Government as venture capitalist

by Russ Roberts on November 13, 2011

in Energy

Steven Mufson in today’s Washington Post chronicles the track reward of government picking energy winners:

Solyndra, the solar-panel maker that received more than half a billion dollars in federal loans from the Obama administration only to go bankrupt this fall, isn’t the first dud for U.S. government officials trying to play venture capitalist in the energy industry.

The Clinch River Breeder Reactor. The Synthetic Fuels Corporation. The hydrogen car. Clean coal. These are but a few examples spanning several decades — a graveyard of costly and failed projects.

Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy, but they have managed to burn through far more more taxpayer money than the ill-fated Solyndra. An Energy Department report in 2008 estimated that the federal government had spent $172 billion since 1961 on basic research and the development of advanced energy technologies.

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Invisible Backhand November 13, 2011 at 2:48 pm

The federal government has invested approximately $172 billion dollars in energy R&D activities during the period 1961-2008. Figure 2 displays cumulative federal energy R&D investments aggregated by major program for the period 1961-2008.

Nuclear energy R&D (including both fission and fusion related energy R&D) represents the largest component at slightly more than 36% of this cumulative investment ($61 billion).

The Other Energy R&D program area (principally Basic Energy Research andsimilar basic science programs intended to support the more applied energy technology R&D programs) accounts for 34% ($60 billion) of this cumulative investment.

The remaining 30% of the cumulative federal energy R&D investment from 1961-2008 is split evenly ($26 billion each) between fossil energy R&D and the combination of renewable and energy efficiency R&D.

Between 1961-2008, the U.S. federal government has cumulatively invested nearly $4 trillion dollars in R&D

http://www.wired.com/images_blogs/wiredscience/2009/08/federal-investment-in-energy-rd-2008.pdf

GAAPrulesIFRSdrools November 13, 2011 at 3:09 pm

The federal government doesn’t invest, it expends. There’s a difference and I’m tired of politicians misusing the word “invest” to euphemize and sanitize their expenditure of our money on their pet obsessions. When the projects are ineffective or inefficient scheme it’s merely waste.

When, as is more often the case, they are thinly veiled attempts to garner votes or publicity its part of the parade of high crimes and misdeamors we blithely ignore.

Bastiat Smith November 13, 2011 at 7:53 pm

Well said.

WhiskeyJim November 14, 2011 at 2:28 pm

+1

El Diablo November 13, 2011 at 3:37 pm

Thanks, Irritable Bowel, for pointing out that the federal government has wasted $4 trillion dollars of taxpayer money rewarding political cronies who pretend at research and development. This amount includes the $172 billion wasted in rewarding political cronies for pretending to research and develop new forms of energy. Great job!

Jon Murphy November 13, 2011 at 2:51 pm

Ok, let’s get some bets on how the defenders of these energy policies will respond:

3-to-1 odds “They didn’t spend enough money.”

2-to-1 odds “What about the companies that didn’t fail.”

4-to1 odds “Privately funded companies fail, too”

5-to1 odds “It’s the Chinese fault!”

25-to-1 odds They admit (or hint) they might be wrong.

Jon Murphy November 13, 2011 at 3:01 pm

8-to-1 odds Other

El Diablo November 13, 2011 at 3:38 pm

1.5 to 1 odds – It’s Bush’s fault.

khodge November 13, 2011 at 3:21 pm

“They didn’t spend enough money.”

Works for stimulus why not for R+D?

Chris November 14, 2011 at 1:43 pm

I’ll take the 4-1:

I work with VC-backed companies all the time. And the large majority of them do fail. But, that’s really beside the point.

The problem here is not that the government always invests in losing technologies. Muirgeo is right on this one — there are lots of examples of technology that started either in government labs or with government-funded research. The problem is that the government is really bad at the Venture Capital model.

VCs put their own money at risk, so they have a lot of tools to reduce the risk they’re taking. They spend a lot of upfront effort in due diligence to make sure that the investment is sound — that the technology is ripe and that the right people are running it. They are involved in the management of their portfolio companies. Their investments are set up to protect themselves so that if the investment goes bad, they still get something out of it.

The government, on the other hand, goes largely from grant applications and loan guarantees. The people making the decisions don’t have irons in the fire, so they’re not nearly as careful. They don’t involve themselves in the management and often don’t really have any idea of whether the technology makes sense — instead, they make decisions based on political pressures. And, when an investment goes south, they wash their hands of it.

SmoledMan November 14, 2011 at 3:06 pm

Exactly. No skin in the game means they can waste money over and over. No consequences. They they invoke Elizabeth Warren’s “commons” speech.

Darren November 14, 2011 at 6:59 pm

a lot of tools to reduce the risk they’re taking

And governments have monkeys with dart boards.

anthonyl November 14, 2011 at 9:23 pm

It’s not the track record but the activity.  
Only people involved in the pursuit of producing energy for consumers can make decisions about what research to engage in because only they have skin in the game.  
Markets can make decisions about energy sources and what research needs to be done.  They do it all the time!  
Pollution is a property rights issue and can be handled by the courts or arbitration.  

Zola November 13, 2011 at 2:57 pm

Track Record*

khodge November 13, 2011 at 3:20 pm

If only the federal government would spend more money then we would have some real progress.

PrometheeFeu November 13, 2011 at 3:28 pm

The government is the worst Venture Capitalist ever. Let’s say a Venture Capitalist backs a startup which happens to be a winner making billions of dollars. Well, the VC makes a big chunk of that money. Let’s imagine now that Solyndra had been a big winner making a gigantic IPO, taxpayers would have gotten… drumroll… the immense privilege of NOT paying half a billion dollars to Solyndra’s creditors! If you have money with a VC who acts like that, I recommend you pull all your money out. The whole idea that the loan guarantee program is anything like VC is so absurd that you have to wonder whether the administration is mocking us or just made up of idiots. WARNING: If your VC acts like the administration, take out your money now! Or you can give your money to me. I’ll flip a coin. If I win, I keep your money. If you win, I’ll give you a buck and your money back. It’s a heck of a lot better than the deal Obama and Chu are selling the public.

Greg Webb November 13, 2011 at 3:59 pm

Government is never a venture capitalist.

Venture capitalists take well-calculated risks that lead to a return if they do their job right. If they don’t, then the venture capitalist just lose his money.

Government does not weigh the risks. It gives other people’s money to political cronies who pretend at business until economic reality works its magic. The corrupt politicians, their political cronies, and the “useful idiots” who support them win, while taxpayers and consumers lose.

muirgeo November 13, 2011 at 4:18 pm

Again let’s just ignore the very origins of nuclear and solar power via American lead publicly funded R&D. And let’s ignore the Chinese government’s current massive support for renewable’s compared to our governments lagging support and the effects these are having on where these markets are emerging.

Yes libertarian to me means having the liberty to accept or deny reality as you please. That’s all it is.

Jon Murphy November 13, 2011 at 4:26 pm

You know, man, you’re something of a legend around the office. We talk about you all the time. For example, “He’s a total Muirgeo,” or “I gotta go take a Muirgeo,” or “Can you believe the Muirgeo is is saying?”

And for those of you who bet on “What about the companies that didn;t fail?” You win!

muirgeo November 13, 2011 at 4:36 pm

I didn’t point out companies but the very technologies themselves developed by our public dollars that subsequently allowed companies to profit from the technology. I kinda slammed you all. So, in fact, anyone who guessed what about the other companies was WRONG.

So what sort of government subsidized company are you all working for? I understand you were originally going to live under a religious subsidy. And you are going to publicly funded higher education institution. So what did you switch to?

James N November 13, 2011 at 4:46 pm

Jon, ignore the trolls, they might just slither down their holes.

El Diablo November 13, 2011 at 4:48 pm

I will ignore them. I have to take a Muirgeo now.

muirgeo November 13, 2011 at 11:00 pm

Yeah because there was no substance to the facts I pointed to…ignoring facts is all you are capable of. Yeah there was no Manhatten Project…no space program.

El Diablo November 13, 2011 at 11:11 pm

Stupid troll, I said that I was ignoring trolls, not facts. In your case, you would not know a fact if it jumped up and bit you on your Muirgeo.

muirgeo November 14, 2011 at 9:13 am

El Diablo’s definition of a troll;

Some one who repeatedly brings up facts contrary to my world view which make me uncomfortable and thus needs a bad guy label to help me with said discomfort.

El Diablo November 14, 2011 at 9:21 am

“. . . repeatedly brings up facts . . . “

LOL! Comments about Marxist ideology are not facts, Disingenuous Muirgeo. Perhaps, you would like to discuss that with Karl when you get here.

Be seeing you soon!

Invisible Backhand November 13, 2011 at 6:34 pm

I love how these self reliant randroids are using the government created internet to complain without a trace of irony.

also, Jon Murphy is a full time student, so I’m not sure what office he’s hanging around in. Campus Republicans?

Randy November 13, 2011 at 7:43 pm

So you’re saying then that the politicians should take over the running of the internet? I mean, you’re giving them credit for everything that the internet has become because a few decades ago they created a packet switched network consisting of military bases and a few universities, right? So you must think that they could take it over now and run it better than what it is now, right?

Randy November 13, 2011 at 7:45 pm

P.S. I do give the politicians some credit for allowing the lines to be used for private uses. You know, maybe there’s a lesson in there for them… if only they weren’t so invested in learning the wrong lesson…

Invisible Backhand November 13, 2011 at 8:43 pm

No, Al Gore invented the Internet. Since he would not do private things on government time, then he must have invented the Internet as a private citizen.

Jon Murphy November 13, 2011 at 9:57 pm

I’m not a full-time student. I graduated in May. I’m a full-time economist.

muirgeo November 13, 2011 at 11:01 pm

IB,

It’s a cult around here…it really is. Reality is optional.

El Diablo November 13, 2011 at 11:11 pm

What Muirgeo!

Methinks1776 November 13, 2011 at 4:51 pm

What was that film about bringing the biggest idiot to dinner (I think it was originally a French film)? Muirdiot would be the winning idiot each time.

Jon Murphy November 13, 2011 at 4:52 pm

Dinner with Schmucks or something like that

brotio November 13, 2011 at 6:28 pm

Dinner and a (muir)Douche?

vikingvista November 14, 2011 at 12:08 am

Muirde may have mind control, but IB has *brain* control.

robert_o November 13, 2011 at 11:53 pm

“Le dîner de cons” was the French movie. It was re-adapted for American audiences who can’t read subtitles as “Dinner for Schmucks”.

