers could justify radically expanding their own production and investing in all new methods to get spiffium to the marketplace.

As time went on, the spiffium producers had a series of breakthroughs which fundamentally changed the way that spiffium was produced. They could now get way more spiffium out of the ground than they ever could before with cool new pressurized water harvesting systems and computerized geological data processing programs that spiffium company engineers created once the investment dollars started flowing in. And they could do it at lower and lower prices. Soon the price for spiffium started to drop below the price of awesomite, and now it was only the specialized applications that used awesomite; any application that could use both commodities would be hard-pressed to justify using anything but the much cheaper spiffium.

---
As might be rather obvious, I intended the above story to be an allegory for the growing concern about oil supplies. Oil -- the equivalent of awesomite in our story -- is really cheap right now, and has been for a long time. If you believe some people, it's too cheap! Why? Because at current prices, oil is preventing "needed" investment in alternative sources of energy -- a real-world version of spiffium. And the reason we need to be investing in alternatives is because we're going to run out of oil, and this would be terrible.

But as we saw in the story, when we started running out of awesomite, the price rose and we started using sources of awesomite that would have been uneconomical at lower prices. And eventually, prices rose high enough that it was clearly worthwhile to start investing in alternatives. The price mechanism automatically sent signals to the relevant actors that told them what they should do!

So I really fail to see what is the big deal about "peak oil" and dwindling oil resource supplies. As we start to actually run low on oil, suppliers will be hard pressed to meet market demand with their current resources. Prices will rise, people will cut back, and currently uneconomical oil resources will come into production. When prices rise high enough, alternative fuels will begin to make sense, and we will start to see a transition away from oil in applications where substitutes can be utilized efficiently. It will be just like how people slowly stopped using awesomite and switched to spiffium in our story.

Now, this shouldn't necessarily be taken as an indictment of social funding of alternative energy research; that's an entirely different issue with a whole separate range of considerations. But what I do think this discussion supports is the idea that people should take a few deep breaths and stop getting so worked up about peak oil. It will be okay.

How Climate Change Policy May Cause Economic Disruption

A little while ago, I wrote a post discussing why I didn't think that a tax on emissions of greenhouse gases would result in an overall decrease in buying power spread across the economy. In that post, I focused on how a policy might work out if it were slowly phased in; my intention was to set aside the possibility of certain problems that a climate policy may expect to face in order to focus only on a particular set of concerns about overall buying power in the light of increasing the cost of emissions. In this post, I want to address some of the issues I set aside in that earlier post. Particularly, I wanted to focus on the possibility that by implementing a new climate change policy, we could disrupt the existing economic order in a very significant way, and that this might be expected to produce some very worrisome impacts. (Again, this post will talk about carbon taxes; if the translation to cap-and-trade schemes is confusing, I can explain.)

So here's the deal. As I explained in the previous post, a good carbon tax is built on the idea that we make carbon-emissions-intensive goods more expensive with a tax. The proceeds are used to finance a tax cut elsewhere which has the effect of making non-emissions-intensive goods relatively less expensive by increasing consumers' buying power (stated in terms of nominal dollars). This would tend to have the effect of increasing the demand for non-emissions-intensive goods at pre-tax prices, and lowering demand for emissions-intensive goods at prices reflecting the pre-tax price and the carbon tax.

In the previous post, I discussed an example involving two consumers (Cynthia and Xavier) who were part of an economy including rocks (which do not take carbon emissions to produce) and rubber balls (which do take carbon emissions to produce). Before the tax, both rocks and rubber balls cost $5. After the tax, rubber balls cost $6 and the price of rocks is unchanged. The proceeds of the tax on the rubber balls, I said, was used to finance a tax cut so that the consumers each ended up having more buying power than they would have had otherwise (in dollar terms).

If such a policy were enacted, we would imagine that people would shift their consumption choices in the direction of rocks and away from rubber balls. If we held market prices fixed for the moment, we would expect people to demand more rocks and less rubber balls. This could create an incentive for suppliers to decrease the prices of rubber balls in order to avoid building up excessive inventories, and to increase the prices of rocks in order to avoid creating a shortage. Alternatively, it could create an incentive to decrease the production of rocks and to increase the production of rubber balls. In practice, it would more than likely be a combination of both.

So here's the problem: In our modern economy, there is a lot of capital invested in the production of emissions-intensive goods. In our example economy, we might imagine that many rubber balls are produced using a sophisticated ball-making machine. And it may be that at the new lower demand, some of the companies that invested in these ball-making machines would need to sell them or might even go out of business. The people who made the ball-making machines would see demand for their products drop, and perhaps they would be put out of work. The ripples would move outward.

Of course, on the flip side, the rock producers would experience some seriously good times, at least at first. Once the drop in rubber ball demand put some people out of work and decreased the salaries of others, it's conceivable that the decrease in those individuals' consumption would balance out the increase in demand for rocks created by the carbon tax, or even outweigh it.

It should be clear that the more drastic a tax is imposed, and the more quickly it is implemented, the more significant the impacts on the structure of the economy. In our example, we might imagine that the tax was imposed only with a five year warning. In the scenario, it seems rather likely that the impacts would be substantially less severe. Producers would have time to plan for the tax, and they would be far less likely to make investments that would turn out to be really awful. Or alternatively, we could imagine that the tax was relatively small, and so the shift in demand might be rather small.

But with a quickly implemented or severe tax (or both), it seems rather clear that the impacts would be very noticeable. A number of otherwise sound investments would be converted into misallocations of resources, and these would need to be liquidated. It seems important that we acknowledge this possibility when we think about our climate policy options. Of course, nothing said here shows that we should reject climate taxes; I just think this is a side of the picture that needs to be seen.

Value Subjectivism Isn't A Mistake: A Reply to Callahan

[This post is part of The Morality Debate]

I

In the comments section of a post over at the Crash Landing blog, I drew a parallel between moral nihilism and the subjective theory of value in economics:

It's my contention that the conclusion in question [moral realism] is a very natural one to believe, given the very human propensity to project evaluative attitudes onto objective reality. Accordingly, it's not surprising at all to me that most thinkers throughout history believed it. But it seems to me that this way of thinking is not entirely correct, in much the same way and for much the same reasons as the "realist" theories of value in economics were both ubiquitous, unsurprising, and false. Just like it's not the bread that is valuable, but rather I who values the bread, so I claim that it's not the act that is morally objectionable, but rather I who takes moral exception to the act. It seems to me that morality, as commonly conceived, is built on a framework of attributions of intrinsic value, and that these are literally false. This doesn't mean that the attributions capture nothing true -- surely when we say that money "is" valuable, we are saying something that makes a great deal of sense even though it is literally not true -- but I think it does mean that moral claims are, strictly speaking, false.

Gene responded:

Danny, you've made a mistake here. Economics can in no way show that 'realist' theories of value are false. How in the world could it possibly demonstrate this, since the question is philosophical? What Menger pointed out was that, for the purpose of economics, the question of the 'real value' of something does not arise -- the price is determined by what people think something is worth, whatever its 'real' worth may be. Menger explicitly acknowledged that the value someone places on something may be incorrect.

It was a terrible mistake on Mises' part to try and turn Menger's correct theory of economic value into a metaphysical doctrine about the 'purely subjective' nature of value. In fact, nothing whatsoever is or ever could be 'purely subjective' -- both subjective and objective are abstractions from any concrete experience, and neither can exist on its own.

Now, Gene makes several points in this comment, and I think each of them is worth discussing. As I understand them, Gene's contentions are:

1. Economics cannot demonstrate that realist theories of value are false because the truth or falsity of those theories is a philosophical matter.


2. Menger's view on the subjectivity of value was a methodological position; he believed that in fact, people could be wrong about the value they placed on objects.


3. Value cannot be purely subjective because it must have an objective component. Mises thought otherwise, and this was a mistake.

I will address each of these points in turn.

II

Economics cannot demonstrate that realist theories of value are false because the truth or falsity of those theories is a philosophical matter.

It's conceivable to me that Gene could mean either one of two things with this point:

1. The truth or falsity of realist theories of value is a matter that falls outside of the field of economics. Accordingly, economics has nothing to say about it.


2. The philosophical nature of value theory means that the truth or falsity of realist theories of value cannot be demonstrated.

If Gene meant the first thing, then I don't really want to go to battle over the point. I would hope that economists wouldn't want to say, "We're economists, not philosophers; value theory just isn't our thing," since...well...it should be. But if this is an issue, then I'll gladly take off my economist hat and put on my philosopher hat for the point of discussion. My philosopher hat is way more comfortable anyway.

If he meant the second thing, then I disagree, The value subjectivist is contending that realist theories of value commit a category error by claiming that objects can have intrinsic value. It should be possible, then, to demonstrate analytically whether this is the case.

III

Menger's view on the subjectivity of value was a methodological position; he believed that in fact, people could be wrong about the value they placed on objects.

In order to discuss this claim, it will be valuable to see what Menger himself had to say about this. Since my exposure to Menger's work is rather limited, I will base my discussion on what he has to say about this at the beginning of Principles of Economics, but I will be happy to be corrected if Menger changed his view or expanded on this discussion elsewhere.

Menger's theory of "goods-character" is built on four conditions (PoE 1.1):

1. A human need.


2. Such properties as render the thing capable of being brought into a causal connection with the satisfaction of this need.


3. Human knowledge of this causal connection.


4. Command of the thing sufficient to direct it to the satisfaction of the need.

On the possibility that someone might be mistaken about an object's goods-character, Menger writes (ibid):

A special situation can be observed whenever things that are incapable of being placed in any kind of causal connection with the satisfaction of human needs are nevertheless treated by men as goods. This occurs (1) when attributes, and therefore capacities, are erroneously ascribed to things that do not really possess them, or (2) when non-existent human needs are mistakenly assumed to exist. In both cases we have to deal with things that do not, in reality, stand in the relationship already described as determining the goods-character of things, but do so only in the opinions of people. Among things of the first class are most cosmetics, all charms, the majority of medicines administered to the sick by peoples of early civilizations and by primitives even today, divining rods, love potions, etc. For all these things are incapable of actually satisfying the needs they are supposed to serve. Among things of the second class are medicines for diseases that do not actually exist, the implements, statues, buildings, etc., used by pagan people for the worship of idols, instruments of torture, and the like. Such things, therefore, as derive their goods-character merely from properties they are imagined to possess or from needs merely imagined by men may appropriately be called imaginary goods.

