11.09.2009

Human Ingenuity: The Real Renewable Resource

A recent advertising campaign by the natural gas industry lobby, America's Natural Gas Alliance, states (paraphrasing), "we have a 100 year supply of natural gas and it's growing all the time," and that "we can't revitalize our economy by buying overseas oil," and that "natural gas is twice as clean as coal," and is thus much "greener."

As different sectors of the energy industry try to compete in today's hyper-regulated non-market, this pandering to both environmentalism and mercantilism ("energy independence" is the new "buy American!") is becoming a common strategy. It's an unfortunate, pragmatic, but also understandable reaction to a market that gets less free with every session of Congress and every presidential term.

The crushing weight of governmental regulation isn't the only thing industry is reacting against. As the government dedicates millions of redistributed dollars to "renewable" energy and "green jobs", thus denying legitimate, voluntary investment in the best available opportunities, it's not surprising to see real businesses respond to the distorted market by trying to offer options that try to take advantage of the situation. Producers still need to respond to demand in order to survive and profit, even if government distorts the demand beyond all reason.

An industry that raised the standard of living in not just the United States but in the whole world by a nearly immeasurable margin -- the petroleum industry -- has been demonized by the environmental lobby for decades, and attacked on all sides by government regulation and "reinvestment." And instead of developing a vibrant "green economy," such interference has only inflated energy prices, stifled real innovation, and wasted billions of dollars. Recall that Jimmy Carter tried to birth the solar power industry and its continued failure even during supportive later administrations cannot be dismissed as a partisan issue, or one which simply needs more taxpayer money thrown at it. Decades of government support for renewable energy has gotten us nowhere. [As a side note, if you happen to disagree and think that the oil industry is only an exploiter of the poor and of the environment, may I suggest some required reading?]

Assuming for the moment that we really do need "energy independence" and "green energy," and considering that government involvement has not solved these "problems," what are the alternatives? There just so happens to be a socio-economic system that has been proven throughout history to be perfect for handling just such quandaries.

Capitalism unleashes the political and economic possibilities of the best within humanity. All of the creative, positive, progressive aspects of human activity are fostered -- not oppressed -- by the socio-political framework of capitalism, which means the system that fully and consistently protects individual rights in all areas of human interaction, leaving men free to produce, to solve problems, and to make enormous sums of money in the process. Nearly every modern convenience and life-sustaining technology that we take for granted today is ultimately the product of men who were free, at least in part, to use their minds, to innovate, and to produce.

On the other hand, nearly every seemingly unsolvable socio-economic problem we face today can be traced to government interference. In the energy sphere, government distorts the market by restricting free inquiry and pushing an environmentalist agenda. Using redistributed dollars, government actively promotes one type of solution while regulating others out of existence. Individual rights and the freedom of supply and demand are ignored as irrelevant, while government directs private industry toward supposed socially- and environmentally-friendly goals that continually fail to deliver real return on investment (even the pseudo-investment of "public" dollars). Solar cells, windmills, etc., are subsidized again and again, despite the fact that the market is never there, and the desired innovation never comes.

But it is certainly a fact that there is only so much petroleum on the Earth, and at some point, someday, it could run out. What this should say to a free people is that there is a potential market there for someone ingenious enough to capture it, when the time is right. Is so-called renewable energy the place to look? Who knows? But it certainly isn't the government who knows.

Let us look at renewable resources themselves for a minute. Admittedly, wind is wind, and sun is sun; these things are "renewable" in that they will continue to be available in essentially their current forms until the Earth ceases to exist. But nothing about this means that they will necessarily be economically useful right now, or will benefit human life in the same way that petroleum has. They certainly may, someday, but only on their own timeline, as determined by the individual efforts of creative men, the needs they face, and the values they want to gain.

Was sunlight a useful energy source a few million years ago in the same way we think of energy now? Obviously not. What about wind? This is even more absurd. Wind was more of an enemy -- feeding wildfires while killing cooking fires, chilling bodies, blowing away seeds and arrows -- than it was a useful resource, though it was as plentiful then as it is now. The sun and the wind thus share something fundamental with any other resource. Imagine early Homo sapiens stumbling into a pit filled with a black, viscous, smelly liquid. What good was it to him?

Oil, just like sun and wind, is simply an obstacle until and unless the human mind reshapes it to its own purposes. Obviously, the human mind, reason, and ingenuity are the only things that can transform inanimate matter into life-sustaining values.