GAAPrulesIFRSdrools November 14, 2011 at 8:33 am

Troll: If its a cult around here, leave and don’t let the door hit you in the Muirgeo on the way out!!!

muirgeo November 14, 2011 at 9:21 am

When does the Mothership come out of the volcano to pick up all the John Galts and fly them to Libertopia leaving us slackers to fend for ourselves?

I am hoping it’s like the day after all the Christians are sucked up out of here… leaving us non- believers behind. Because then the next day after that…. PARTY!!!

El Diablo November 14, 2011 at 9:27 am

Disingenuous Muirgeo, you have it backwards. The Christans and the Libertarians get to stay on Earth. But, don’t worry. All you Marxists are still going to PARTY. At my place.

Be seeing you soon.

With Warmest Personal Regards!

El Diablo

brotio November 13, 2011 at 6:27 pm

bwahahahahaha!

PrometheeFeu November 13, 2011 at 5:02 pm

“Again let’s just ignore the very origins of nuclear and solar power via American lead publicly funded R&D.”

That which is seen and that which is ________

“And let’s ignore the Chinese government’s current massive support for renewable’s compared to our governments lagging support and the effects these are having on where these markets are emerging.”

You mean like making solar power more mainstream in America through cheap solar panels? I really love free-riding on China, but I do feel bad for its citizens.

“Yes libertarian to me means having the liberty to accept or deny reality as you please. That’s all it is.”

I’m truly sorry that you don’t have the liberty to accept reality. It is truly sad.

mcwop November 14, 2011 at 8:28 am

Allowing the public to leverage something the government built for their own needs (nuclear bomb to destroy and wage war, DARPA to communicate), or handing out money to politically connected companies – are two totally different things.

But then you want to get the money out of politics – no you don’t and your comments prove that. People will use solar when its economical to.

Don November 13, 2011 at 7:02 pm

Russ,

You’re not playing fair! All that other stuff (well, most of it) was BEFORE that last election. Next fall, the slate will be wiped clean again, and they can start investing all over again!

BTW, Whitehouse.GOV is now taking applicants for it’s next investment opportunities. I’ve got a jim-dandy perpetual motion machine I’m working on. All I need is $128B to finish it. Just think, the ultimate clean energy source! Filling out the applications as we speak.

I’m also taking private investors, in case there’s anybody else out there that would like to send me money. Contact me directly at stu@pid.com for account information, I take direct deposits.

Jon Murphy November 13, 2011 at 10:29 pm

TAKE ALL MY MONEY! TAKE IT!

GAAPrulesIFRSdrools November 14, 2011 at 11:44 am

Do you accept Paypal?

Don November 14, 2011 at 12:42 pm

Regrettably, no. The transaction fees are too high.

Just give me you bank account number and I’ll take out what I think you’d want to invest. Saves all the trouble with the IRS, filing the paperwork with the DOE, etc.

Michael E. Marotta November 13, 2011 at 7:25 pm

It is famous that Vannevar Bush called upon the government to fund all pure research without prejudgment because we cannot know now what will pay off in the future. AT MIT Bush built a Babbage Engine just as the electronic, digital computer was being born.

The atom bomb was certainly the crowning argument that what you cannot understand can kill you – or your enemy…

But, of course, no such blank check was possible as there are more proposals than money to fund them. You have to choose. It is easy to give money to professors at a large and famous institution. Then, the counterargument is easy to make for the sole inventor being overlooked. And it certainly is your right to contact your Congressional representatives to show them what you could accomplish, if you had money. There is no objective way to sort this out, because there is no goal except the funding itself. Profitability certainly is not the standard.

steve November 13, 2011 at 9:46 pm

The internet evolved from DARPANET, a govt project. Nuclear energy does derive from government funded research. Antibiotics were dependent upon govt efforts as were the vaccines, and the efforts to spread them. Modern agriculture was heavily dependent upon govt research and assistance (bet most here have never talked with a county extension agent). All basic research is dominated by govt funding, in the US and elsewhere. Hard to think of good reasons why private enterprise would invest very heavily in basic research. Funding on the scale needed to put satellites in orbit did not exist.

Steve

Sam Grove November 13, 2011 at 10:37 pm

Modern agriculture was heavily dependent upon govt research and assistance (bet most here have never talked with a county extension agent).

Yes, the Dept of Ag sent agents around the country promoting the use of fertilizers and insecticides which have had significant environmental impact.

Ain’t yah proud?

Ubiquitous November 14, 2011 at 5:35 am

Nuclear energy does derive from government funded research.

All nuclear discoveries and research were done by private individuals in academia — Einstein, Meitner, Hahn, Szilard, Fermi, etc. Government had precisely zero to do with any of this. Because of a letter that Einstein sent to Roosevelt regarding the possible advanced state of scientific knowledge in Germany about nuclear weapons, the US government started a race to build a bomb before Germany did — the “Manhattan Project.” The idea that nuclear power or nuclear weapons were “government funded research” is to reverse cause and effect: it was academic research discoveries on the possibility of both civilian power and military weapons that the government later became interested in and decided to push in a particular direction for its own purposes.

Antibiotics were dependent upon govt efforts

A meaningless statement. Knowledge that certain molds prevented bacterial growth was known since antiquity. Modern knowledge of antibiotics stems from the work of Alexander Fleming and occurred quite by accident.

as were the vaccines,

Edward Jenner, Louis Pasteur, Jonas Salk. Private researchers doing their own research.

and the efforts to spread them.

Ah, that’s different. Yes, governments compelled people to be vaccinated once other people and other institutions created the technology. Good? Probably. But a far cry from crediting government with the creative aspect of the research itself.

All basic research is dominated by govt funding, in the US and elsewhere.

I’m sure. It’s called “the crowding out effect.” Since government chooses to redistribute people’s spending patterns into some venture it considers “basic research” there’s little reason for private investors to risk their own capital. Government, in fact, is simply choosing to risk other people’s capital without their consent.

Hard to think of good reasons why private enterprise would invest very heavily in basic research.

Ummm, profit, maybe?

Funding on the scale needed to put satellites in orbit did not exist.

Because at the time, there was no good private-enterprise reason to put satellites in orbit. The original reasons were all military related. Now, there’s plenty of private funding because many satellites are telecom related.

Chris O'Leary November 13, 2011 at 10:26 pm

DARPA is an example of an agency that is doing VC more efficiently. However, they tend to invest at a much earlier stage and in much smaller amounts.

Solyndra was basically a horribly bungled mezzanine round that never would have passed a decent due diligence process. That of course is why they had to get their money from the government; all of the smart, experienced private sector guys passed on the deal.

Scott November 14, 2011 at 8:08 am

The military gets way too much of a pass for all the money it wastes on projects. As someone who was a progressive and who has become fairly libertarian, this is the most frustrating part of it all. This is my first election season since my views have really changed. What do I get? Romney wants to start a trade war, Perry and Santorum are talking about manufacturing subsidies, money wasted by the defense department contractors don’t count as crony, hooray for torture, boo science.

Makes me feel like it might be easier to convince Democrats of the superiority of markets for solving social problems and regulating business (I know it worked on me) than convincing Republicans to actually pay attention to their own ideology.
Maybe that is why Hayek dedicated Road to Serfdom to all the socialists.
Someday, perhaps the parties will be Classical Liberals and Republicans. That would be a really wonderful thing.

vidyohs November 14, 2011 at 9:23 am

One critique, sir. Don’t confuse related activities such as planning, production, and use as being market, they aren’t.

A market has one reason to exist, and it can exist in your driveway as easily as in a special building owned by one or more people, and it can be created over electronic transmission of communications.

The reason a market is created is for two parties to meet to discuss, agree, and successfully or unsuccessfully conclude a trade. When that conclusion is reached that market is finished.

Therefore why would you assume or believe that it is a responsibility of a market to solve social problems? A market solves the matter of trade, and that is all it should be expected to do.

Social problems are the problem of a society, not a market.

Having good functioning markets without government interference facilitates the society’s ability to solve social problems. It has been a huge mistake in terms of freedom, socially, and financially for the government to be misused as a social molding tool.

I agree with you about military waste.

Don November 14, 2011 at 9:39 am

vidyohs,

I think Scott meant that the market (in a general term) will do more to improve society than a command structure.

As Adam Smith put it, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

He has seen the light, don’t through water on him for it :^).

Scott November 14, 2011 at 10:27 am

Yeah, that is exactly what I meant. Not some sort of “market-based” program like Fannie Mae or the Cal-energy market. Just the fact that when people are left to their own devices, things tend to get better for society as a whole.

vidyohs November 14, 2011 at 9:48 am

Don, close only counts in hand grenades and horse shoes, he ain’t there yet and while we congratulate him on his journey I can’t congratulate him for crossing the finish line…..yet If he gets praise for the journey only he may feel it isn’t necessary to complete to the finish line……and that would be a shame.

As a matter of fact I even object to the phrase regulate business, because that isn’t what a market does either. A market guides, not regulates, business.

To speak of regulation one speaks of a forceful authority exercising control, and a market does not do that to other markets.

The result of a market or markets, acts as that invisible (but powerless in terms of force) hand that guides business to improve its performance in the next market.

To achieve peak performance and efficiency in any market performance it should be left to the parties involved in the trade make the decisions regarding the trade. A market does not exist for any other reason and forcefully using it as a tool to mold other aspects of a culture is a disaster.

vidyohs November 14, 2011 at 10:01 am

Damn, this needs some revision and I have to run to Huntsville for a job. Will come back to the revision this evening.

vikingvista November 14, 2011 at 11:50 am

Happy filming.

vidyohs November 14, 2011 at 4:46 pm

I gave this some thought as I drove and decided it doesn’t need revision, I can defend it with reason and fact as it is.

Don November 14, 2011 at 12:59 pm

vidyohs,

Not to pick to many of your nits, but even Smith said that transactions between persons were “regulated” by the market. It’s in the introduction to WoN.

I think your problem here is that you are using the modern (common) use of “regulation” as “government interference in the market”.

While not the purpose of the market, regulation is a useful by-product. I know, for instance, what houses of a certain size in a certain neighborhood have sold for in the past, so I know what to expect for a similar house in that neighborhood. This commonality of pricing is a “regulation”, i.e. it makes the prices “regular” or predictable. I believe this is what Scott was saying, and he is correct.