In order for Menger to truly be an objectivist about value, he would need to say that there is an objective truth about what it is that humans need. This would allow him to run through the entire value proposition without any reference to opinions -- the human need would be objective, the properties of the object that allow it to meet that need would be objective, the human awareness of those properties would be objective, and the command of the object sufficient to use it to satisfy the need would be objective.

But there is, I think, a good reason to be wary of this step (with apologies to the vulgar Aristotelians and, as is redundant to note, the Objectivists). As Isaiah Berlin pointed out in The Crooked Timber of Humanity (79-80):

There are many objective ends, ultimate values, some incompatible with others, pursued by different societies at various times, or by different groups in the same society by entire classes or churches or races, or by particular individuals within thm, any one of which may find itself subject to conflicting claims of uncombinable, yet equally ultimate and objective ends.

It is on the foundation of this basic idea that Mises writes, in Theory and History (1.3):

What the theorem of the subjectivity of valuation means is that there is no standard available which would enable us to reject any ultimate judgment of value as wrong, false, or erroneous in the way we can reject an existential proposition as manifestly false. It is vain to argue about ultimate judgments of value as we argue about the truth or falsity of an existential proposition.

Now, Mises takes this idea to a rather limited conclusion, noting that (ibid):

We may, for instance, try to show a Buddhist that to act in conformity with the teachings of his creed results in effects which we consider disastrous. But we are silenced if he replies that these effects are in his opinion lesser evils or no evils at all compared to what would result from nonobservance of his rules of conduct. His ideas about the supreme good, happiness, and eternal bliss are different from ours. He does not care for those values his critics are concerned with, and seeks for satisfaction in other things than they do.

But an even more important problem can arise even if people agree about what is of ultimate value. As Gerald Gaus writes in his essay, "Liberal Neutrality: A Compelling and Radical Principle" (22):

The crucial problem is the ranking of values...According to Milton Rokeach, a psychologist, Americans agree in affirming a set of thirty-six values; what they differ on is "the way they organize them to form value hierarchies or priorities." If so, our main disagreements about the good are not about what is of value, but the relative importance of values. After all, what is a ranking of values but a "conception of the good?"

He notes, for example, that "...even if everyone agrees that smoking causes cancer, rational people clearly do disagree about whether the pleasures are worth the risk of death" (ibid).

I take it that even if there is, unbeknownst to us, an objectively true account of the value system that humans ought to follow in order to achieve eudaimonia (which I sort of doubt), it is clearly not the case that we are currently at a point where we could say what it is with any degree of confidence that would enable us to plausibly claim that all dissenters are wrong. If this is true, then the objectivist conception of value is at best irrelevant and at worst completely false.

But there is a further problem for Gene in bringing in Menger's theory: Menger's characterization of goods-character is manifestly egoistic. This leaves no clear avenue for establishing attributions of intrinsic value which do not make reference to an object's capacity for satisfying some need of the valuer. Even if we take a valuer's needs in the broadest possible sense, this view is completely compatible with the moral nihilist's view, and incompatible with the moralist's understanding of moral values.

IV

Value cannot be purely subjective because it must have an objective component. Mises thought otherwise, and this was a mistake.

Here it will be important to understand what the value subjectivist means when she claims that value is subjective. Clearly, the things that we value are objects, and we take the nature of at least some of these objects to be a matter of objective fact. The subjectivist would be stupid to deny this. She would similarly be stupid to deny that the capacity for certain objects to be brought into causal connection with the production of certain consequences and outcomes is a matter of objective fact, or at least of empirical discourse.

What the value subjectivist is saying is that the attributes and capacities of an object are only valuable insofar as the ends which they promote are valuable. And further, that there is no truth (or at least no truth accessible to us) about what ultimate ends are the appropriate objects of value and how we should rank those ends relative to each other. The relevant "subjectivism" is based on the thesis of reasonable and potentially irresolvable pluralism about this issue -- the value of ultimate ends, on this view, will come down to subjective opinions, tastes, or biases (though this doesn't need to be a pejorative claim as the terms might connote).

Now, Mises actually went a step further and argued that valuing was a voluntary thing -- the product of action. In Theory and History, Mises writes that "Judgments of action are voluntaristic" and "Judgments of value are mental acts of the individual concerned" (1.1). And I think that in this regard, he was not correct (or at least not completely correct. The problem arises from his definition of "action," offered in Human Action (1.1):

Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego's meaningful response to stimuli and to the conditions of its environment, is a person's conscious adjustment to the state of the universe that determines his life.

If action inherently aims at ends, and the selection of ends is an action, then we get turtles all the way down. But one need not adopt Mises' conception of the voluntary nature of attributing value in order to reach the subjectivist's conclusion. One needs only acknowledge that there is no objective conception of the good that we can know, and therefore opinions about ultimate ends are all we have to work with.

Personally, I find this position to be extremely compelling. The ball's back in your court, Gene!

Lighting Authoritarianism Is Hilarious

It appears that the European Union is set to ban certain energy-inefficient light bulbs, "forcing consumers to buy more energy efficient alternatives." First to go will be conventional 100 and 60 watt pearl bulbs and frosted 25 and 40 watt bulbs; the rest of the inefficient bulbs will be "phased out" (i.e., prohibited by force of law) by 2012.

Do I care? No. But I did find one part of the article to be utterly brilliant. According to the owner of the British lighting chain Ryness, "We are seeing people coming in and bulk buying. People like frosted bulbs because they have a softer light." But according to a spokesman for The Lighting Association, a European Trade Association, "Consumers will realize in the end that the alternatives provide substantial savings and have equivalent light quality to incandescents." Sends chills down your spine, doesn't it?

For the uninitiated, the problem with the spokesman's statement is not that "They're regulating light bulbs! Communism is right around the corner!" The problem is that this guy has an opinion about the quality and value of these products that is very clearly not shared by a lot of people. And these people are apparently willing to spend a whole lot of extra money in order to have light bulbs that this guy finds to be equivalent to the cheaper ones. So could it be that the fluorescents have yet to prove their value to some people?

I personally use compact fluorescents in my home. They work just fine, and I'm very happy to save the money, energy, and space it would take to maintain a supply of incadescents that would match the life of the fluorescents. But the light bulbs are very much not the same. Fluorescents take time to heat up, they look funny, and they emit a decidedly different quality of light. Maybe I will "realize" that this wasn't true after I haven't seen an incandescent light bulb for a while, but while I still see the differences every day, it's pretty difficult to come to that "realization." Again, I don't mind the differences, but some people might. And if they're willing to actually pay money in order to not use fluorescents, then why on Earth would I want to forcibly stop them from doing so?

One possible answer might lie in the fact that the European Union is trying to limit CO2 emissions. Using energy inefficiently, then, is not just a waste of money -- it's a contribution to global climate change. I may be reading into this too far, but it seems to me that what's happening here is a proclamation that "The differences between fluorescent and incandescent bulbs are not important enough to justify allocating a portion of our CO2 budget to allowing consumers to use incandescents." But this is exactly the kind of mindset that market-based policies are designed to avoid! The whole point of a market-based policy is that you increase the price of the thing you want to avoid, and people cut back wherever it's the least uncomfortable for them to do so. The policy is specifically designed to make it so regulators don't have to decide where those cuts will take place; that's the problem with centrally coordinated programs!

According to the owner of Ryness, if you watch what people are doing, you will clearly see that switching from incandescent light bulbs to fluorescents is not the least uncomfortable thing to do. The fact that people are motivated to actually go to the store and buy massive quantities of light bulbs suggests that they are quite uncomfortable indeed with this switch, and are willing to significantly go out of their way to avoid it!

And so in conclusion, facepalm.

The Yin and the Yang: An Approach to Publicizing Broadly Libertarian Ideas

I had an idea today for a new way that one might go about spreading some of our (well, at least my) ideas to the public. The idea is to use the familiar imagine of the Taijitu -- the yin yang symbol -- to offer a nuanced articulation of difficult concepts that sometimes end up being articulated sloppily with other approaches. The concept of yin yang is that mutually opposing forces can be seen as interconnected and even as interdependent, so that each gives form and substance to the other. I can immediately think of two examples of how this approach would be useful:

Unity and Separateness

On one hand, we need unity in order to have things like property rights, right-of-way conventions, procedural rules, and arguably collectivized programs where burden-sharing is important to us. On the other hand, we need separateness in order to plan and lead our own separate lives according to our own values and goals. But sometimes our best successes as communities come from living and letting live, and sometimes our best successes as individuals come from putting aside our own interests and being good neighbors. When we understand unity in the light of separateness, and separateness in the light of unity, we can achieve each more fully than we could if we pursued either on its own.

Knowledge and Ignorance

We know a tremendous amount about the world in which we live, and our knowledge can enable us to do wonderful things. But one of the most important things that we know is just how ignorant we are. A little bit of knowledge can be an extremely dangerous thing, and sometimes the wisest action is to admit that we not know for sure what would be best. Sometimes when we allow for an open-ended result, we find out that we end up with something better than we would have been able to design ourselves.

These are just two examples, and both are clearly in need of development. But I'm finding this way of thinking to be very satisfying and elegant; you pose two seemingly conflicting values against each other and show how each helps give the other its shape. And I think that as a vehicle for getting people to think about complicated philosophical issues that are integral to the advancement of liberty (like the knowledge problem, reasonable pluralism, the separateness of persons, the nirvana fallacy, etc.), it might be helpful to use this tool to explain things in a way that can resonate with anyone. Plus, I think it opens the door for a libertarianism or liberalism that is softer, more understanding, and more reflective than the kinds of views that so often come from our camp. Leave it to the notoriously wishy-washy, hand-wavy guy to come up with something like this...but I like it.

