Published Thursday, May 31, 2012

Energy know-it-alls

Growing up, I was taught that wisdom begins with understanding that no matter how much you may think you know, there’s still an infinite amount of knowledge that you don’t.

That truth had two big effects on me in all the decades since I first heard it. One, it ignited a curiosity to learn more. Two, it made me humble. I realized that all the knowledge I’ve gained — especially about the future — is still no bigger than a blade of grass on a football field.

Yet all around us is no shortage of people who claim to know far more than I suspect they do or ever will. What’s really disturbing is that many of these know-it-alls are so confident in their know-it-allness that they want to use the force of government to impose their dreams and schemes on the rest of us. Washington is full of people who are busy planning almost every aspect of our lives, no matter how well or how poorly they might be managing their own.

Energy is a case in point. An entire religion has arisen against fossil fuels and in favor of various “green” options. Its high priests tell us that we’re running out of oil, that things like wind or solar or algae power are the way to go, and — here’s the rub — subsidies, taxes and mandates are needed to get us there.

In the early 19th century, Americans used whale oil as their primary fuel for lighting. Prices rose as the demand for whale oil grew and the supply of whales declined (they were “common” property, not private, so everyone had an incentive to use them and no one had much reason or ability to conserve them). No federal energy department existed to either plan our lighting future or regulate the problem into perpetuity. And guess what? No bureaucrat predicted it in 1850 but within 25 years, we switched from whale oil to kerosene, derived from crude oil produced by a brand new industry. Supply and demand, prices acting as signals in a free marketplace, entrepreneurs taking risks to make a buck — all of that worked beautifully.

Isn’t this what happens all the time when people are economically free? Computer chips, satellites and lasers replaced wires, transistors and vacuum tubes. Cars replaced mountains of horse manure in our city streets. If we started running out of trees, do you think we’d have to wait for a government edict before somebody would think to plant more? What makes anyone think that government regulators, control freaks and spendaholics know more about the future than do the real creators of wealth who actually have to solve problems or go out of business?

Maybe wind, solar, algae or something as yet undiscovered will prove superior to fossil fuels. I don’t know. But how will anybody know unless we let all possibilities compete freely? I can think of no good reason to substitute the judgment of short-sighted, election-focused and often power-hungry government officials over the judgment of markets.

(Lawrence W. Reed, a resident of Newnan, is president of the Foundation for Economic Education in Irvington, N.Y., and Atlanta.)

© 2011 The Newnan Times-Herald Inc., Newnan, Georgia. Any unauthorized use, copying or mirroring is prohibited.