BTW, I have sympathy for your hangup on regulation. I almost never use the term Capitalism because of it’s modern connotations stemming from Marx’s abuse of the word. It’s much easier to explain things to less knowledgeable people when speaking of the “free market”, not that the progressives aren’t doing their level best to hatchet that term too.

vidyohs November 14, 2011 at 4:55 pm

Sir Don,
I am not hung up a whole lot on what others have said when my own brain can work out the facts for itself.

Regulate – “to make regular”.

To make – “an action that must require some forceful manipulation”.

In the arena of human interaction the phrase “to make” must equate to compel.

Do the details of any trade I have ever made in any market in which I participated, require/mandate/compel you to make your next trade using those details?

No.

You might look at what me and my trading partner did and think that the guidance you see in those details were wise and are good to follow, but nothing about it is regulation.

Smith was wise, organized, etc. etc. but, I believe perhaps not infallible in every detail. Perhaps today after debating vidyohs he would regret his choice of words…..Oooooooor he might find the words to convince vidyohs. Meanwhile I’ll keep saying it like I see it.

Jon Murphy November 14, 2011 at 10:11 am

Here’s the whole thing with the government as a venture capitalist:

The government picks pet projects regardless of how efficient they are.

Ask yourself: why is oil still king? If solar or hydro power was superior to oil in terms of efficiency, would we have not made the switch?

Oil is a highly efficient form of energy. For every dollar you have to spend extracting it from the ground and refining it, you get $6 worth of energy. That’s a 600% Return on Investment. Some of these other energy sources, you’re lucky if you get 2-to-1 or 1.5-to-1. In some cases, like ethanol, you are actually loosing (for every dollar of energy spent producing and refining ethanol, you get about $.60 of energy back).

The argument is not about how successful these companies are of supported by the government. You throw enough money at any company it can stay afloat. The argument is the government investing tons and tons of money into these products that simply aren’t giving a decent ROI.

Maybe solar is the power of the future. Maybe hydro is. Maybe nuclear is. But none of us have the clairvoyance to know. What I do know is I want the most for my money, and right now oil is giving me that.

Maybe someday solar will become more efficient, but right now it is not worth the money.

All Russ and anyone is saying is that it doesn’t make sense to be pouring billions of taxpayer dollars into something that is not giving us a decent return. And that is money that could be used elsewhere. And that goes for the Chinese as well.

muirgeo November 14, 2011 at 10:33 am

Yeah…because the government is not investing in oil or subsidizing it.
The market for energy doesn’t work for the good of society. We could easily transfer into renewables and they will ultimately be the best thing for society but the market makes decisions not based on asthma or climate change or decentralized eery sources it makes decision based on profit and profit alone. You have to be a fool to think profit alone is all that matters. Markets are very incompetent in so ,many other areas. Government will ultimately be instrumental in making the switch to cleaner and actually more completive energy sources.

mcwop November 14, 2011 at 10:47 am

“Government will ultimately be instrumental in making the switch to cleaner and actually more completive energy sources.”

Prove it, cause it ain’t happened yet. Moving to “renewable” is nowhere near as easy as you think. I suggest you read Power Hungry to understand the scale you are speaking about.

The only “positive” action the governmnet could take is raise the gas tax and add a gas-like tax to all forms of energy. Then you at least have a price signal.

John Muir November 14, 2011 at 10:52 am

Disingenuous Muirgeo, the word “profit” that you so despise is merely an indicator of overall consumer satisfaction with the good or service being provided. Its like a “people-led” democracy where everyone gets to go to the polls each day to vote on their preferences. Your view of what is “good for society” simply means what you would impose on others, but not yourself. You are a “useful idiot” to corrupt politicians and their political cronies.

GAAPrulesIFRSdrools November 14, 2011 at 3:31 pm

I’ve said this before and I don’t want to have to repeat myself. Muirbot is more idiot than useful.

John Muir November 14, 2011 at 3:37 pm

LOL!

Rugby1 November 14, 2011 at 1:20 pm

@ Muirgeo — Actually in terms of total dollars, Green Energy Companies (broadly defined) recieve greater amount of subsidies from the government, than traditional energy sources like oil and gas.

“We could easily transfer into renewables”

Um no. We could not. Do you understand the amount of capital it would take to transfer our energy infrastructure to something that supports renewable energy sources? What happens when the sun does not shine, or the wind does not blow? Energy output dries up and you actually would need back up renewable production with traditional energy production assets.

Finally energy is something that is used by every business and home in essence it is the keystone of the economy. Moving us to even 10% of our national power being generated by alternative sources would cost untold billions upon billions of dollars as Green Energy is far less efficient than traditional sources.

I doubt you will read it, as it is a book published by CATO, but “The False Promise of Green Energy” is superbly researched and written. Check it out if you are really curious about the cost of energy.

Darren November 14, 2011 at 7:21 pm

“Profit” works both ways. Both sellers and buyers trade for the same reason. They both believe what they receive to be of more value than what they give. If you criticize profit by the sellers, you must also criticize profit made by consumers.

anthonyl November 14, 2011 at 8:32 pm

Government could do a lot for renewables by ending oil subsidies.

John Muir November 14, 2011 at 8:45 pm

Goverment could do a lot for taxpayers and consumers by eliminating all subsidies.

Methinks1776 November 14, 2011 at 8:49 pm

Anthonyl,

I’m all for eliminating all subsidies. I’m also all for eliminating all costs government unnecessarily imposes on industry. Tell me please, which oil subsidies offend you the most and if they offset the additional costs levied on oil companies.

Greg G November 14, 2011 at 10:34 am

Jon

Let’s not forget that one reason oil is still king is that there are massive government subsidies to the oil industry. Much of our military spending, road building and tax system constitutes various forms of subsidies for the oil industry.

John Muir November 14, 2011 at 11:00 am

Disingenuous Greg G, political cronyism is political cronyism wherever you find it. The federal government should not be subsidizing the oil companies anymore than it should be subsidizing the alternative fuels companies or for that matter anyone else. You cannot legitimately argue against subsidies to oil companies then disingenuously argue for subsidies to any other industry of social group.

You said, “Much of our military spending, road building and tax system constitutes various forms of subsidies for the oil industry.”

That is a non sequitur. The military, and any road building and tax efforts, have to use oil and gas as they are the most effective and efficient sources of energy available. Their use of oil and gas is simply good common sense, and do not constitute a subsidy to the oil industry. But, requiring the rest of the government to use alternative sources of energy would mean that they can’t do their jobs, so perhaps you are on to something.

Greg G November 14, 2011 at 11:09 am

John Muir

I am not arguing that the government’s use of oil and gas is the subsidy. I am saying that a lot of our military spending is to protect our supplies of oil and that is a cost you don’t see at the pump. Likewise the building of roads increases the demand for oil. I am not saying these are bad policy choices, I am just saying they have big effects on the market for oil and tend to subsidize the use of oil. I really did not expect that to be a controversial claim.

John Muir November 14, 2011 at 11:16 am

Disingenuous Greg G, you said, “I am not arguing that the government’s use of oil and gas is the subsidy. Then, you said, Likewise the building of roads increases the demand for oil. And, you conclude with, “I am just saying they have big effects on the market for oil and tend to subsidize the use of oil.”

In three sentences, you go from “not arguing” government’s use of oil is a subsidy to “just saying” that they tend to subsidize the use of oil Can you see why people think that you are disingenuous? Or perhaps you prefer that they say you are passive-aggressive with your arguments?

Greg G November 14, 2011 at 11:21 am

John Muir

Would you be more inclined to buy a car and oil to power it if the government supplied roads to drive it on or if it didn’t?

vikingvista November 14, 2011 at 11:26 am

“Would you be more inclined to buy a car and oil to power it if the government supplied roads to drive it on or if it didn’t?”

Would you be more inclined to buy furniture for your family to sit in if the government supplied houses to place it in, or if it didn’t?

John Muir November 14, 2011 at 11:32 am

Would you be more inclined to buy a car and oil to power it if the government supplied roads to drive it on or if it didn’t?

Disingenuous Greg G, that is a straw man argument.

You assume that there would be no roads if government did not build them. Government assumed this task and pushed everyone else out of providing this type of good. If there were no government, roads would still have been built because there would have been demand for such as people like to travel from one place to another.

But, even assuming your false condition is true, then demand to travel would still be there and someone, realizing that he could make some money in satisfying such demand, may have developed an alternative method of transportation that did not require roads or oil. Thus, government involvement may have prevented a really great invention. But, that is all fiction. Care to come up with a question that does not include an unrealistic assumption?

Greg G November 14, 2011 at 11:36 am

vv & JM

I have to leave for a few hours but will pick this up when I return. I do want to answer your questions and ask a few.

GAAPrulesIFRSdrools November 14, 2011 at 3:35 pm

Well, why don’t you come up with a better fuel-one that’s stable despite a high energy density, one that’s easily graded, transported and stored and combusted

Until you leftist dreamers create this new magic fairy fuel, get off your computers, stop trolling and save our precious resources for useful things like Abrams tanks.

Greg G November 14, 2011 at 4:39 pm

No one seems to have noticed that I am not defending subsidies to Solyndra or anyone else here. Nor am I claiming that there wouldn’t have been any private roads in the absence of public roads. You would think that a group so vigilant for the detection of straw men might have noticed that.

I was merely pointing out that Jon’s original comment (about the market choosing oil as the best fuel) did not take note of the fact that there are very considerable government subsidies of various types that make oil more attractive to consumers. These include, but are not limited to, providing a road system that makes the purchase of automobiles and the gasoline to power them, more attractive to consumers. Few play the game of cronyism with more skill than big oil.

I remain quite baffled as to why it is so controversial to point this out.

John Muir November 14, 2011 at 4:43 pm

“Few play the game of cronyism with more skill than big oil. I remain quite baffled as to why it is so controversial to point this out.

Except the oil companies give us something of value, while alternative energy companies give consumers nothing in return for all those billions of taxpayer dollars wasted. Libertarians oppose all subsidies. I think everyone here is baffled that you can figure this out.

Greg G November 14, 2011 at 4:56 pm

vikingvista

“Would you be more inclined to buy furniture for your family to sit on if the government supplied houses to place it in, or if it didn’t?”