Some Thoughts on the Cost of a Carbon Tax

Lately I've been hearing a lot from some people on the Right about potential climate change legislation and why it's going to be horrible. The idea from some of these people seems to be that whether we have an auction-based cap and trade system (which would be relatively imbecilic but seems more or less inevitable) or a carbon tax system, the end result is going to be that we end up paying a whole bunch of money, and we're all going to go straight to the poor house as a result.

Since I think that auction-based cap and trade systems are excruciatingly dumb, I'll focus my comments on a carbon tax system. If this gives anyone an ulcer, I'll be happy to explain how these thoughts can apply to a cap and trade regime, but I'd rather not have to do those gymnastics if no one's ultimately going to care. The subject of this post, then, is whether or not a carbon tax should be expected to force us all into poverty. I will avoid here the question of whether or not such a policy would be advisable in an all-things-considered sense, since that's a question far too big for this post. Suffice it to say that I don't think the necessity of such a policy is as obvious as some people make it out to be. But that's a conversation for elsewhere.

So here's how an effective carbon tax (in the sense of mitigating contributions to climate change) might be expected to work. The government slowly phases in a tax on things like coal, natural gas, and petroleum which are cited as sources of greenhouse gas emissions, as well as other influences on the climate system like agriculture, land clearing, etc. The revenues from the tax are used to finance a tax cut (ideally structured to cancel out some of the potentially worrisome distributive effects of the tax) or to finance some government expenditure that otherwise would have resulted in a tax increase (i.e., paying for the preposterous stimulus programs). The goal of the policy is to increase the price of energy-intensive goods with the tax, and to use the revenues to ensure that people do not lose overall purchasing power. Accordingly, people would have an incentive to shift their consumption away from energy intensive goods and towards non-energy-intensive goods. And while those who purchase disproportionately energy-intensive goods would be expected to suffer, those who purchase disproportionately non-energy-intensive goods would actually be expected to benefit.

Let me illustrate this in action. Let's say we have an economy with two goods: rocks and rubber balls. Producing and using rocks, in our example, does not involve any net impact on the climate system, whereas producing rubber balls involves the use of a substantial amount of fossil fuel. Rocks and rubber balls both cost $5 before the tax. Now let's imagine that every year, Xavier typically buys three rocks for $15, and three rubber balls for $15. And imagine that Cynthia usually purchases five rocks for $25 and only one rubber ball for $5.

Now we implement a carbon tax of $1 on rubber balls, so they now cost $6. The argument from some on the Right says, "Well look; now Xavier's consumption would cost $33 and Cynthia's consumption would cost $31, instead of both costing $30! This is a tragedy!"

But watch: let's say that Xavier and Cynthia don't change their consumption patterns in light of the tax. Xavier ends up paying $3 more in taxes to finance the purchase of the rubber balls, and Cynthia ends up paying $1 more. The government now uses its $4 to finance a $2 tax cut for both Xavier and Cynthia. So now Xavier ends up paying $1 for consuming a disproportionately high amount of rubber balls, and Cynthia actually gets paid $1 for consuming a disproportionately low amount of them.

In such a scenario, we might expect that the parties would see an opportunity to benefit from shifting their consumption away from the more expensive rubber balls. And the extent to which they were doing this before others or to a larger degree, they would benefit. Those who stubbornly insisted on consuming rubber balls, the argument goes, would simply be forced to pay the price for their anti-social behavior.

Things are a little more complicated with real governments who never actually do things like returning all the money, and where there are costs associated with implementing and enforcing the tax. But at least that's the idea. If the tax is revenue neutral, the only people who go to the poor house are the people who have a far greater impact on the climate than everyone else. And when those people go to the poor house, everyone else gets paid for being more responsible. So yes, some people would lose, but it seems like the advocates of this policy would want this sort of thing to be happening. Accordingly, the argument from some on the Right -- which focuses not on how we wouldn't want to trust the government with this policy, and not on how expensive it would be to implement, but only on the fact that it involves an increase in prices -- seems to me to be an utter failure in its current form.

Accordingly, it seems to me that this argument should be abandoned. There are other more plausible arguments that could satisfy the Right's thirst for some reason to oppose climate change legislation. They could question the ethical basis for such a policy, arguing that cost-benefit analysis (by which the policies are typically justified) are not ethically legitimate grounds for the kind of intervention that would be involved in the policy, and that the philosophical groundwork that would be necessary for an alternative analysis has not been satisfactorily settled. They could voice doubts about the government's ability to implement a policy like this in any way that wouldn't be a disaster more morally questionable than letting climate change happen. They could argue that given the amount of restructuring that will be necessary to substantially decrease our contributions to climate change, the resources we use to mitigate climate change could be better used fighting malaria around the world, bringing clean water to those who don't have it, researching cancer and AIDS, or any number of other things. But this overly simplistic argument about costs is misguided, and should be trashed.

Wait, Since When? (Update: Oh. Since Never.)

Update: I take it all back. See the bottom of this post.

In my current line of work (energy industry research), I come across quite a few government research reports, and generally I need to suspend my Austrian-ness and libertarian-ness as I read them in order to avoid getting frustrated. It's not that they're poorly written; in fact, they tend to be really well researched and thought out, and it's incredibly valuable to have access to them. But as one might gather from this post, there are sometimes little tidbits in them that make me want to pull my hair out. Moreover, they almost never make it a point to mention things like government failure, and are very often ignorantly perfectionist and guilty of the nirvana fallacy.

So I was very surprised to stumble across a report from the Congressional Budget Office, The Economics of Climate Change: A Primer, which described the problem facing policymakers like this:

The Earth’s atmosphere is a global, open-access resource that no one owns, that everyone depends on, and that absorbs emissions from an enormous variety of natural and human activities. As such, it is vulnerable to overuse, and the climate is vulnerable to degradation—a problem known as the tragedy of the commons. The atmosphere’s global nature makes it very difficult for communities and
nations to agree on and enforce individual rights to and responsibilities for its use.

With rights and responsibilities difficult to delineate and agreements a challenge to reach, markets may not develop to allocate atmospheric resources effectively. It may therefore fall to governments to develop alternative policies for addressing the risks from climate change. And because the causes and consequences of such change are global, effective policies will probably require extensive cooperation among countries with very different circumstances and interests.

However, governments may also fail to allocate resources effectively, and international cooperation will be extremely hard to achieve as well. Developed countries, which are responsible for the overwhelming bulk of emissions, will be reluctant to take on increasingly expensive unilateral commitments while there are inexpensive opportunities to constrain emissions in developing countries. But developing nations, which are expected to be the chief source of emissions growth in the future, will also be reluctant to adopt policies that constrain emissions and thereby limit their potential for economic growth -- particularly when they have contributed so little to the historical rise in atmospheric greenhouse gas concentrations and may suffer disproportionately more of the negative effects if nothing is done.

The bolding in the above is mine. I honestly don't think I can think of another example of a central government publication being so good about acknowledging the power of spontaneous order and the need to avoid the Nirvana fallacy. So kudos goes to Robert Shackleton of the CBO's Macroeconomic Analysis Division, who wrote the study, for not sounding like someone who's ignorant of economic theory! I'm just starting to read through this report, but I'm already looking forward to hearing what he will have to say.

Those who have followed my work will be aware that I am generally hesitant to endorse the approach to the issue of climate change which treats the problem as a question about the most efficient allocation of social resources. It seems to me that efficiency considerations can only justify coercive and centrally organized social engineering in rather extreme situations, and I am not fully convinced that the specter of climate change qualifies (or that if it did, the currently popular policy approaches would be the appropriate way to handle the problem). And looking through the table of contents in Shackleton's report, it doesn't appear that he considers these issues. But this is typical in the mainstream discourse, and I am not entirely surprised -- I can't hold it against him.

However, I can hold it in favor of former CBO Director Peter Orszag, who mentioned my point of view in a presentation at Wellesley College in October. On the 13th slide of his presentation, Orszag wrote:

Alternative view: Valuation of future benefits should be viewed primarily as a decision about equity rather than as a traditional investment decision.

But viewed as an equity issue, inconsistencies arise relative to how other intergenerational trade-offs are analyzed

Of course, I don't think Orszag is right to brush aside my approach in such a cavalier manner. And I certainly think that if "inconsistencies arise" when policies are considered from the standpoint of equity, then that seems like a problem for the views which are made inconsistent, and not the idea that policies should be based on equity. But the greater point is that at least Orszag is aware enough of what's going on to bring up this issue.

And this concludes my statist love-fest. You can all go back to your various degrees of distrust, dissent, and anarchist tendencies now.

Update:

Ugh. I take back all my love for Shackleton. Way to break my heart, man! Enjoy:

The atmosphere and climate are part of the stock of natural resources available to people to satisfy their needs and wants over time. From an economic point of view, climate policy involves measuring and comparing the values that people place on resources, across alternative uses and at different points in time, and applying the results to choose a course of action. An effective policy would balance the benefits and costs of using the atmosphere and distribute those benefits and costs among people in an acceptable way.

And by "Enjoy," I mean, "Try not to break something. It'll be okay."

A Little Bit of Blasphemy: A Reply to Onorati

Over at the FreedomWorks blog, my good friend Joseph Onorati wrote a post in condemnation of protectionism and in favor of free trade. As you can guess, I am in general agreement with Joseph on this one. But because I am a wicked troll, I had no choice but to post a scathing counterargument on the blog. I figured it might be of interest to some of you, and I'd love to help draw attention to Joseph's work and the FreedomWorks site. So check it out!

