Libertarian Girl

It was expected for awhile, but this week, Toshiba finally abandoned HD-DVD, meaning that Blu-ray will be the next-generation DVD format of choice for those wishing to upgrade on the current style of DVDs.

Why did Blu-Ray win out? It’s a better product, with a better name, bought by more customers. It’s as simple as that. Free market capitalism in a pure form. There were no government subsidies for the inferior product of HD-DVD, no regulations set by the state that Blu-Ray couldn’t meet or that make it too expensive for consumers, and now that HD-DVD is dying, there will be no nationalization of HD-DVD. This is how it should be. Let the good products and companies win and let the bad ones die out, and don’t create so many regulations that new companies can’t spring up to take the place of dead or dying products and companies.

That’s why I’m troubled about what is usually called “the greatest challenge” of creating “alternative energies” to combat climate change. The goal is laudable, definitely. However, many well-intentioned people want to discourage reliance on foreign oil by using government funds to subsidize alternative energies, renewable fuels, and “clean” energy sources. Frankly, this is a disaster waiting to happen. The fat cats in Washington simply do not know more about what alternative energies will work and which won’t than the free market. The economist Bettina Greaves put it very simply: governments look to the past, while entrepreneurs must look to the future to survive. What if hydro-electricity is subsidized by lawmakers, but in the end, wind energy is the better product? Hydro would win out, because it doesn’t have to be the better product that people will actually pay for in the free market. Wind energy would not survive and would not be available for those who wanted it and knew it was better.

What if both (or all!) forms of energy are subsidized? That would mean that we would go bankrupt subsidizing the ones who are forced through taxes to subsidize other things. Even worse, it would mean that a new kind of energy– some form that hasn’t even been invented yet– would have to compete against those government subsidies and most likely wouldn’t be able to. Why would anyone create a new form of energy with their own money, even if it’s a better product, if it wouldn’t be able to compete against government-backed forms of energy, which may not be as efficient? It’s very, very difficult to compete against something that is subsidized by the government, which is why lobbyists in Washington are busy trying to get our legislators to subsidize anything and everything.

Unlike entrepreneurs, governments don’t have to look to the past to make accurate decisions about the future– they just have to look to the polls to see how to get elected this year. The government never would have recognized that two brothers who owned a bicycle shop in Ohio would be able to develop and build a flying airplane faster than anyone else, and why should we expect that the government can now figure out, in advance, who will create new environmental technologies and what exactly those should be? What environmentalists are trying to legislate is akin to the government of 100 years ago mandating what the design of the first airplane would be and who would build it– and they would not have been as successful, because only a free market of innovation could result in the Wright Brothers making their first plane. If the government was paying other people to create the kind of airplane the government had mandated would be able to fly, the Wright Brothers might never have tried to invent the plane in the first place. Perhaps we would have gotten a worse design for the first plane, much later.

You can see, then, why I’m always wary when I receive something in the mail about the environment and how it must be “saved” through government regulation. Our federal government (the same people that brought you cash in the freezer, FEMA’s bureaucracy, bought-and-paid-for legislators, Halliburton and all) is somehow thought by so-called environmentalists to be the ultimate beacon of knowledge for somehow creating a magic fuel that will run everything while having no cost to anyone or anything– your wallet or the environment. The same people who don’t trust the government to be able to clean up after a hurricane think that this same government can– with no missteps or kickbacks to contractors– develop and direct the creation of something as important as a complete alternative to oil. This is ridiculous.

Let’s take Great Britain as an example. The UK government’s “business secretary” said last month that the government’s own wind power mandates passed by Parliament created “an opportunity for this country to develop its own technology.” I ask you this. Did any government, UK or otherwise, have to pass a mandate to develop the car? Did the government develop the transistor, which allows most modern technology such as cell phones and computers to run, or pass a mandate to develop a transistor by a certain time period, or even have any idea that something called a “transistor” could be invented in the first place? Did the government mandate that someone they chose had to develop electricity by a certain date? Did the government even develop the dishwasher? The government didn’t have a hand in any of these technologies, and they were created in the free market as a benefit to everyone, quite successfully for everyone all around, precisely because the government was not involved. The government, in contrast, has created the nuclear bomb and taxes. How’s that for a track record? Why has the government earned the right to develop our new environmental technologies? Who is crazy enough to leave this job to them?

Personally, I can’t take seriously anyone who says anything about saving the environment unless they personally do the single best thing anyone can do for the environment and become a vegetarian.The latest plea I received in the mail from trendy environmentalists (who like to talk a good game but never manage to put their money where their mouth is) comes from Paul Newman and Joanne Woodward, who beg me to contact Congress about the Lieberman-Warner Climate Security Act. The problem is, the act in question is nothing but massive corporate welfare to coal companies, as any type of carbon trading or cap-and-trade system will be and has been in the European Union– with these systems, you just end up using government money to pay companies to pollute.

It’s no surprise, really. Our politicians certainly don’t read bills before sponsoring or voting on them; why should celebrities, even a celebrity philanthropist like Paul Newman, read bills of Congress before sending out letters begging people to support them? The ultimate irony is that the organization Newman and Woodward are shilling for (the Environmental Defense Action Fund) claims in the same letter that it takes no money from corporations, while asking us to beg our legislators to hand over taxpayer dollars to coal companies through Lieberman and Warner’s bill.

Tags: environmental subsidies, environment, environment free market, government regulations environment, Paul Newman, wind power subsidies, alternative energies

This entry was posted on Monday, February 25th, 2008 at 1:52 am and is filed under Environment, Free market economics, Non-free market, bureaucracy, libertarianism. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.