No doubt free houses would boost furniture sales. I’m sure any furniture retailer would tell you that the housing boom we did have (complete with government subsidies) actually did boost furniture sales. I am not sure what the relevance of that is to the question of whether or not government subsidies for oil exist. I would think that it tends to support my point that, when you subsidize oil (or homes or furniture) people will buy more of it.

If your point is that the government should not be in the road building business (is that your point?) that could be an interesting discussion but it is a bit far afield of the simple claim I made about the existence of subsidies for oil.

Methinks1776 November 14, 2011 at 4:58 pm

These include, but are not limited to, providing a road system that makes the purchase of automobiles and the gasoline to power them, more attractive to consumers

You are ridiculously ignorant. This is not what makes hydrocarbons the most efficient fuel on the planet. Do try to educate yourself on the topic at least minimally before you spew talking points.

And just in case it hasn’t occurred to you (and it clearly hasn’t), the road system and all that jazz you’re moaning about would be as much of a “subsidy” to “alternative energy” as it would be to oil and alternative BS is still a massive failure without even more subsidy.

The much hyped “subsidies” for “Big Oil” just simply don’t exist.

John Muir November 14, 2011 at 5:02 pm

Well said, Methinks1776!

Greg G November 14, 2011 at 5:42 pm

Methinks

I did not claim, and do not believe, that government subsidies are “what makes hydrocarbons the most efficient fuel on the planet.” In the unlikely event you ever do find someone making that claim I am sure you will be well equipped to argue against them.

Right now alternate fuels are not used to power automobiles to any significant degree. They are used primarily to make electricity. So the road system that “would be” as much of a subsidy to alternative energy is not that at the present time. I guess if you had educated yourself more on the topic you would have known that.

And I am not “moaning” about anything. Just today I was driving on the road system and was happy to be able to do it.

Methinks1776 November 14, 2011 at 6:16 pm

Right now alternate fuels are not used to power automobiles to any significant degree.

Duh.

If you had even a whiff of a clue, you’d understand why that is. You’d also know that “alternative energy” produces a piddly 3.5% of the country’s electricity supply. The reason for that is the same reason your car isn’t solar powered. You evidently don’t know enough about hydrocarbons to understand why no other fuel begins to compare to the efficiency of hydrocarbons. Oil doesn’t need subsidy. Every other fuel does. As usual, you’re spouting BS.

Go read “The Prize”. It’s a huge book all about the history of oil. Reading it was the first recommendation of my boss when I joined the oil and gas group many years ago. Don’t worry. It’s apolitical, so you won’t be dirtied by any libertarian or conservative thinking reading it.

vikingvista November 14, 2011 at 11:32 pm

“The much hyped “subsidies” for “Big Oil””

Maybe he’s referring to the Windfall Profits Tax. No? Oh, I guess that was something else.

Invisible Backhand November 14, 2011 at 8:19 pm
anthonyl November 14, 2011 at 8:53 pm

That’s a no-brainer way to reduce the federal deficit.

Jon Murphy November 14, 2011 at 11:54 am

I am going to respond to everything in this thread, I promise, but it’s a busy day at work, so look for my response tonight.

Jon Murphy November 14, 2011 at 6:31 pm

Ok, rather than respond individually, I’m going to respond to each point on this comment.

So, without further adieu:

“The market for energy doesn’t work for the good of society.”

Well, that’s just not true. There have been tons of innovations in the energy sector and other markets that were developed for renewable energy, cleaner emissions, etc. See the case of Honda (the reader’s digest version of the story: Honda developed a component for their cars that cut their emissions by nearly 85%. Later that year, the government passed a law requiring all cars sold in America to have catalytic converters. Honda asked for an exception since their component was cheaper and reduced emissions by a greater amount. The government not only refused but forbade Honda from installing their component on cars).

“Let’s not forget that one reason oil is still king is that there are massive government subsidies to the oil industry. Much of our military spending, road building and tax system constitutes various forms of subsidies for the oil industry.”

I will agree with you, Greg, with a caveat: a lot of these are indirect (money goes to tanks which run on oil) as opposed to direct (gov’t gives money to solar energy companies). Does that make it different? Not strictly speaking, but the effectiveness of the subsidy is lesser as it’s further removed from the source.

I think that issues the two main points made in this thread (I could have miss some. I kind of skimmed).

For the record, I am not bullish on oil. Nuclear power, in my opinion, is the wave of the future. However, for the amount of energy oil and natural gas produce vs the amount of energy needed to extract and refine is amazing. If your car was 600% efficient, you’d be ecstatic.

None of this is to suggest we should not be looking into renewable sources of energy. But you cannot force it. If you try to force a renewable energy into the market before the market is ready for it, you are just wasting resources.

Don’t forget, before oil came about, whale oil was used as an energy source. Oil saved the whales. Someday, something will replace oil. What that will be we just don’t know.

Methinks1776 November 14, 2011 at 6:41 pm

I will agree with you, Greg, with a caveat: a lot of these are indirect (money goes to tanks which run on oil) as opposed to direct (gov’t gives money to solar energy companies). Does that make it different? Not strictly speaking, but the effectiveness of the subsidy is lesser as it’s further removed from the source.

Jon Murphy, shame on you. The reason oil is still “king” is because it is the most efficient fuel. Full stop. Scroll down to Whiskey Jim’s post for an explanation. Hydrocarbon extraction does not require subsidy.

However, government meddling does make it more expensive to extract and refine than it would be otherwise.

vikingvista November 14, 2011 at 8:53 pm

Very true. The laws of physics overwhelm all other considerations for why oil is the dominant fuel. And really, as a fuel, its properties are quite amazing. But of course its other uses are amazing too. A world without oil would be a noticeably worse place to live.

Greg G November 14, 2011 at 6:52 pm

Jon

When I said that much of our military is a subsidy to oil I was not referring to the oil burned in military tanks. I was referring to the fact that a big part of the entire mission of the military is to protect our access to oil. That is very expensive and you don’t see the cost of it at the pump.

Methinks

I do understand how little of our energy supply comes from alternative fuels and why that is the case. I never argued or believed that oil is our dominant energy source merely because of government subsidies. I simply said that such subsidies are one reason for that dominance. I never expected that anyone would interpret that to mean it was the primary reason or the only reason. You are tireless in slaying straw men. And if I feared being “dirtied by libertarian thinking” I wouldn’t be here in the first place.

Jon Murphy November 14, 2011 at 6:55 pm

“The reason oil is still “king” is because it is the most efficient fuel.”

I wasn’t saying it was a major reason, but it is a reason (partly also because of the reason Greg also cited, our foreign policy).

Methinks1776 November 14, 2011 at 7:01 pm

I wasn’t saying it was a major reason, but it is a reason (partly also because of the reason Greg also cited, our foreign policy).

Um….no it isn’t.

Invisible Backhand November 14, 2011 at 7:35 pm

Jon, the US government does not base it’s foreign policy on oil. US foreign policy is to keep any regional hegemon, especially on the Eurasian continent, from dominating neighboring countries and powers so that they become an existential threat to the US. If oil was all it was about, then we would either be on real good terms with all oil producing countries or we would have taken over many of them.

Methinks1776 November 14, 2011 at 7:00 pm

I simply said that such subsidies are one reason for that dominance.

And I’m simply pointing out (yet again) what an idiotic statement that is. Without subsidy, hydrocarbons would be the preferred fuel. Subsidy is not “one of the reasons” hydrocarbons are without significant competition.

However, so long as we’re on the topic of government interventions, your ignorant assertion passing for an argument also doesn’t account for the enormous costs imposed by government on the oil industry. Once again, this is very likely because you are completely ignorant of them.

Greg G November 14, 2011 at 7:05 pm

Methinks

I agree that oil would easily be the dominant fuel even if it didn’t get subsidies. But that still doesn’t prevent it from getting them.

Invisible Backhand November 14, 2011 at 7:38 pm

It’s funny how oil companies get subsidies and additional unnecessary costs imposed on them. The subsidies are probably reimbursement by the government for the additional costs.

Jon Murphy November 14, 2011 at 7:04 pm

it is important to note the influence of foreign policy on oil. However, like I said, it is not really a determining factor in why oil is still around. In 200 years, when we are all using perpetual motion generators for our energy, it won’t matter that we still have a military presence in the Middle East for oil. But currently, it does. My point is, as soon as something better than oil comes along, it won’t matter much.

Oil & natural gas are king because of their efficiency. Even though they are “dirty” energies, they actually generate less pollution per joule generated than anything out there.

Greg G November 14, 2011 at 7:08 pm

The Galt Motor should be here anytime now.

Jon Murphy November 14, 2011 at 7:14 pm

Imagine if we could attach a generator to the tail of every happy dog in the world? We’d never have blackouts again!

vikingvista November 14, 2011 at 11:41 pm

“Imagine if we could attach a generator to the tail of every happy dog in the world?”

Or if we could capture the biogas emanating from the rhetoric of politicians.

Greg G November 14, 2011 at 7:17 pm

Jon Murphy shame on you. If you keep bucking Methinks you will jeopardize your good reputation here at the Cafe.

Methinks1776 November 14, 2011 at 7:18 pm

You really don’t know when to stop making an idiot of yourself, do you?

Jon Murphy November 14, 2011 at 7:57 pm

Funny, I thought I had a reputation of a murdering, racist, Koch Brothers shill loose cannon.

But Methinks is good people. We just happen to disagree on this particular nuance of this discussion (really a small factor in the grand scheme of the overall argument).

Greg G November 14, 2011 at 9:41 pm

I do take your humor that way Jon but there are a few humorless paranoids around here.

vikingvista November 14, 2011 at 11:43 pm

“but there are a few humorless paranoids around here.”

Whom do you mean? Hmm? Are you talking about me? You’re talking about me aren’t you? I know you are. You’re always secretly talking about me. I’m on to you.

Invisible Backhand November 14, 2011 at 11:58 pm

LOL! That’s funny, VV!

Methinks1776 November 14, 2011 at 7:18 pm

The influence of foreign policy on oil? Sounds spooky. All the oil companies I covered spent enormous amounts of money trying (often in vain) to protect their workers in hostile environments like Algeria and Nigeria. I don’t remember any military intervention to protect those wells or the people working there. I don’t recall military protection for Aramco.

What foreign policy are you specifically talking about?

Greg G November 14, 2011 at 7:22 pm

Ever hear of Iraq? Think we’d be there if there wasn’t oil in the region?