I also wanted to offer a few counterarguments to the counterargument I presented on the FreedomWorks blog in case anyone suddenly feels uncomfortable about free trade in light of something I said there (I wouldn't want to actually make someone advocate protectionism, of course; I was just poking fun at Joseph!). So here are, as I see them, the three points which together make liberalizing trade a coherent position to advocate for in national policy debates:

1) The particular values which we might seek to promote through protectionist policies are not universally shared across the country. In fact, it's not even close. A respectful society would not impose coercive policies which are inescapably designed in a way that impoverishes the general populous in order to promote goals which are not necessarily supported by those who will be affected.

2) As Joe correctly noted, the free market -- with its power to spontaneously coordinate the pursuit of constantly changing and often competing ends without the direction of a conscious designer -- is the most powerful mechanism we know of for creating wealth and prosperity. Nothing else even comes close. So by allowing the market to function, we can be relatively confident that people will be generally better off than they will be under more consciously coordinated regimes which aim to mold society to a particular static vision.

3) Centralized decision-makers are ill-suited to making effective protectionist policies. They are subject to lobbying pressure and a set of incentives which often lead them to make decisions for reasons other than their beliefs about what would be in the best interests of the people, and even when they are acting on good intentions, they often lack the knowledge and understanding that would be necessary to carry out their plans with any degree of precision and effectiveness.

For those three reasons (and not only one of them by itself), I think it's reasonable to support free markets in national-level policy discussions. To be clear, I don't always think that's the right call for more localized and tightly unified policy-making groups. But where policies are going to be imposed in broad strokes on a country of over 300 million people, I can't bring myself to support putting any power of that sort in the hands of any bureaucrat or politician, no matter how much they want the best for the country.

Walter Block on Sexism: Straddling the Line Between Thin Libertarianism and Vulgar Libertarianism

Introduction

Dmitry Chernikov left a comment on an earlier post directing my attention to an essay by Dr. Walter Block which basically just railed on several thinkers with whom I identify for various reasons. The essay appears to be a work in progress, as Dr. Block's typically clear and thorough writing style is conspicuously absent, but as the main points seem to be there, I think it would be fair to critique them. The essay covers a wide array of topics and it would not do to address them all here. I will focus here, therefore, on Dr. Block's response to Dr. Roderick Long on the issue of feminism.

In piece cited in the essay, Long's main point is built on the idea that treating women differently than men simply because they're women fails to give them their due, and that where we can see sexism embodied in wage structures, we should decry it. He engages an objection to this view which he attributes to Austrian economists and particularly Block himself, which is that the free market naturally ensures that women are not mistreated, since their wages would naturally be brought into line with their marginal productivity by the workings of the market process.

Long argues that in spite of the equilibrating tendency of the marketplace to bring wages into line with workers' marginal productivity, we cannot say with any degree of certainty that prevailing wages at any particular time will actually satisfy that equilibrium condition (e.g., because of imperfect knowledge, lack of entrepreneurial actions, etc.). Accordingly, even if employers were solely dedicated to maximizing monetary profit, there would be no guarantee that wages would equal workers' marginal productivity.

He then argues that on top of this, there are many reasons to believe that employers are not perfectly rational monetary-profit-maximizers, acting on influences like prejudices, presumptions, etc. So even if the market were providing an incentive through the profit motive to bring workers' wages into line with their marginal productivity, other factors could be providing a skewing counterweight that would make markets tend towards unfair wages for women.

So essentially, Long is saying that it simply isn't true that the free market naturally ensures that women are paid their fair wages, and that in fact we have good reason to believe that women are not being paid fairly. Therefore, he concludes that one can't create problems for the claim that there are sexist wage structures, and that they should be condemned, by arguing that the market naturally eliminates sexist wage structures.

Block offers no less than nine objections to this argument, which I perceive to take three basic forms: 1) Long's economic arguments are incoherent and there is evidence that he happens to be wrong; 2) The wage structures to which Dr. Long objects are not coercive, and therefore are not unjust and have nothing to do with libertarianism; and 3) There is no reason to object to people paying women differently than men, or to cultural institutions that demean women. I will discuss each of these objections in turn.

I. Are the economic issues discussed by Long dealt with improperly?

Block's first question is:

But why would there be a bias in the market such that entrepreneurship necessarily results in lower female wages in disequilibrium? Why not wages higher than MRP when the market is not in its equilibrium or evenly rotating state? Long, let alone not furnishing us with an answer to this absolutely crucial implicit claim of his, does not even seem to recognize that there is a need to do so.

In passing, I should note that budding young philosophers out there should be aware of what's about to happen here. Block has engaged in some very clear PhilosophyFTW!! If he is wrong -- and I think he is -- then this will be embarrassing for him, whereas if he had been nice about his objection, it would be totally okay for him to be mistaken. So here's the tip: If you're going to argue that someone made a very obvious mistake, don't be a jerk about it.

And here's Long furnishing us with just such an answer, quoted from Block's own paper:

Even if women are not generally less productive than men...there might still be a widespread presumption on the part of employers that they are, and in light of the difficulty of determining the productivity of specific individuals, this presumption would not be easily falisified, thus making any wage gap based on such a presumption more difficult for market forces to whittle away.

And:

But there is no reason to rule out the possibility of deliberate, profit-disregarding discrimination either. Discrimination can be a consumption good for managers, and this good can be treated as part of the manager's salary-and-benefits package; any costs to the company arising from the manager's discriminatory practices can thus be viewed as sheer payroll costs. Maybe some managers order fancy wood paneling for their offices, and other managers pay women less for reasons of sexist; if the former sort of behaviour can survive the market test, why not the latter?

Now, Block disagrees with the attribution of the wage gap to these phenomena, but that doesn't mean that Long does too. Clearly, Long believes that the answer to the question of why the wage gap favors men (even when productivity differences are taken into account) lies in some combination of unfortunate social stereotypes and sexism. Not only does Long apparently recognize that one would need to explain this, but he basically devotes 2 paragraphs of a 9 paragraph argument to doing so. So I don't think that Block's criticism is on the mark here.

Block's next piece of evidence that Long's economic reasoning is bad is to point out that lesbians apparently make more money than straight women. The article Block cites is no longer at the linked location, but I would have to wonder...aren't there a lot fewer lesbian housewives and stay at home moms? And is it impossible that lesbians -- who have often had difficult, character-building upbringings -- are typically more productive than straight women? I'm not saying that this isn't evidence against Long's point, but it seems like more needs to be said.

Block moves on to suggest that Long is on a slippery slope that will commit him to suggesting that minimum wage laws are not all bad. But Long specifically said that he didn't necessarily support government intervention, and concluded his argument with the claim that the wage gap is:

...no reason to gripe about 'market failure.' Such failure is merely our failure. Instead, we need to fight the power - peacefully, but not quietly.

So Block seems to miss the mark here as well.

Block's next point is that Long's argument sounds like the "cluster of error" of Austrian Business Cycle theory, and:

...as we know from our study of business cycles, any such conglomeration of error cannot long endure without continued statist interference with markets. It would be dissipated by the market's profits and loss weeding out process.

Now, anyone who's been paying attention will realize that Block has objected to Long's critique of a particular argument by simply reiterating that argument. Accordingly, the best response would be to simply reiterate Long's critique: A) The market's "profits and loss weeding out process" is a process and can be hampered by a number of factors which appear to be at work in this instance (e.g., entrenched prejudice, a lack of clear information about the marginal productivity of individual workers); and B) There are other examples of unprofitable business strategies that have survived the market test (e.g., fancy wood paneling in managers' offices), and the market is not a perfect mechanism for weeding these strategies out. I would beg the question if I suggested that this rebuttal wins the point for Long, but it is at least clear that Long has a response which this particular objection does not preempt. So again, Block somewhat misses the mark.

Block's final objection to Long's economic arguments is that he simply doesn't believe that sexism operates in the way that Long suggests: he thinks that sexism may actually benefit women where it does occur. He suggests that:

...when it comes to pay, my own informal assessment is that it works mainly in the direction not of increasing the pay gap between men and women. Rather, it is all in the direction of paying attractive women a beauty premium.

He goes on to suggest that:

...if they [men's tastes] are in opposition to anyone, it is to other males who are seen as competition.

Now I don't have the empirical evidence to go to battle on this point. So it will have to suffice to say that it seems very unlikely to me that the underlying productivity difference between women and men is being underrepresented by the existing wage gap because hot women are being paid more than their labor is worth. I mean think about it: Long is saying, "Women make 75% as much as men for the same work," and Block is saying, "And lucky them! They'd be making even less if they weren't so damned cute!" Ummm...somehow that seems...just...no. I could be wrong to think that negative sexism plays a more significant role than positive sexism, but...well...I just don't think I am.

For one thing, many beautiful women will tell you that it can be difficult to be taken seriously for top positions as an attractive woman because many managers believe that beautiful women have only gotten to where they are on the basis of their looks. Beauty premiums, then, may well be counterbalanced somewhat by beauty handicaps. And even if beauty premiums really did outweigh the lower wages generated by demeaning sexism, that wouldn't mean that we should call the whole thing a wash. Surely Long would object to sexism in the workplace even if it didn't show up in aggregate wage statistics.

II. Is sexism an issue on which libertarians should opine?

This brings us to the next kind of objection that Block raises to Long's argument, which is that sexism embodied in wage structures and social conventions is not coercive, and therefore is not an appropriate domain for libertarian inquiry. Block writes:

Of course, there are other problems [besides coercive violence] that libertarians are involved in combatting: bad breath, the heartbreak of psoriasis, losing chess games, cancer, the list goes on and on. But here, libertarians who do so are not acting qua libertarians. This is a distinction that is crucial for a clear understanding of this philosophy.

This objection is an instantiation of Dr. Block's longstanding argument against so-called "thick" libertarianism, a view which holds that libertarians ought to be concerned not only with matters involving coercive violence, but also a wide range of other issues which are in one way or another connected with their views on coercion. Block's argument is that these other issues are certainly important and worthy of discussion, but they have nothing to do with libertarianism, per se. Libertarianism, according to Block, is a philosophical view which is directly concerned with opposing coercive violence, and that's pretty much it.