Human ingenuity, not wind, not sun, is the only truly renewable resource. Without it, nothing in nature would be transformed to further human life. Your car, your clothes, your food -- none of these things are naturally occurring. If all we can do is take what we get, then we are but hunter-gatherers without tools or any remnants of cognition to help us along. But because humans are rational animals, we can identify the materials in our environment and mold them to suit us.

Be it stones or soft metals or iron or oil or electricity or fusion -- or the sun -- the human mind is the inexhaustible resource that makes all others possible. It is time for the government to recognize this alternative energy source, and to unleash it fully upon the world by getting the hell out of our way.

5 comments:

Moataz said...

very true and its time the oil industry stood on some god damn principles and stopped with their pragmatism. I still recall that congress hearing where the politicians were furious as to why the companies were raising gasoline prices. O'Reilly was crying about it too. Problem is people don't want to live in a market environment and don't want happiness for others. Very sacrificial culture.

Brian Fritts said...

Thank you for posting this. It always amazes me how people view economics and life as some sort of zero sum game.

I was arguing with a high school friend about this recently. He is an academic librarian and has had no connection to the business world whatsoever. He found it absolutely amazing that I would characterize most of my business dealings as mutually advantageous and the hallmark of cooperation.

He really believes in the conflict/power paradigm touted by much of the social science establishment.

C. August said...

Interesting connection, Brian. The conflict/power paradigm you mention is at the core of postmodernism. I've started to read up on postmodernism since I posted the "socialism evolution chart."

The book I'm reading, "Explaining Postmodernism" by Stephen Hicks, has been fascinating so far, and this passage is what I thought of when I read your comment (pg. 14-15):

"Postmodernism’s essentials are the opposite of modernism’s. Instead of natural reality—anti-realism. Instead of experience and reason—linguistic social subjectivism. Instead of individual identity and autonomy—various race, sex, and class group-isms. Instead of human interests as fundamentally harmonious and tending toward mutually-beneficial interaction—conflict and oppression. Instead of valuing individualism in values, markets, and politics—calls for communalism, solidarity, and egalitarian restraints. Instead of prizing the achievements of science and technology—suspicion tending toward outright hostility.

That comprehensive philosophical opposition informs the more specific postmodern themes in the various academic and cultural debates."

Harold said...

"As different sectors of the energy industry try to compete in today's hyper-regulated non-market, this pandering to both environmentalism and mercantilism ("energy independence" is the new "buy American!") is becoming a common strategy. It's an unfortunate, pragmatic, but also understandable reaction to a market that gets less free with every session of Congress and every presidential term."

Indeed. And when you have thousands of employees and have hundreds of millions of dollars of capital investment to manage over the next several years, you tend to look for "stability" and "certainty"--even (or especially) with regard to governmental regulation. Of course, with these concessions the stage is set for even more controls in the future.

"Admittedly, wind is wind, and sun is sun; these things are "renewable" in that they will continue to be available in essentially their current forms until the Earth ceases to exist. But nothing about this means that they will necessarily be economically useful right now, or will benefit human life in the same way that petroleum has."

That's a very important point. Just because there's a lot of something doesn't necessarily mean it has great value. That fact is often missed or ignored.

I work in the oil business and can tell you there's a "hang me last" mentality among many otherwise very clear-thinking business leaders. Instead of principled moral arguments delivered by company representatives, we hear duty-based slogans about "environmental stewardship". When local agitators, otherwise unemployable university lawyers, and the intrinsicists in the environmental movement are on the offensive and the men of ability are apologizing for their existence you know that a great moral inversion has taken place. Honestly, it's sad to watch.

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"O'Reilly was crying about it too. Problem is people don't want to live in a market environment and don't want happiness for others."

I remember that. He was saying that oil companies should give up (what does that entail?) 10% of their profits for the "good of the country". Unbelievable.

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"He really believes in the conflict/power paradigm touted by much of the social science establishment."

All too typical. Lol, what does he think trade is? Thanks for sharing this.

Moataz said...

how would you make principled moral arguments regarding the environment?

I would imagine that you would need to point out that environmentalism is evil and display their contradictory actions first and foremost.

Then recognize and adopt individual rights as a second point. Perhaps also emphasize human ingenuity as an important cornerstone. I think anything that talks about the science of global warming is seceding the point to the eco nuts.