Invisible Backhand November 14, 2011 at 7:53 pm

Yes, idiot. The US government, after forcing the Taliban from power in Afganistan, did not have any good options in carrying the war to the jihadists. They thought eliminating Iraq and Saddam Hessein was a good idea because it would put US forces on both sides of Iran. And, more importantly, they wanted to send a message to the Saudi government that they would not survive without us so they better get their house in order and get control of the jihadists in that country.

The mistake they made is they thought they could rebuild the country as an ally. But nation building is time-consuming and expensive, which is not popular with Americans. Soon, American troops will leave Iraq and Iran, Saudi Arabia, and Turkey will compete for influence. Long term, George Bush is likely to be vindicated, but short term will be chaotic.

Jon Murphy November 14, 2011 at 8:01 pm

I’m not sure about Greg, but I am thinking of our trade agreements. With several oil-exporting countries (Saudi Arabia and the OAE come to mind), we have Most Favored Nation (MFN) status. This means that must give them the best terms of trade possible for their goods (in other words, we must eliminate all tariffs, and even subsidize domestic consumption [in extreme cases]). It goes above and beyond just free trade as we have to offer them a better price than the world price.

Invisible Backhand November 14, 2011 at 8:11 pm

Jon, all members of the World Trade Organization give Most Favored Nation status to all other member countries.

Jon Murphy November 14, 2011 at 8:14 pm

Yes, but not all nations are part of the WTO. Russia’s not, for example.

Jon Murphy November 14, 2011 at 8:17 pm

Sorry, I wrote OAE and I meant UAE.

Greg G November 14, 2011 at 8:17 pm

“George Bush is likely to be vindicated.”

I would love to know how many libertarians agree with that ?

Methinks1776 November 14, 2011 at 8:47 pm

Yes, but not all nations are part of the WTO. Russia’s not, for example.

So what? You know as well as I that consumption of oil does not need to be subsidized. You also know as well as I do that there is no way to enforce any consumption subsidy agreements. And, I’m sure you also know that 98% of Saudi Arabia’s economy is petroleum. Before petroleum, Saudi Arabia’s largest export was dates. So, we have an agreement not to increase the price of oil for Americans by levying tariffs on the world’s best quality, easiest to refine light sweet? How is this a bad foreign policy?

In fact, although I can’t remember the year (it’s been many years since I took an active interest in Saudi Arabia), but at some point the United States entered into an agreement with Saudi Arabia to buy oil at a discount in exchange for military protection for the Kingdom. How is this different from our participation and subsidy of NATO or the basis we have in Italy and Germany? Oh wait….there is one difference. The U.S. was actually getting paid to protect Saudi Arabia as opposed to raping taxpayers to protect Western Europeans from having to provide for their own defense against the Soviets…and each other.

Come on, Jon. That’s exceptionally weak.

Invisible Backhand November 14, 2011 at 8:51 pm

Who said that I was a libertarian?

As is normal for you Greg G, you assume too much and are often wrong.

Greg G November 14, 2011 at 8:54 pm

Not assuming anything on this except that there are some libertarians here and I would like to know how they feel about the claim that Bush is likely to be vindicated.

Methinks1776 November 14, 2011 at 8:58 pm

Why, Greg? Are you fresh out of stupid questions?

Jon Murphy November 14, 2011 at 9:06 pm

“Come on, Jon. That’s exceptionally weak”

I didn’t say it was a good argument. I just said it was an argument :-P

I guess I am just trying to show Greg’s argument has legs. Whether or not I agree with it is immaterial.

Methinks1776 November 14, 2011 at 9:09 pm

I don’t see any legs. You might be mistaking a prolapsed colon from the strain of turning yet another unsubstantiated assertion into a viable argument for a leg, but that’s as close to “legs” as that argument gets.

Greg G November 14, 2011 at 9:17 pm

Jon if you don’t behave she will soon start turning her pissy insults on you.

Jon Murphy November 14, 2011 at 9:28 pm

You know something…

I wish the three of us could get together and discuss some of these things. I say this sincerely. I think we could solve some of the problems facing this country between the three of us. Poor Greg would be outnumbered, but we could probably have a constructive dialogue. Or, at the very least, I’d get an entertaining show.

Invisible Backhand November 14, 2011 at 9:30 pm

Why, Greg? Are you fresh out of stupid questions?

We can only hope. But, I would not bet on it.

Greg G November 14, 2011 at 9:35 pm

Jon

I don’t think your proposed meeting would be permitted. I was recently elevated from useful idiot to full fledged statist in the Cafe Pantheon of Super Villains.

Invisible Backhand November 14, 2011 at 9:36 pm

Ever hear of Iraq? Think we’d be there if there wasn’t oil in the region?

Did we go to Germany for the oil? How about Japan? Korea? Haiti? Panama? Lebanon? Afganistan? Bosnia? Vietnam? Cambodia?

Greg G, you arethe typical smug, and stupid, leftist ideologue.

Jon Murphy November 14, 2011 at 9:39 pm

Wow! Congrats on your promotion, Greg!

I hope you know that I think you’re a good guy and take my well-intentioned humor in the spirit in which it is intended.

Invisible Backhand November 14, 2011 at 9:39 pm

full fledged statist in the Cafe Pantheon of Super Villains.

No. Just a useful idiot. One who thinks much too much of himself. Unfortunately, no one else thinks as much of you as you do yourself.

Greg G November 14, 2011 at 10:01 pm

So which was it that gave me away as a leftist ideologue, pointing out that there are subsidies for the oil industry or questioning the claim that Bush will be vindicated?

Invisible Backhand November 14, 2011 at 10:12 pm

It was your support of subsidies to political cronies who waste taxpayer money with pretend businesses.

Greg G November 14, 2011 at 10:25 pm

Where did you see that????

Invisible Backhand November 14, 2011 at 10:38 pm

In your previous comments…

Greg G November 14, 2011 at 10:40 pm

Can’t come up with one, can you????????

Invisible Backhand November 14, 2011 at 10:45 pm

It’s there. Keep looking.

Greg G November 14, 2011 at 10:54 pm

Who is assuming too much now? You can’t back up your claim. What a shock.

Invisible Backhand November 14, 2011 at 11:01 pm

Greg G, you know perfectly well that you oppose oil subsidies but support subsidies for alternative energy companies. Why should I have to quote you to you. I know you will take exception to my comment that alternative energy companies are pretend businesses. But, they are for they have produced little but consumed much.

Methinks1776 November 14, 2011 at 11:02 pm

A super villain? My, but we do think so much of ourselves, don’t we, dear? You’ve hardly the intellectual strength to qualify as a common household pest.

Invisible Backhand November 14, 2011 at 11:03 pm

Why do you play such duplicitous games?

Methinks1776 November 14, 2011 at 11:06 pm

IB, I don’t think Greg G realizes he is. Poor thing.

Greg G November 14, 2011 at 11:07 pm

IB (black)

I do not suport subsidies for alternative energy companies. I think they are a bad idea. That is a position you fabricated for me while taking a break from lecturing me on assuming too much.

Invisible Backhand November 14, 2011 at 11:08 pm

It’s sad, really, not know to know what one means when one speaks.

Greg G November 14, 2011 at 11:16 pm

IB (black)

Yes it was sad when you claimed that position was in my previous comments and you didn’t know what that meant.

Invisible Backhand November 14, 2011 at 11:18 pm

LOL, Greg G, I am not assuming too much.

Will the real Greg G please identify himself?

John Muir, in this thread above, quotes you where in three sentences you go from saying you did not say something was a subsidy to saying that it was a subsidy.

Ate you always that inconsistent? Or do you change your mind that quickly? Or, are you a politician always pandering to what you think others want to hear?

Invisible Backhand November 14, 2011 at 11:19 pm

It’s there, Greg G. Or did you change your view with the wind again?

Methinks1776 November 14, 2011 at 11:26 pm

No, no, IB. Don’t misunderstand Greg G. He’s just so ignorant on the matter he thinks “subsidies” to oil companies (which are tax breaks available to all U.S. manufacturers and largely unavailable to integrated oil companies, i.e. “Big Oil”) are the only thing standing in the way of totally inefficient “alternative fuels”.

What tax breaks, you ask? Well, E&P companies can recover 100% of exploration costs. This is a big deal since the probability of drilling an expensive dry hole is much greater than 50% for an exploration well and quite high for a development well. Integrated oil companies get to recover only 70%. Then, there’s the section 199 deduction available to all domestic manufacturers. Oh, and there’s percentage depletion which is a cost recovery method which applies to all industries subject to depletion like gold and iron. AND that method is also not available to integrated companies, i.e. “Big Oil”. Taking away oil “subsidies” amounts to simply burdening integrated oil companies with additional taxes in order to make Obama’s Solyndra investment and flushing the fruits of your labour down the ethanol toilet seem like a good idea.

Greg G November 14, 2011 at 11:32 pm

IB (black)

I pointed out that the government’s provision of a road system for drivers is an effective subsidy for the use of oil. He misinterpreted that as me claiming that the government’s use of oil while building roads was the subsidy I was referring to. I corrected that misinterpretation of what I was saying.

None of that had anything at all to do with me endorsing subsidies for alternative fuels which is the position you imagined up for me.

Invisible Backhand November 14, 2011 at 11:38 pm

Thanks, Methinks1776. You are very knowledgeable about the oil industry and the games that goverment plays with taxes. I enjoy reading your comments because you make persuasive arguments and provide facts that actually support your position.

Greg G, on the other hand, plays games with words like a politician would. He implies much while always saying that is not what he means.

Methinks1776 November 14, 2011 at 11:42 pm

Oh, yeah, sure. It’s well documented that roads are built as a subsidy for oil companies. Absolutely. It is a well known fact that before there were cars, there were no roads. And everybody knows that if government didn’t build roads to subsidies oil companies, we’d all be riding our solar semi-powered bikes and oil companies would go out of business.

Greg G November 14, 2011 at 11:43 pm

Methinks

No, actually I do not think, and did not say, that tax breaks for oil companies are “the only thing standing in the way” of alternative fuels. That is your vivid imagination again.

But that is one more position you will be great at arguing against if you can ever find someone to take it.

vikingvista November 14, 2011 at 11:46 pm

“I was recently elevated from useful idiot to full fledged statist in the Cafe Pantheon of Super Villains.”