Now, at first glance, this would seem to be an argument about semantics. If it's really such a big deal for libertarians to talk about other issues "while wearing their libertarian hats," then for the sake of discussion, Dr. Long could just say, "Fine. I'm not talking about sexism as a libertarian. I'm talking about it as a feminist who happens to be a libertarian as well." But more substantively it seems like we should ask why Dr. Block is objecting to the use of the term "libertarianism" in talking about things like sexism, and try to decide whether there's really a deep difference between, say, being a libertarian and being a feminist.

What Dr. Block seems to have in mind is that libertarianism is, at its core, built around the concept of "justice," where justice is defined as turning on the legitimacy of initiation of coercive force. This seems to me like a naked move to entrench the non-aggression principle in a piece of terminology by warping the normal meaning of justice to conveniently allow for a clean distinction between coercive and peaceful behaviors to be labelled "unjust" and "just," respectively. But no matter; that's how Dr. Block seems to want to use the term, and we can grant it. On this view, then, we should notice that the fact that something is "just" need not mean that it is desirable, aesthetically pleasing, reflective of what people deserve, impartial, or even morally acceptable. It just means that no one has "thrown any punches" yet in a way to which we object, and therefore there cannot have been any injustice.

If we define libertarianism as a school of thought focusing on "justice" as defined above, then we will be led to the position advocated by Dr. Block:

Why is this [inequality in wages for equivalent work] unjust is this unjust from a libertarian perspective? It is not.

That is not to say that individuals who are libertarians have no business objecting to these inequalities. To reiterate Block's point, quoted above:

Of course, there are other problems that libertarians are involved in combating: bad breath, the heartbreak of psoriasis, losing chess games, cancer, the list goes on and on. But, here, libertarians who do so are not acting qua libertarians.

The point is, these things are objectionable for reasons which have nothing to do with justice, as defined above. Therefore, they have nothing to do with libertarianism, which is a philosophy that deals only with justice.

I think that this view is mistaken. To see why, we should note that in the above, I did not say anything about what position libertarians actually take on positions of justice (as I defined it); I only said that Block's view limits libertarianism to matters of so-called "justice." If my familiarity with Dr. Block's views serves me correctly, I believe that he would want to say that the libertarian view of justice has something to do with the non-aggression principle, such that initiating coercive violence is "unjust," and anything else is "just." Since I don't believe that the non-aggression principle is correct, and I want to be charitable to the libertarian position (particularly since I consider myself to be a libertarian), I will rephrase this position to say that the initiation of coercive force is prima facie unjust, and that (to the extent that we accept the definition of "justice" with which we are working here) anything that does not involve an illegitimate initiation of coercive force is just (for a discussion of this view, check out this post). If I'm wrong, and the non-aggression principle is true, then we can simply say that only illegitimate initiations of coercive force are unjust, but all such initiations are unjust. In other words, coercion is prima facie wrong, and there are no considerations which would cause us to find it legitimate. The way I've phrased it, we just get to include more views under the umbrella of "libertarianism" (most importantly, mine).

But libertarianism would be an empty shell of a position if it were simply a vague claim that "If and only if a view has only to do with the initiation of coercive force and views it as at least prima facie wrong, then it is a libertarian view." It would seem to behoove us as libertarians to say that a part of libertarian philosophy has to do with explaining why people should hold that kind of view. That is, it should explain why we should care so much about the initiation of coercive force, and why we are generally disposed to object to it as a matter of principle.

Now a complication arises here because (again if I correctly recall his views), Dr. Block believes that the initiation of force is unjust as a matter of undisputable logical fact. His view, following in the tradition of libertarian thinkers like Dr. Hoppe, is that one cannot advocate, condone, or engage in the use of coercive force without committing oneself to a contradictory position. The only position that one can reasonably defend, according to this view, is the libertarian view that the initiation of coercive force is incorrect. The reason that this is a complication is that for reasons I have discussed here and here, I think that this position is flat wrong (as was brought to my attention after writing those pieces, Dr. Bob Murphy and non-quite-Dr. Gene Callahan made some similar arguments as well). It is simply not true that any other position besides the non-aggression principle is incoherent.

But other libertarian views, including the one to which Dr. Long ascribes as well as the one to which I ascribe, resist coercion because of a fundamental belief that each of us is a valuable individual with his or her own life to lead. We suggest that it would therefore be disrespectful and unbecoming of us to force others to live according to plans that are not their own or to destructively interfere with their ability to pursue theirs. We see ourselves as having moral significance, and we acknowledge that the things that make us important also make others important. It is out of this deep appreciation and respect for individuals -- and the separateness of individuals' unique lives -- that we demand justification from those who would interfere with their neighbors' lives (or condemn them out of hand, for those libertarians accepting the non-aggression principle).

If we accept that something like this is at the root of the libertarian position on the issue of justice (still within our provisional definition), then it seems reasonable to say that an inherent part of libertarianism is an attitude of respect for individuals. And it is for this reason that I believe Dr. Block to be in error. If libertarianism is built upon a foundation of respect for others, then it would seem that libertarians would be committed to opposing any view which contradicts that paradigm of respect. And what Long is doing in leveling this argument is contending that sexism against women is indeed at odds with a view which sees all people as worthy of respect, as it is built upon subordination and dehumanization. So by incorporating feminism into libertarian philosophy, Long seems to be contending that feminism represents the position which follows from the consistent application of the ideas that make coherent the libertarian position on so-called "justice". In my opinion, this seems like a perfectly reasonable thing for a libertarian to be saying qua libertarian.

So what, then, of Block's point that:

Of course, there are other problems that libertarians are involved in combating: bad breath, the heartbreak of psoriasis, losing chess games, cancer, the list goes on and on. But, here, libertarians who do so are not acting qua libertarians.

This point seems intuitively right (except for the part about losing chess games; surely Block doesn't think that the world would be a better place if all chess games ended in stalemates). But whereas there is a reasonably strong connection between the ethical underpinnings of libertarian political philosophy and feminism, there is no such connection with bad breath, psoriasis, or cancer. The analogy simply doesn't work, and for reasons that I believe vindicate Long.

III. There is nothing wrong with sexist wage structures or demeaning social conventions

There is a third sort of objection appearing throughout Block's argument which basically suggests that beyond being a non-libertarian issue, Long's objections speak to a problem that isn't a problem. In doing this, I believe Block skirts the line between merely "thin" libertarianism and "vulgar" libertarianism.

The term "vulgar libertarianism" can best be understood by going back to our distinction between "just" and "unjust" from earlier, which defined as "just" anything that doesn't involve illegitimate coercion. Recall that we said that just because something is "just" by this definition does not mean that it is good, or even morally acceptable. Vulgar libertarian views, we will say, function essentially as "capitalist apologetics" by jumping to the conclusion that because something does not involve the illegitimate use of coercive force, it is not objectionable. The vulgar libertarian is the sort of thinker who, when presented with a lamentation about the outcomes generated by a free society, automatically reacts by saying, "Oh, but here's why that outcome isn't lamentable at all!" The vulgar libertarian, for example, might put down Dr. Block's Defending the Undefendable and proceed to argue that actually, the man who cheats on his girlfriend with a prostitute is doing nothing wrong, since no one has been coerced and the transaction was actually beneficial to both parties. Or that all poor people deserve to be poor, since they haven't produced anything for society that others have found to be worth paying any more to obtain. Or that the pervert who seduces the child is blameless, as both parties are simply doing what they want to be doing.

Let me be clear: I do not believe that Dr. Block is a vulgar libertarian. It is because I do not believe this that I am even making the argument that his views here seem to border on vulgar libertarianism. If Block were a vulgar libertarian, it would surely do little good to show that his arguments indeed sound like those that a vulgar libertarian might make.

So what in Block's paper am I talking about? Block first writes:

Perhaps most important, we must hark back to the biblical story where people are paid different amounts of money for doing precisely the same job; or what is the same thing, the same compensation for doing very different amounts of work...These disparities can be interpreted as a differential gift giving. That is, the employer pays everyone equally for equal productivity, but then makes a freely given donation to some but not to others.

For those not familiar with the story, there's a story in Matthew 20 about a vineyard owner who hires a group of workers to work at his vineyard, promising them a fair wage. Later in the day, he sees another group of workers who have not found any work for the day, and hires them to come help as well. At the end of the day, he pays all of the workers equally, to the consternation of the workers who had worked all day. Block's implication is captured by the differentially-paying vineyard owner in Matthew 20:13-16:

Friend, I am not treating you unfairly. Didn't you agree with me to work for the standard wage? Take what is yours and go. I want to give to this last man the same as I gave to you. Am I not permitted to do what I want with what belongs to me? Or are you envious because I am generous?

The first thing that one should notice is that in the vineyard parable, all of the workers were paid at least the "standard wage." A controversy might be raised, then, about whether the parable would apply to situations where capitalists were levering their advantaged position in negotiating with applicants to drive their wages below "fair" levels, which is presumably what Long thinks is going on when women are paid "unfairly." But even broaching the subject of "fair" wages opens up a can of worms all on its own, and the issue here is about sexism, not some form of wage egalitarianism.

The more substantive point is that when we consider the action of the vineyard owner, we see that he has acted out of generosity towards the late-coming workers. In the story, the reason for the generosity is not suggested to be some sort of prejudice against the early-coming workers, nor is the account stated in terms of some kind of malice, scorn, dismissiveness, or ill-will towards the early-comers. If these factors were involved in the story, then presumably Dr. Long would be uncomfortable with this example as well.

It seems pretty clear to me that when employers pay their male employees disproportionately higher wages, they are not doing so out of the generosity that the vineyard owner showed towards the workers who had not been able to find work. For that reason, I think that the analogy somewhat fails, though it is a valuable insight that unequal treatment does not necessarily have to objectionable. It's unequal treatment because of prejudice or sexism that should draw the ire of feminist, not unequal treatment as such.

Hopefully it will be clear, then, why I find this argument to be at risk of vulgarity. The feminist complains that sexist or prejudiced employers treat women badly by paying them less, and Block responds with an example of seemingly legitimate differential pay, with the implication that sexist and prejudiced employees are in the clear on its weight. In doing so, he conveniently defends the status quo and the employer, while comparing the feminists to grumbling and envious characters in a well-known story. But as the principle of charity compels us to assume that Dr. Block didn't perceive the disanalogy we discussed above, and did not intend vulgarity, we must keep in mind that we are not trying to argue that Dr. Block is a vulgar libertarian, but only that this particular position seems like it is wrong for reasons that are reminiscent of the vulgar paradigm.

Dr. Block's next point is entwined with the "thin" libertarian view discussed in the previous section:

...Long is going to have to decide whether his primary allegiance lies with feminism or libertarianism. This author does indeed touch on one aspect of this when he discusses the possibility that the wage gap between males and females might be due to in effect employer consumption [sic]: paying males more than females just for the sheer joy of doing so. If so, is this not the employer's right? And if so, from whence springs any possible libertarian objection to the wage gap?

That this argument borders on vulgarity can be seen by examining the first sentence. Remember, Block's argument for "thin" libertarianism is that the kinds of issues that concern the feminist here have nothing to do with libertarianism, and that the libertarian cannot talk about them qua libertarian. But why, then, would Dr. Long have to choose between these positions? If these are issues which really have nothing to do with libertarianism, then one should be able to be a libertarian while holding substantively any view on the issues that concern the feminist in this instance.

What seems to be going on here, as evidenced by the accommodating tone that Dr. Block takes in talking about "paying males more than females just for the sheer joy of doing so" is that Dr. Block has gone beyond his "thin" libertarianism in favor of a "thick"-er view in the opposite direction. That is, it's not just that sexism is not violent, and therefore is not "unjust," but rather, it seems like Block is flirting with saying that there is nothing wrong with sexism. But this is not thin libertarianism. It is vulgar libertarianism.

This sort of thing vaguely seems to reappear when Dr. Block writes:

What is this business of criticizing the freely made decisions of women to stay home and take care of babies? It matters not one whit that this is done "on moral grounds (or) prudential grounds." The libertarian qua libertarian simply has no business in criticizing "women's (choice of) greater responsibility for household work." It is no business of the libertarian, none whatsoever, to "combat" the "sexism" implicit in "the cultural expectations that lead women to assume such responsibility."

I don't want to get involved in saying something like "Well no, he didn't say that there is nothing wrong with these cultural expectations, but don't you think that's what he meant?!" But I do want to point out that if this argument is intended to promote "thin" libertarianism and not "vulgar" libertarianism, it seems like one would expect some kind of qualification along the lines of, "Of course, none of this is to say that these cultural norms should be embraced or even countenanced silently. They are simply not within the providence of libertarian discussion." And yet not only is such a disclaimer not offered, but what is written seems like it could be easily interpreted as an argument that "criticizing the freely made decisions of women to stay at home and take care of babies" "on moral grounds (or) prudential grounds" would be misguided, even if done from outside the realm of libertarian theory. Such an interpretation would be vulgar, even though it is not at all entailed by what Block actually says, and I think offers another example of Dr. Block straddling the line between thin and vulgar libertarianism, even if it does not technically cross it.

Conclusion

Having evaluated all three kinds of objection raised by Block to Long's discussion, and found each of them somewhat wanting, I think that a few closing words are in order. It will surprise no one to discover that I sided with Dr. Long in this argument before reading Dr. Block's piece, and therefore my response must be taken in that light. Further, there is no reason to expect that Dr. Block would have nothing to say to the points that I have raised here; this debate has been going on for a very long time, and presumably Dr. Block has heard most of the objections that can be offered against his position. Accordingly, it may well be that my points here have missed their mark.

That being said, I do think that I have raised some important questions here about Dr. Block's position and arguments, and that my analysis was both thorough and fair. Dr. Long's arguments cannot, I think, be dismissed as easily as Dr. Block's piece makes it sound.

Hopefully this has been as valuable and interesting for you to read as it was for me to write!

Mankiw's Decentralized Approach to Stimulus

Yesterday, Greg Mankiw pointed out that perhaps the federal government is not the right entity to be charged with repairing the diverse and complex system of interrelationships that is the national economy:

When designing a fiscal stimulus, there is no compelling reason for one size fits all. Let each governor make a choice and answer to his or her state voters. It is called federalism.

After spending the last week or so despondently sifting through the House and Senate Stimulus Bills in search of energy industry-related cash, I almost stood up and cheered. But then I remembered that nobody listens to ethics-free Republican hacks.

*Sigh*

The Department of Energy Is Clearly Trying to Piss Me Off

Sometimes I wonder if the government anticipates that I will read their reports, and puts little things in them specifically to get to me. Today's episode occurred while reading a (mostly well-done) new report from the Department of Energy's Electricity Advisory Committee, "Keeping the Lights On in a New World."

On page 66 of the report, the Committee's authors note that investments in new generation capacity predictably follow a cyclical pattern. To illustrate why this is the case, please consider the following fictional example. Fake City is served by a large, centralized coal plant which produces baseload power, and several natural gas plants which satisfy peak load. Over time, the demand for electricity in Fake City rises, but the centralized coal plant is unable to increase its generation sufficiently to satisfy it. Electricity prices rise, and investors notice that profit opportunities exist for anyone who can help to meet the shortfall. The existing natural gas plant operators ramp up their generation, and several new natural gas and wind facilities (which can be built relatively quickly and inexpensively) are brought online to take advantage of the high prices.

Eventually Fake City's utility operators come to believe that future electricity demand will be sufficiently high to justify investment in a large new coal plant (these are very expensive and take a long time to build, but are less costly to operate). They begin construction on the plant, and in the mean time, the new natural gas and wind projects rake in the earnings which justified their construction in the first place. Eventually, the new coal plant is brought online, which decimates the market price for electricity, flooding the market with new, inexpensive supply and effectively pricing out the natural gas plants (the wind projects are less costly to operate, so they'll likely stick around, but new ones will not likely be built).

This cycle is immediately predictable to anyone thinking about how electricity generation works. It ensures that market demand is met in times when large new plants cannot be economically justified, and helps to communicate the need for new investments (whether in large plants or small ones) through the price mechanism. In short, the cycle is an illustration of comparative advantage at work.

Hopefully, anyone reading the above will be thinking, "Wow; it's really neat that the price mechanism is able to coordinate different technologies to satisfy the different needs of electricity consumers as they change over time! The big plants are built when they're needed, and there's a way to address consumer demand when those plants aren't economical -- that's great!"

But not the Electricity Advisory Committee! They write:

...large baseload capacity projects are limited to those times when demand and prices are significantly higher, thus reinforcing the cyclic investment process. Making new projects economically viable during lower demand growth periods will require policies and actons designed to stabilize investment returns, capacity, and energy prices.

There's only one coherent response to this statement: AAAAUUUUUUGGGGGHHHHHH!!!!!!!!!

On the FCCC's (and by extension, the IPCC's) Focus on State Decision Making

So I almost feel bad about this, but it's not really my fault. The IPCC put out a report in 1995 called Climate Change 1995: Economic and Social Dimensions of Climate Change; it was the contribution of the third working group to the Second Assessment Report. Normally, a used hard bound copy of the book will run you over $50; more if you want it in good condition. But because apparently some people don't understand what their goods are worth, I was able to utterly swindle some poor online merchant for a nearly immaculate copy for $20. INCLUDING SHIPPING! I've said it before and I'll say it again: I love imperfect information!

I've just started reading it, and let me tell you: these guys are good. They basically have everything they say so qualified that it's nearly impossible to disagree with it, no matter where you're coming from. But one thing has made me a little uncomfortable in these early goings (and it may just be because I'm overly sensitive to this kind of thing).

In its chapter on "Decision-Making Frameworks for Addressing Climate Change," the IPCC authors basically frame the issue of climate change as entirely something that is to be addressed through international political decision-making, embodied by the Framework Convention on Climate Change. The IPCC authors note that "First and foremost, the FCCC is a framework for collective decision making by sovereign states." They then acknowledge that for different states, different kinds of impacts will be politically important:

For example, European countries may focus most on the possible costs of abatement, whereas developing countries in Africa and South America may be most concerned with the burden of adaptation and vulnerability. Island states may be most threatened by a major loss of coastal land mass. Oil exporters may be most concerned about their potential loss of revenue from abatement strategies that reduce international fossil fuel consumption. An understanding of such differences in national perceptions, capabilities, and objectives must inform the decision process, particularly where those decisions must be reached collectively.

It seems to me that this focus on intergovernmental politics leaves out an important consideration, which is that large-scale collective action is only one tool with which societies can solve social problems. The IPCC neglects to discuss the importance of other tools, like community action and private activism. It seems to me that this way of looking at things sets up a dichotomy between "Fixing it!" and "Doing nothing" which cannot help but result in vast government intervention. I would expect a more balanced approach to the issue of climate change to be built on the foundation of recognizing that giant world governments can't always effectively solve problems, and that a part of the solution will need to come through other avenues.

I also worry that by framing the problem as a matter of political negotiation, the IPCC might be encouraging a paradigm which gives State decision-makers the power to treat their citizens as bargaining chips, rather than focusing on protecting them from mistreatment by the citizens of other countries and by other individuals within their own countries. As Paul Baer writes in his essay, "Adaptation: Who Pays Whom?":

...ethics and justice address the rights and responsibilities of individuals; obligations between countries are derivative, based on the aggregate characteristics of their populations, and pragmatic, given the existing state system.

Since climate change ultimately will be addressed within a social order which depends in large part on States to affect social change and to coordinate policy, I acknowledge that political bargaining will play a central role in any response to climate change. But to therefore think of the issue at hand as one of mere bargaining seems cynically realist and completely out of line with any coherent normative position. We all know what happens when issues are reduced to matters of mere bargaining: concentrated benefits and dispersed costs.