Well. Don’t WE think highly of ourselves. Villain, maybe. Super villain? In your dreams.

Methinks1776 November 14, 2011 at 11:51 pm

Thanks, IB. I’ve forgotten a shocking amount since my days a petroleum industry analyst at an evil Wall Street bank. However, I do remember just enough to sort out weak garbage spewed by unthinking libtards.

Greg G is too lame and dull to be a good politician. However, he does have that slithering eel quality. He mostly asserts without providing evidence. Then, when the evidence is provided for him, he attempts to clumsily wedge himself into that space where he can pretend he knew it all along and you’re simply misunderstanding what he’s saying. See, he figures if he’s stupid enough to buy something that idiotic, everyone else must be also.

Greg G November 14, 2011 at 11:52 pm

vv

A man’s gotta have a dream.

Invisible Backhand November 15, 2011 at 12:06 am

However, he does have that slithering eel quality. He mostly asserts without providing evidence.

Exactly! And, his assertions are ridiculously like the false assertions that a Rachel Madcow would make.

Methinks1776 November 15, 2011 at 12:08 am

Oh, well, gee, Super Household Pest, what is it you were trying to say?

It has been systematically pointed out to you that none of your silly assertions about subsidies to oil companies holds water. So, if it’s not subsidies keeping oil in its top spot, then it must be because it is a more efficient fuel. Unless, of course, you’d like to put forth the hilarious argument that people simply prefer nasty, smelly oil as fuel instead of some nice, clean and more efficient energy source. If it weren’t the most efficient source of energy, then “alternative fuels” would have overtaken oil as the preferred fuel if oil weren’t getting any subsidies, no? So, based on your assertion that “one of reasons” (an attempt at giving yourself some wiggle room when you’re caught) oil in “king”, we can safely conclude that you must think if it weren’t for “subsidies” to oil companies, nice clean and maligned alternative energy sources would have crowded out nasty oil.

Thus, you did imply that were it not for oil “subsidies”, oil would not be “king”. Sadly, you don’t seem to realize it. Just as you constantly make the argument that Keynes’s massive insight is that during recessions government is suddenly injected with abilities it does not have in “normal times” and never realize that’s what you’re saying.

Methinks1776 November 15, 2011 at 12:09 am

Rachel Madcow

Funny. That’s exactly what I call her.

Invisible Backhand November 15, 2011 at 12:16 am

To Greg G, words have no meaning except for what he wants them to mean when he wants them to mean it. It’s a crazy world that he lives in. And, when conversing with him, I feel like I’ve gone down the rabbit hole and am in Wonderland, except I can’t find Alice.

Greg G November 15, 2011 at 6:56 am

Methinks & IB black

It is entirely possible and logical to believe, both that oil is the most efficient fuel, and that the oil companies skill at crony capitalism results in large effective government subsidies to them.

The “slithering eel quality” that prevents any of your straw men (“solar semi-powered bikes”?) from standing is simply a refusal to be shoehorned into your Manichaean worldview of producers versus parasites and libertarians versus leftists.

I ran my own business for 35 years. I paid plenty of taxes and complied with plenty of dumb regulations. I turned away many over entitled job seekers who I wouldn’t have let near my customers if they had been willing to work for free. But that pales in comparison to the sense of over entitlement I have seen in the business world and on this blog.

So IB, continue to wait patiently for the vindication of George Bush.

And Methinks, continue to whine about how oppressive it is to live in the most free and prosperous country in human history all while suffering the agonies of a keenly overdeveloped ability to sense over entitlement…….in others.

Methinks1776 November 15, 2011 at 8:12 am

Blah blah blah.

Your long, dumb, irrelevant speech doesn’t change anything. Try staying on topic instead of revealing your disorganized mind by slithering from non sequitur to non sequitur. Although, you probably don’t even realize you’re doing that.

Invisible Backhand November 15, 2011 at 8:42 am

Greg G, I see that you are already spouting your normal nonsense this morning. That slippery eel feeling comes from watching many people, like John Muir, trap you in your lies and obfuscation. You say one thing and then two sentences later you say the opposite.

You avoid responding to my comment to your implication about an oil based foreign policy by grasping on to my side comment about Bush. That was a trap to see if you were a leftist. And, right on cue you went into Bush Derangement Syndrome instead of staying with the issue we were discussing.

There is not a libertarian that I know of who supports subsidies to anybody. So why assume that they support them for oil companies? And why do you argue against only subsidies for oil companies if you oppose all subsidies?

Greg G November 15, 2011 at 8:59 am

Oh, so you have “trapped” me into admitting I don’t think Bush will be “vindicated.” You are a tricky one IB. I’m so embarrassed.

Good to know that is what it takes to be a leftist around here. And good to know that responding to a point you raised is going off topic.

Methinks1776 November 15, 2011 at 9:11 am

Greg G is busy babbling in the hopes everyone will just forget what he was talking about and become suddenly fascinated by his ability to hire and fire people in the business he ran for 35 years. Ho-ho! He’s seen plenty of entitled people in his lifetime. That’s how he knows that he most efficient fuel on the planet needs subsidies to remain “king”, which he said but never said. ‘kay?1

Invisible Backhand November 15, 2011 at 9:37 am

Greg G, trapping you into revealing your beliefs and inconsistencies is not difficult. John Muir did it by merely quoting three sentences of yours.

The issue was an oil based foreign policy. You dropped the issue immediately to chase Bush. You even jumped the gun by assuming I am a libertarian and asked what other libertarians would think that long term Bush would be vindicated.

But I’m not a libertarian. And, genius, if you had actually comprehended what libertarians have said you would know that they oppose nation building. Nation building, BTW, is a policy of big-government types. You know the concept. Government officials who think they can change the world if you give them power and other peoples money.

Perhaps leftist was too strong a word. Flip flopper is a more accurate description of your inconsistencies.

Greg G November 15, 2011 at 9:46 am

Which is it, leftist or flip flopper? Stop being inconsistent.

Invisible Backhand November 15, 2011 at 10:26 am

I was being kind in suggesting flip flopper.

EG November 14, 2011 at 10:55 am

It seems to me some “libertarians” are trying too hard to try and make everything look as if any government involvement has always been bad or counterproductive, and everything good in the world has been the result of private enterprise

It misses an important point; gov. is just a method of financing or supporting a particular entity. Leaving aside the…MORAL…issue on which “libertarians” get bogged down, what it comes down to is efficient methods of financing a particular behavior. Is it a given that free markets are more efficient than an ALTERNATIVE method of managing the finances at delivering beneficial results? The answer is…NO. Some “libertarians” pretend like the answer is always, yes. But thats not what economics will tell you. On the other side, are there some things where more beneficial results can be achieved through another alternative? The answer is obviously…YES (unless you are an anarchist)

So, if we analyze this from the perspective of efficiencies and incentives of a particular management type…we may get a different perspective; one which is not hostile to the libertarian view, or the view that government doesn’t do many things right. But it obviously does SOME things right. And where it specifically does things that result in more beneficial outcomes…is the military. Most of the investment has been in the military and military-related basic research. This is an area which is not subjected to market pressures, but it is subjected to other types of pressures; survival pressure. The gov does better in the military area and in developing technologies there because it operates in a quasi-market, competing with other governments and other militaries.

The results often have POSITIVE EXTERNALITIES… Can we imagine how things like; the computer, the internet, the jet engine, the nuclear reactor, composite materials, satellites etc etc…could have come about were it not for positive externalities of technologies developed for military purposes? I can’t. And anyone who says they can…is full of something.

So from a purely economic point of view (forgetting for a second the moral arguments of “libertarianism”)…what makes markets more efficient is competitive pressures. We can say that government does a POOR job at energy subsidies and other types of subsidies that are poured into markets because it is not under competitive pressures, whereas market players are.

BUT, conversely, the government does relatively well in “markets” where it does have a competitive pressures, and where no private entities can, or want to be, involved. That being…the military.

So it is disingenuous to make sweeping generalizations condemning ALL government “investments” into research or technologies as “bad” or “inefficient”. You’d have to ignore reality and history to do that, and you’d have to ignore basic concepts of economics; not all markets are markets where private individuals or firms can, or want to, be involved in.

It would NOT hurt the “libertarian” argument to say…gov. needs to stick to what it does well, and not interfere in markets where private players are better positioned to make decisions. That’s not what I’m hearing here, from a lot of people (and that opens the doors for Leftists to ridicule some “libertarians”, justly!, as ignoring reality)

vikingvista November 14, 2011 at 11:49 am

“gov. is just a method of financing or supporting a particular entity”

“Just”? What an incredibly bad choice of words. The statement is clearly false because of it.

But your entire analysis misses the *fact* that values are subjective, and there is no universal objective measure of value. Sure, it may very well be more beneficial and efficient to YOU to finance a project YOU care about by pressing a gun against someone’s head and extorting his money (the essential method of governments). But none of that is likely true for HIM.

You want a rational objective (rather than self-centered) analysis of social interactions, you must incorporate that fact. But then if you did, you’d be a libertarian similar to those you falsely malign.

EG November 14, 2011 at 1:13 pm

Semantics aside, of course value is subjective. That doesn’t mean that we have NO WAY of knowing whether the investment into…jet engines…was a net positive or a net negative. We kinda do!

I don’t want an analysis of social interactions. I want an analysis of outcomes. The social interactions produce the outcomes. I’m asking for some basic economic concepts to be applied here, and not to be subjected to the usual “libertarian” dogma of x=bad y=good no matter what the case.

if we’re going to go ahead and make the sweeping statement that all government “investments” in all fields are bad, and counterproductive etc…we need to discuss incentives, we need to discuss the different types of markets, and we need to discuss whether or not there are some markets where private enterprises do not function as well as other forms. If we say…NO…then we’ve reached the anarchist conclusion that there is absolutely nothing the government does which is worth any benefit. If that’s, the case, I’d like you to tell me that the jet engine has produced no net benefits to society.

John Muir November 14, 2011 at 1:39 pm

“If we say…NO…then we’ve reached the anarchist conclusion that there is absolutely nothing the government does which is worth any benefit.”

The anarchists are wrong. We need government because people will sometimes choose to do the wrong thing, like not fulfill contractual terms, use coercion to bully others into giving them money, etc. So legitimate functions of government include a court system, a military, settling disputes between State governments, etc.

What else would you like for the government to do? There are so many things that would be inefficiently and ineffectively done by government because the incentives are all wrong that I don’t want to just list one at random.

“If that’s, the case, I’d like you to tell me that the jet engine has produced no net benefits to society.”

This is a straw man argument. Your assumption is incorrect. The jet engine was developed by individuals, who realized that government, in wartime, would gladly pay for it if it resulted in more efficient and effective killing of other human beings. The same people that thought of the jet engine, in peacetime, would thought that jet engines would make transportation of goods and people more efficient and safer so the jet engine would still be here.

War breeds a necessity that will cause a good to be developed sooner than if it were developed for private uses. But, I think those killed in war by such devices would rather wait on them to be developed for private use. I, and everyone else I know, would agree with them.

EG November 14, 2011 at 2:06 pm

“What else would you like for the government to do? There are so many things that would be inefficiently and ineffectively done by government”

I didn’t advocate for gov to do anything.

“The jet engine was developed by individuals, who realized that government, in wartime, would gladly pay for it ”

Of course it was developed by individuals. Everything is developed by individuals. The gov is just one alternate method of financing an outcome. Of course civilian aviation, could, in 100 years, have prompted the development of the jet engine. Or maybe not. The question becomes, was the investment placed in the jet engine a net positive for society, or not?

“But, I think those killed in war by such devices would rather wait on them to be developed for private use. I, and everyone else I know, would agree with them.”

That’s an entirely unrelated and irrelevant issue. That’s like saying “Sure America won independence, but what about all the people that died? Was it worth it?” Well…we can measure that one too ;)

John Muir November 14, 2011 at 2:20 pm

“I didn’t advocate for gov to do anything.”

Good. Then, let’s limit government’s functions and let the individuals create goods and services desired by consumers.

“The question becomes, was the investment placed in the jet engine a net positive for society, or not?

Again, that is a straw man argument. You have designed your question to achieve a certain answer. The question really should be whether government financing of the development of goods is a net positive for society? The answer is that it could be. Experience, however, tells us that government financing, in aggregate, is a failure that needlessly wastes huge amounts of resources so corrupt politicians can payoff political cronies. A recent example is Solyndra.

“That’s an entirely unrelated and irrelevant issue.”

Nah, government’s incentives and goals must always be considered in determining whether it is a good source of financing. Most times, government financing is merely a way for corrupt politicians to pay off political cronies. Occasionally, it is for government to obtain new weapons to kill people.

Private financing is better because (1) the risk of loss is shifted to those willing to bear such loss (not taxpayers), (2) it eliminates the waste, graft, and corruption normally associated with government financing, and (3) the incentives for success with private financing are higher with private financing than with government financing.

EG November 15, 2011 at 1:11 pm

“The question really should be whether government financing of the development of goods is a net positive for society? The answer is that it could be. ”

Then there is nothing for us to disagree on, if that’s your answer. THAT…is what I’m getting at. There is no absolute rule which says one is good and the other is bad.

“Nah, government’s incentives and goals must always be considered in determining whether it is a good source of financing. ”

They may be considered, but they are irrelevant. Results matter, not intentions.

“Private financing is better because”

I know why its better. I’m not making the argument that it is not. I’m making the argument that it is not in 100% of cases.

John Muir November 15, 2011 at 1:38 pm

THAT…is what I’m getting at. There is no absolute rule which says one is good and the other is bad.

No. There is no absolute rule saying whether one is good and the other is bad. There is, however, an absolute rule limiting what the federal government may or may not do. The State and local governments have less restrictions and people may decide for government to do certain things, at least until it infringes on the life, liberty, and property of individuals. Then those may only be taken with due process of law.

Results matter, not intentions.

Intentions very much matter. Otherwise we end up with lots of wars that are unnecessary.

I know why its better. I’m not making the argument that it is not. I’m making the argument that it is not in 100% of cases.

I’m glad that you understand why private financing is better than government financing. That is why there are Constitutional limits on what the federal government may do. The founders realized that the federal government had to be prohibited from financing political cronies otherwise corrupt politicians would steal too much from the taxpayers.

EG November 15, 2011 at 3:14 pm

“There is, however, an absolute rule limiting what the federal government may or may not do.”

Military requirements are within that limit, clearly.

“I’m glad that you understand why private financing is better than government financing. ”

Well, thanks to your wonderful explanation, of course! Before you, I always thought the opposite.

“That is why there are Constitutional limits on what the federal government may do. The founders realized that the federal government had to be prohibited from financing political cronies otherwise corrupt politicians would steal too much from the taxpayers.”

What, specifically, is the major malfunction in your comprehension skills? No one is arguing about this issue. The issue at hand is a simple one…are there, or aren’t there, circumstances where government financing of a particular activity produce more desirable results than otherwise?

Its a simple yes or no question.

John Muir November 15, 2011 at 3:27 pm

Military requirements are within that limit, clearly.

Not at the level that we have today.

Well, thanks to your wonderful explanation, of course! Before you, I always thought the opposite.

Thank you! But, it is sad that I had to explain it to you.

Its a simple yes or no question.

Then why did you start a discussion. And, even then, why do you have to ask such a simple question? You sure are dumb if you did not know the answer before asking it.

vikingvista November 14, 2011 at 1:42 pm

All government actions are bad TO SOMEONE, otherwise they wouldn’t need to be forced upon them.

You still miss the point, in spite of your denial. You want to say a particular government action is good to someone, or to some group of people, or to most people, fine (although application of force, whether democratic or not, makes such an assessment problematic, not to mention irrelevant).

But a moral judgement–an ideology–is inherent in a preference for any such claim–again, in contradiction to your claims to the contrary. You are revealing an ideology whenever you make a claim about the value of a government action, precisely because you are deciding, based upon your values, whose values matter.

The first step to recovery, is grasping that you are making a moral judgement. Then you can work on understanding what ideology you are peddling, and which moral judgement is the most rational. But of course if you do, depending upon your most fundamental values, you may very well wind up being a libertarian.

EG November 14, 2011 at 2:19 pm

“All government actions are bad TO SOMEONE, otherwise they wouldn’t need to be forced upon them. ”

Of course not. Contracts, property rights, individual rights…all depend you being FORCED to do something. The notion that all forced actions are bad is outlandish, and it ignores 10,000 years of human development of law.

“You want to say a particular government action is good to someone, or to some group of people, or to most people, fine”

I’m saying there are instances when it is good for…all people. A police force is good for…all people. You may disagree on how efficient it is, or on whether a more efficient form can be devised. But you’re not really doing that.

“You are revealing an ideology whenever you make a claim about the value of a government action, precisely because you are deciding, based upon your values, whose values matter. ”

I look at 10,000 years of human law…and see the patterns which humans have developed. We created laws, and then we created law enforcement. Law enforcement is the use of force. Law enforcement is beneficial for everyone, because law is beneficial to everyone.

I’m not asking for one person to benefit over another through the use of government. I’m asking you to make the case that ALL government actions lead to such outcomes, and that there are NO government actions which lead to the opposite? (ie…was the jet engine a positive, or a negative?)

“The first step to recovery, is grasping that you are making a moral judgement. Then you can work on understanding what ideology you are peddling, and which moral judgement is the most rational. But of course if you do, depending upon your most fundamental values, you may very well wind up being a libertarian”

2+2=4 is not a moral judgment. It just ain’t. If you’re pretending like there aren’t some concepts of economics that are not subject to moral relativism, then obviously I can’t even see HOW one would reach a “libertarian” conclusion. A libertarian (ie classical liberal) conclusion would necessitate SOME degree of objectivity.

vikingvista November 14, 2011 at 3:50 pm

“Contracts, property rights, individual rights…all depend you being FORCED to do something.”

That is easily one of the dumbest things not uttered here by muirgeo. Actually, come to think of it, I believe he has uttered it.

By definition, negative rights do not require you to be forced to do anything. Absence of force, is not force.

“I’m saying there are instances when it is good for…all people. A police force is good for…all people. You may disagree on how efficient it is, or on whether a more efficient form can be devised. But you’re not really doing that.”

You are conflating a service with how it is provided. Shoes may be good for many people. That doesn’t mean the violent acquisition of capital and labor to provide those shoes is.

BTW, if you are going to refer to “all” people, you are going to be wrong every time. Try not to presume that you are the mouthpiece for all of humanity.

“We created laws, and then we created law enforcement.”

My, WE are accomplished aren’t WE? Sometimes I wonder how I ever found the time to help you do those things.

“Law enforcement is the use of force.”

Jesus. You’ve been reading this libertarian blog for how long? And you still don’t know the basic libertarian principle? Again, I’d think I was responding to muirgeo. Alright, here we go…

The context of “force” used in libertarian parlance for almost as long as there have been libertarians, is not its most general notion. It doesn’t refer to Newton’s laws. It has nothing to do with gravity, the nucleus of an atom, two rocks banging together, or even two animals fighting. It refers to the initiation of force by one volitional agent capable of communication, against another. It is therefore an offensive act. It is the breaking of the peace. It is the deliberate choice to forego the option of peaceful persuasion available to such entities, and instead to treat another as you would an animal, rock, lumber, or storm, with complete disregard for the fact that it has its own values accordant with its nature.

In this context, “force” does not refer to actions taken against an entity that has already vetoed the option of voluntary interaction.

“Law enforcement is beneficial for everyone, because law is beneficial to everyone.”

Again, humanity thanks you for taking the burden of speaking for them. But, as I warned you above, it is a universal statement guaranteed to be false. Since you cannot grasp the notion of a service NOT provided by the violent manipulation of peaceful individuals, I will just assume here that you mean government law enforcement. God help you if I need to provide you with historical examples of the savagery of government laws and law enforcement.

“I’m not asking for one person to benefit over another through the use of government. I’m asking you to make the case that ALL government actions lead to such outcomes, and that there are NO government actions which lead to the opposite? (ie…was the jet engine a positive, or a negative?)”

Adolph Hitler ordered the gold teeth of his concentration camp victims to be kept, melted down, and put to other uses. Some of that gold may have wound up as attractive jewelry around the neck of a lovely joyous lady. Yes, beauty and joy are good outcomes.

Now, perhaps you’d like to rephrase your question.

“2+2=4 is not a moral judgment.”

If I said 2+2=4 is a moral judgement, then you must’ve said that people who disagree with you deserve to be tortured into compliance. If course, I didn’t say that. But since you put words into the mouths of all of humanity, why should I feel special?