The thing is, though: much of the rest of the report does focus on the ethical considerations which should go into the decision-making process. So the realist "national interest"-based discussion in the early goings here seem like they might simply be at odds with what will be discussed later. I'll try to remember to post a followup to this post if the report starts to move away from this way of talking about things. But I figured it was worth pointing out while it's on my mind.

On Clean Coal (Or the Lack Thereof)

[Reposted from University and State]

I have a confession. There's something that's been eating at me for a long time, and I need to get it off my chest before my soul caves in on itself and I break a television in a rabid fury. I HATE THIS COMMERCIAL:

I'm saying this up front: this post is going to be way longer than is reasonable for a response to a tiny commercial. But someone needs to say this, so I'm saying it.

Let's dig a little bit into what's going on here. This Is Reality is a collaborative project between a number of environmental advocacy organizations, but I think it's pretty clear who's ringleading this operation: Al Gore's advocacy group, the Alliance for Climate Protection. So because it would be impossible to direct my ire at all of the organizations behind this commercial (since they all have different positions), and because the website for This Is Reality is filled with links to other Alliance projects, I will point my comments at the Alliance.

The Alliance has two other projects besides This Is Reality which represent its constructive alternative to the use of coal technology to generate electricity: We Can Solve It and Repower America. But to understand what they're talking about, it will be necessary to get some background on how electricity is currently generated. So here it goes:

Electricity demand fluctuates on a daily basis, like this:

Source: http://www.reliant.com/en_US/Platts/art/CEA_offices_fig1.gif

That's not actually an observation of demand; in reality things are a lot choppier. But the basic point you should take from it is this: during the work day when people are running lots of electricity-intensive equipment (and particularly in the summer and winter, space heaters and air conditioners), there's a rise in the amount of electricity demanded. You'll notice that there's a minimum amount of electricity that is always needed but the grid at any time of day. This daily minimum amount of power is called the "base load." And there's also a cyclical daily hump in electricity demand, called the "peak load."

Currently, base load is predominantly generated by large, centralized coal and nuclear plants (and some hydroelectric plants). These are by far the cheapest fossil fuel plants to run in terms of marginal cost per unit of power generated. But they have an important and inherent limitation: they can't ramp their output up and down very quickly. So they just chug along, producing the daily minimum amount of power around the clock.

Peak load can't be met effectively by these large scale plants, and that's where we find "peaking" or "cycling" plants. These are predominantly natural gas plants with some diesel reciprocating engines thrown into the mix. Natural gas plants are like enormous jet engines, and reciprocating engines are like giant motors; they can both be ramped up and down relatively quickly, and are therefore better suited for handling intraday fluctuations in demand, even though they cost more to operate.

So remember: Base load is the electricity that the grid needs around the clock, and it's produced in huge coal and nuclear plants (as well as hydroelectric plants). Peak load is the electricity that the grid needs to meet intraday fluctuations in demand, and it's produced in smaller natural gas and diesel plants. It all works out so electricity generation comes out looking like this (chart from 2006):

Source: http://upload.wikimedia.org/wikipedia/commons/d/d4/ Sources_of_electricity_in_the_USA_2006.png

As you can see, coal generation makes up about 50% of our current electricity production. So now I think we can turn to the Alliance's proposal, from its Repower America project: "100% clean electricity within 10 years." What's going on here? Exhibit A: There is no such thing as clean coal. Exhibit B: We want 100% clean electricity within 10 years. Exhibit C: America currently generates about 50% of its electricity from coal plants, and a large majority of its baseload power.

So how, exactly, do they plan to eliminate all of the coal generation capacity in America in 10 years (never mind all the other fossil fuel generation which likely gets the label of "unclean" as well)? Repower America has a four part plan. But before trotting it out, let's look at exactly what they're trying to do, using their own graphics:

...Yea. So here it goes:

Step 1: Energy Efficiency. Now, the Repower America authors rightly cite a Department of Energy document forecasting an increase in American electricity demand by about a quarter of current use over the next two decades. To counter this, the authors propose that 28% of future electricity demand be cancelled out by efficiency gains. Let's give them the benefit of the doubt (I don't feel like fact-checking this one), and suppose that this can be done. We're saying, then, that we can keep electricity demand essentially flat over the next decade while this transformation is supposed to take place. So now we're sort of at square one: we're supposing that energy efficiency will not make the problem any worse, but we haven't made things any better yet. I don't even want to begin to think about how much it would cost to eliminate 28% of American electricity demand with energy efficiency measures. We're not talking about changing light bulbs or installing better windows. But more power to them if they can do it. Okay then, we're at flat electricity demand for the next ten years; three steps left to replace coal!

I think it'll be useful, before moving on, to quickly adjust the figures to take out the influence of energy efficiency, to normalize the contributions to actual energy produced (which should roughly match up with today's total demand). In the Repower America Scenario A, solar photovoltaics, biomass/municipal, and geothermal will be relied on for 4% of electricity production each, wind for 37.5%, and solar thermal with storage for 18%. Notice that today, these technologies combine for only 2.4% of total production. If the Alliance gets its way, we have a lot of work to do in 10 years, and it's going to be expensive! So on now to step two, where we find out how they're going to produce all that power without fossil fuels.

Step 2: Renewable Generation. And I quote: "Generate 100% of US electricity from truly clean carbon-free sources. Renewable energy generation technologies like solar thermal, photovoltaics, wind, geothermal and biomass have been adding clean reliable power to the grid for more than a decade...It is now time to dramatically ramp-up the contribution of renewables to the energy mix." Now, conspicuously absent from that list is hydroelectric power, and for good reason: there really isn't much potential for expansion there (and there are also some important environmental concerns associated with the dams that are used to generate it), and the authors accordingly hold hydroelectric generation constant in their analysis. Even more conspicuously absent is a word barely mentioned in the Repower America plan: "Nuclear." Even though nuclear electricity generation produces no CO2, is projected to increase substantially in coming years, and is currently the only major existing large-scale alternative to coal for baseload power, the authors hold nuclear generation constant as well.

We'll touch on this point again later, but for now, it will be useful to once again jiggle the calculations. So let's cancel out the influence of nuclear and hydroelectric generation, which account for roughly a quarter of total electricity production today and in the future according to the Repower America scenarios. What's left is the current influence of renewables and the fossil fuel generators: coal, natural gas, and petroleum; together they account for about three quarters of the total power generation, and we'll call this the "flexible space" (since apparently we're holding the other quarter fixed). In the future, renewables will ostensibly fill this entire space, even though they only fill about 3% of it now. Currently, the space is two-thirds filled by coal, a quarter filled by natural gas, rounded out by a 2% contribution from petroleum. In the Repower America plan, we get solar photovoltaics, biomass/munipal, and geothermal each on the hook for 6% of the flexible space, solar thermal for 26.5%, and wind for 55%.

I want to focus on the fact that "Other Renewables" make up a whopping 2.4% of electricity generation today. In spite of all the hype, this is not actually all that surprising, as there are three main hurdles facing renewable energy generation technologies today. 1) They are generally more expensive than conventional methods of generation; 2) It is often the case that the ideal places to generate electricity from renewable resources are not the places where people live, and it is expensive to build transmission lines that can carry electricity over long distances; and 3) The generation characteristics of many renewable technologies are such that electricity is either not produced consistently and reliably, or production cannot be coordinated to respond to demand. Because we're dealing with a one-dimensional analysis (that is, preventing climate change is clearly the only thing that matters to these people, no matter the cost), we'll just throw out (1) for now. Who cares what it costs! But how does Repower America respond to (2) and (3)? We need to go to the last two steps to find out.

Step 3: Build a Unified National Smart Grid. Because renewable energy is often produced far from demand centers, Repower America proposes to build a giant system of transmission lines across the entire country in order to ensure that renewable energy can be integrated into the grid. Remember, kids: cost is no object; we're fighting climate change! So now, and I quote: "It will allow us to connect solar power in Arizona with manufacturing centers in Ohio or allow us to use evening wind power on the East Coast to support late afternoon peak demand in Nevada." So what're we looking at for a price tag? American Electric Power drew up a proposal for something like this at the behest of a group of wind power advocates, and projected the cost at $60 billion (or about a half of a percent of US GDP, or six months in Iraq). But I should note that AEP's plan was based on producing enough transmission capacity to allow wind power to reach a 20% share of America's electricity needs; I'm not sure the transmission system they've described could handle the kinds of transfers that would be needed to make 100% renewable energy feasible. But remember, cost is no object, and this apparently can be done.

So now we're a little closer to seeing how coal could be replaced, but there's still an important hurdle: many renewable energy sources are either inconsistent and unreliable, or don't produce energy at the same time that it's demanded.

A little more background is needed here. As I said before, some of the biggest problems with renewable electricity generation from technologies like wind and solar have been about timing and control. For example, photovoltaic solar generators only produce energy during the day, and they can't really be adjusted to produce only the electricity that you need. During the summer and winter, when there's a lot of space heating or air conditioning going on, that doesn't matter too much. Most electricity use happens during the day anyway, and grids can pretty much use whatever electricity they can get during those times. But in the spring and fall, when intraday fluctuations are smaller, those operating characteristics aren't particularly helpful. From one study exploring the impacts of large-scale use of solar generation:

Source: http://www.nrel.gov/pv/pdfs/39683.pdf

Source: http://www.nrel.gov/pv/pdfs/39683.pdf

As you can see, in the second chart, the contribution of solar energy drops the residual peak demand (that is, the demand during peak demand periods after the impact of the contribution from the solar generator) significantly below the normal daily minimum level. If this electricity were going to be used by the system, the baseload plants would need to be ramped down to the new minimum levels, and expensive peaking plants would need to fill in the gaps. Needless to say, this wouldn't happen; utilities would just dump the extra power. This means that if solar power were going to be implemented on a very large scale, it would need to be profitable even with the use of only a portion of the electricity generated by the systems. Looking at wind generation, one can see that the problem is exacerbated by the fact that wind generation doesn't necessarily line up with the peak demand period for a grid. One example from New York yielded this result:

Source: http://www.nyiso.com/public/webdocs/documents/white_papers/ wind_management_whitepaper_11202008.pdf

At least part of the rationale for the National Unified Smart Grid seems to be the idea that power can be sent from areas with unneeded excess generation to those where the electricity can be used, so that something along the lines of a "law of averages" approach would help to ensure a more stable grid system. But can wind power really be relied on the carry the burden of base load? I'm not sure. Remember, of the flexible space in the area of generation, big baseload coal takes up about two thirds of the generation we need to replace. Solar thermal, which apparently can be effectively (if expensively) utilized for baseload power when combined with storage technology, is being relied on for 26.5% of the space. The 6% each taken up by biomass/municipal and geothermal could ostensibly go towards base load requirements as well. But we need to acknowledge that wind is being asked to do a whole lot of work here, and I'm not entirely sure if that's realistic.

And unlike natural gas and diesel plants, it appears to me that none of these technologies can be dispatched on the scale that would be necessary to completely address jumps in peak demand. You simply can't just demand that the wind blow harder or the sun shine brighter. If a heat wave comes along and the wind is dead along the West Coast while people are blasting their air conditioners like there's no tomorrow, we need a source of on demand power. Natural gas currently serves a very important role in bringing flexibility to the grid. It doesn't appear to me that there's any generation technology with that characteristic in the Repower America portfolio.

A piece of the solution to this problem is provided by the "Smart Grid" component of the "Unified National Smart Grid" plan. This basically mirrors the Department of Energy's vision of the future of the electricity grid, and involves the use of smart metering technologies and communication between utilities and end-users of electricity to allow for "demand response" programs. This would allow utilities to tell their customers in times of system stress or unexpectedly high demand that they should reduce their electricity consumption. Utilities would generally pay customers to do this, and some plans include the ability for utilities to remotely control some of the appliances in their customers' facilities in order to initiate these drops in demand instantaneously. But there's a limit to how effective a demand response program can be. Ultimately, it's an important part of the job of a utility to be able to provide electricity on demand, and relying on customers to put up with unavailability of electricity is simply not a feasible option.

What's needed to make this plan technologically feasible is an effective form of energy storage. This would allow grid operators to build up energy reserves to respond to unexpected changes in supply or demand which could not be remedied by the almost nonexistent responsive capacity of a generation portfolio pretty much entirely dependent on resources which can't ramp production quickly up and down when needed. And that's where the final step comes in.

Step 4: Clean Plug-in Cars. When I saw this, I first thought, "Here is where, as they say, the plan jumps the proverbial shark."

The way that Repower America apparently expects to provide added stability to the electricity grid of the future is to basically use plug-in electric hybrids as batteries which can be charged when excess electricity is available, and drawn upon when electricity is needed by the grid. Now, a lot of people are talking about this as an important part of our energy future, and I'm one of them. I think plug in cars are a great idea. But the authors at Repower America are nuts if they think that the adoption of plug-in hybrid cars widespread enough to bring about this kind of energy storage capability would be consistent with their use of the Department of Energy's projection of electricity demand! A large plug-in hybrid fleet (in addition to taking longer than 10 years to materialize) would put an enormous strain on the electricity grid, forcing the already tenuous production of electricity from only renewables to somehow come up with thousands or millions more gigawatts of electricity. Perhaps it could be done; after all, we're not taking cost into account, remember?

But it's at this point where we really have to step back for a moment and ask ourselves, is this really what we think is going to happen? Even if we really want to stop climate change, does it make sense to try to completely eliminate fossil fuel technologies from the electricity generation landscape? Should we really just close the doors on billions upon billions of dollars in infrastructure investment? Is it really the best idea to try to force utilities to stop using coal, natural gas, and diesel to power their grids (or to offer them the money to convince them to do it voluntarily)? OF COURSE NOT!

So now we can finally get to why I hate that frikkin' commercial. There is such a thing as CLEANER coal technology, and we'd better darned well be ready to work towards implementing it! And we'd better keep an open mind towards expanding the use of cleaner natural gas and petroleum generation (which can be more energy efficient than coal) as well! And we SURE AS HELL better start building nuclear plants!

Smaller, decentralized coal plants can be used to provide heat to nearby buildings and homes, typically producing energy efficiencies much higher than can be achieved at large, centralized plants. Natural gas turbines typically operate at higher efficiencies as well, and they can be harnessed for combined heat and power too. By gasifying coal, petroleum coke, and other carboniferous feedstocks for use in Integrated Gasification Combined Cycle (IGCC) plants, we can also increase energy efficiency, even if we don't use the more concentrated resulting CO2 exhaust stream for Carbon Capture and Sequestration projects. Higher energy efficiency means less CO2 emitted, and doesn't necessarily force us to completely abandon cost-effectiveness. Looking for synergies for the use of waste CO2 could also be part of a solution. By burying our heads under the sand with a proposal to completely eliminate fossil fuel technologies, we draw attention away from these critical possibilities, and ultimately obstruct their development and implementation.

Nuclear power is CO2-free, and also needs to be a part of the answer. We simply can't expect to replace all of our baseload coal capacity without relying on nuclear power to help fill in the gap. To be sure, the increased use of renewable resources will need to be a huge and central part of our energy future. But to expect it to be the only part is flat out ridiculous, and trying to convince the American people otherwise is simply unreasonable and counterproductive.

Like it or not, we need fossil fuel technologies to meet our energy demands. And in addition to the technological feasibility we've discussed so far, and the monetary cost, that's because we're not going to employ the entire frikkin' country and its resources producing renewable generation facilities for the sole purpose of preventing climate change. Perhaps the most grating part of the Repower America plan is its repeated focus on job creation.

Here's something to chew on: When people consume their income, they consume goods and services that are produced by everyone else. If a substantial percentage of people are employed removing our existing infrastructure and replacing it with new infrastructure that serves exactly the same needs as the stuff that was there before, then it means that the people whose products are being consumed by the "green workers" are getting nothing in return for what they created. Imagine that Tom, Dick, and Harry are an economy. Tom produces food, Dick produces liquor, and Harry produces dirty magazines. At the end of the period, Tom, Dick, and Harry each have enough from selling to the others to end up with enough food, booze, and porn to go home happy. Now in period two, the government hires Harry to replace Tom's and Dick's doors with new doors that are no different from the old doors, except they're better for some reason which doesn't directly impact Tom or Dick. Tom and Dick still produce their food and booze, and the government taxes them to pay Harry for his services. Harry ends up with some food and some booze, but not as much as before, and Tom and Dick are in similar situations. And no one has any porn! What a terrible shame! So we can talk about jobs all we want, but what's really important is that at the end of the day, what goes around is what people produce. And if people are producing stuff that doesn't do anyone any good, everyone ends up worse off for it.

Now, it will immediately be countered that talking about costs is well and good when we're thinking about what to make for dinner, but climate change is a matter of justice. And while that would shift the debate away from my objection, which was that it's infuriating that Repowering America keeps harping about its plan's potential for job creation when it's undoubtedly going to make people generally worse off, I'll grant the point. The debate about climate change ultimately does come down to a question of ethics. But as Tom Athanasiou and Paul Baer point out in their book, Dead Heat: Global Justice and Global Warming, "The real issue, even ethically, is what will work..." (118). And this plan being pushed by the Alliance simply won't work.

Going a step farther, I defy anyone to give me a legitimate ethical argument which ends in the conclusion, "...and therefore, we must repower America with 100% clean energy in ten years, or else we will neglect our moral duty." I can't believe I'm about to sound like Bjorn Lomborg (*shudder*), but I'm not stopping myself. Watch:

Much of the climate change we can expect in the future is already in the pipeline. Taking a slower approach to reducing emissions, and embracing our need to maintain some carbon-intensive generation, would produce enormous efficiency gains and seriously accelerate progress in other areas of our economy. If we took some of the hundreds of billions or trillions of dollars that we would save by not implementing Al Gore's plan, and put it towards fighting malaria, restoring the rainforests, researching AIDS, promoting better energy efficiency in the developing world, and helping those who will need to adapt to the now inevitable impacts of climate change, we could likely do a lot more good in the world, even from the perspective of dealing with the impacts of climate change. Further, our descendents would likely be richer and better able to deal with their changing climate, and to help those who were not brought along by the rising tide of economic prosperity.

I'm not saying that nothing should be done to fight climate change. But driving our entire economy into the ground in order to fight a problem which is already partly out of our control doesn't seem like it's the best answer from anyone's perspective: even the victims', and even the environment's. We can be more energy efficient. We can use less coal and natural gas and oil. We can learn to harness the sun and the wind and the soil. We can learn to live as responsible members of the biotic community. But we have to learn to do that. And everyone will be better off if we don't rush ourselves into a more impoverished lifestyle to make it happen. Remember, before we were comfortable and well taken care of, the environment was the last thing on anyone's mind; look at China.

And remember, we're saving the world for future generations. Imagine if the industrial revolution had been stopped to prevent mercury poisoning. 'Nuff said.

So in closing, I hate that commercial because it represents a loss of perspective. It takes an important issue and reduces it to a set of overly simplistic talking points. We need to address climate change, to be sure. And that means a shift away from CO2-intensive electricity generation and towards renewables and clean technologies. But taking half of the most reasonable and important responses entirely off the table is irresponsible and counterproductive. It makes it so I end up talking to people who say, "No! No new coal plants!" instead of, "Is the plant going to produce combined heat and power?" And that's a problem, because if they scream about wind and solar, the utilities are going to laugh at them, whereas if they scream about capturing the heat stream for the benefit of the community, they might actually end up having an impact. The commercial makes it so the people who care most about fighting global warming get the absolute wrong idea of how to go about doing that. And that's a darned shame.

Update:

For anyone interested, the current breakdown for electricity generated from renewable resources by technology is as follows: Biomass electricity accounts for about 1.1%, wind for 0.6%, geothermal for 0.3%, and solar for about 0.01%. Hopefully that puts the Alliance's plan in a little better perspective.