“If you’re pretending like there aren’t some concepts of economics that are not subject to moral relativism, then obviously I can’t even see HOW one would reach a “libertarian” conclusion. A libertarian (ie classical liberal) conclusion would necessitate SOME degree of objectivity.”

‘Values are subjective’ is an objective economic truth, not a moral judgement. Your entire analysis violates this objective truth, and therefore is false.

Economics, which you are not employing here, recognizes that truth. The consequence of that truth leads to the understanding of an objective market price. It doesn’t lead to the conclusion that everyone in the market values that price, which, you may be surprised to learn, is not the case.

EG November 15, 2011 at 1:33 pm

“Absence of force, is not force.”

Hmm?? When you break a contract, you are forced to pay compensation. Force is used to prevent you from breaking a contract. Force is used to prevent you from taking my stuff, or my liberty. This is not absence of force. This is the deterrence of force.

“You are conflating a service with how it is provided. Shoes may be good for many people. That doesn’t mean the violent acquisition of capital and labor to provide those shoes is.”

I’m not confusing that. You are confusing your dislike for something, with you having an alternative to it. If you don’t have an alternative to it, then your argument is pointless.

“And you still don’t know the basic libertarian principle?”

“Libertarian principle”?? I’m not interested in Ayn Rand novels. I’m interested in classical liberalism. I don’t know of any “principles” that say that law enforcement doesn’t use “force”. But…I’m certain Ron Paul does.

“It refers to the initiation of force by one volitional agent capable of communication, against another. It is therefore an offensive act. It is the breaking of the peace. It is the deliberate choice to forego the option of peaceful persuasion available to such entities, and instead to treat another as you would an animal, rock, lumber, or storm, with complete disregard for the fact that it has its own values accordant with its nature.”

Bla bla bla. When I break a contract with you, a third party forces me to pay compensation. Why must this third party treat me like a …rock…with complete disregard for my values? :) Give me a break.

“In this context, “force” does not refer to actions taken against an entity that has already vetoed the option of voluntary interaction.”

Pie in the sky Aryn-Ron-Paulandianism is all good and fine in its assumption that…AS LONG AS NO ONE VIOLATES ANYONE ELSE”S RIGHTS…then no force is required to be administered by a third party.

Except that pie in the sky libertarianism doesn’t account for humans; ie regardless of all the mumbo jumbo you said there, there is always going to be someone who is going to violate my rights in the absence of…deterrence. The WHOLE concept of law and law enforcement is to provide deterrence to someone violating your rights. But it can only do this if the deterrence is backed up by force.

All you’ve told me is…”why can’t we all just get along, man!”. Hmm, cause we can’t. Cause we don’t. Cause we’re human. Cause in the absence of a…risk of loss…we will break the law.

This is about the most basic economic concept; risk and reward. if there is no force associated to the risk, then there is no risk.

“Since you cannot grasp the notion of a service NOT provided by the violent manipulation of peaceful individuals, ”

You’re not a peaceful individual if you break my rights. The service provided, is the deterrence against break my rights. Deterrence requires force. Whether this is administered by me, by a mall cop, by the police, by the military etc is irrelevant to the central notion.

“God help you if I need to provide you with historical examples of the savagery of government laws and law enforcement.”

Oh dear god.

“Adolph Hitler ordered the gold teeth of his concentration camp victims to be kept, melted down, and put to other uses. Some of that gold may have wound up as attractive jewelry around the neck of a lovely joyous lady. Yes, beauty and joy are good outcomes.”

Yah. You clearly understood the point of what I said there.

EG November 15, 2011 at 1:47 pm

“If I said 2+2=4 is a moral judgement, then you must’ve said that people who disagree with you deserve to be tortured into compliance. If course, I didn’t say that. But since you put words into the mouths of all of humanity, why should I feel special?”

The argument I made is if…a certain investment is worth it or not. That’s a 2+2 question. You claim its a moral question. It’s not. Its an economic question.

“‘Values are subjective’ is an objective economic truth, not a moral judgement. Your entire analysis violates this objective truth, and therefore is false. ”

?? Values are subjective between me and you. Dollars are not. You pretend as if there’s no way for us to make an economic argument as to whether something is a worthwhile investment or not.

“Economics, which you are not employing here, recognizes that truth. The consequence of that truth leads to the understanding of an objective market price. It doesn’t lead to the conclusion that everyone in the market values that price, which, you may be surprised to learn, is not the case.”

??? The second part of your statement is totally unrelated to the issue at hand. The issue at hand is if a given investment in a given technology/good/service etc is worthwhile given the benefits it generates.

Your argument is that it NEVER is if it is provided by a government method of financing. And then you say that you don’t care about the numbers…because its a moral issue that it always must be so. I recognize the Ron Paul-arity of the argument. I just don’t recognize why I should take it seriously.

Investments by gov. in solar,wind, corn, rail etc (even nuclear) don’t make sense because the numbers don’t add up…not because its not “moral”.

vikingvista November 15, 2011 at 2:44 pm

“Hmm?? When you break a contract, you are forced to pay compensation. Force is used to prevent you from breaking a contract. Force is used to prevent you from taking my stuff, or my liberty. This is not absence of force. This is the deterrence of force.”

There are only two possibilities here:

(1) You are deliberately taking out of context “force” as centuries of libertarian (including classical liberal) thought has used it; or

(2) You’re easily one of the most painfully ignorant people to ever misuse the terms “classical liberal” or “libertarian”.

I can’t do anything about the insincerity of the former, accept ignore you as someone uninterested in understanding anything. I’ve provided you with the cure or the latter in my last post, if your own ignorance is anything that troubles you. Since I’ve already addressed this completely in my last post, I’ll just refer you back to it.

ME: “You are conflating a service with how it is provided. Shoes may be good for many people. That doesn’t mean the violent acquisition of capital and labor to provide those shoes is.”
DU: I’m not confusing that. You are confusing your dislike for something, with you having an alternative to it. If you don’t have an alternative to it, then your argument is pointless.

In the 1950′s USSR, there was no alternative to government provision of shoes. So you believe that the government always did and always will provide Russians with shoes. Got it. All that is, always was and always will be. Nothing ever new under the sun. You take radical conventionalism to a metaphysical level.

Well here’s an alternative for you: put away your gun and let peaceful people be.

ME: “And you still don’t know the basic libertarian principle?”
DU: “Libertarian principle”?? I’m not interested in Ayn Rand novels. I’m interested in classical liberalism.

Obviously you have no interest in classical liberalism, or in understanding anything that you choose to expound upon, or you would’ve read something about them. The principle of noninitiation of force predated Miss Rand’s birth by quite some time. This truly reveals an amazing degree of ignorance on your part, considering that YOU have chosen to discuss it.

ME: “It refers to the initiation of force by one volitional agent capable of communication, against another. It is therefore an offensive act. It is the breaking of the peace. It is the deliberate choice to forego the option of peaceful persuasion available to such entities, and instead to treat another as you would an animal, rock, lumber, or storm, with complete disregard for the fact that it has its own values accordant with its nature.”
DU: Bla bla bla. When I break a contract with you, a third party forces me to pay compensation. Why must this third party treat me like a …rock…with complete disregard for my values?

It doesn’t have to. You didn’t read my passage, obviously. Your whole series of rants appears to be due to crippling lack of reading comprehension spanning the entirety of liberal thought.

ME: “In this context, “force” does not refer to actions taken against an entity that has already vetoed the option of voluntary interaction.”
DU: Pie in the sky Aryn-Ron-Paulandianism

You keep bringing up Ayn Rand in ways that make no sense. Do you know who she is? Have you ever read anything she wrote? If not, perhaps you should stop invoking her name. More problems with reading comprehension, I suppose.

DU: “is all good and fine in its assumption that…AS LONG AS NO ONE VIOLATES ANYONE ELSE”S RIGHTS…then no force is required to be administered by a third party.

But of course, that isn’t true, as I just explained in what you call my “blah blah blah” passage (which predates me by centuries). Why not actually read it, and stop the non sequiturs?

DU: “Except that pie in the sky libertarianism doesn’t account for humans; ie regardless of all the mumbo jumbo you said there, there is always going to be someone who is going to violate my rights in the absence of…deterrence.”

This isn’t “regardless” of my “mumbo jumbo”, it is *addressed* by my “mumbo jumbo”. In fact, it is the very reason I wrote my “mumbo jumbo”. You go on and on as though I (and countless before me) haven’t already addressed your astonishingly ignorant point.

DU: “The WHOLE concept of law and law enforcement is to provide deterrence to someone violating your rights. But it can only do this if the deterrence is backed up by force.”

My god what a mess of a statement. Let me briefly touch on some of it:

1. Nobody but you believes deterrence is “the whole concept of law and law enforcement”. You and your false universals.

2. “Force” in this context can only be true, if it is a different “force” than the one you originally were addressing. But then it is little more relevant than the force of gravity or the strong nuclear force.

3. There exist, and have always existed, methods of both law and contract enforcement that did not involve force in either sense of the word.

DU: All you’ve told me is…”why can’t we all just get along, man!”.

Huh? How on earth do you get that interpretation from what I wrote? Stop looking like a damned fool, and go back and actually read my responses before posting a reply.

DU: in the absence of a…risk of loss…we will break the law.

Speak for yourself. Frankly, I’m not surprised.

DU: This is about the most basic economic concept; risk and reward. if there is no force associated to the risk, then there is no risk.

*THAT* is “the most basic economic concept”? More basic than “men act”? More basic than “values are subjective”? More basic than men are self-interested? Some economic texts devote entire chapters to more basic economic concepts. Where do you get this nonsense? Cripes, take an economics class for god’s sake, or at least pick up a book.

DU: You’re not a peaceful individual if you break my rights.

Which, of course, I said in my “blah blah blah” passage that you pretended to read. Hmm, maybe I should follow your lead and continue this “discussion” by merely replying “blah blah blah” to everything you post. Sounds…constructive.

DU: The service provided, is the deterrence against break my rights. Deterrence requires force. Whether this is administered by me, by a mall cop, by the police, by the military etc is irrelevant to the central notion.

More conceptual mud. Let me again address just a few points:

1. Deterrence, of course, does not always require “force”, in either of the ambiguous ways you confusedly use it.

2. When it contradicts the central notion, then, of course, it is relevant to the central notion.

3. The meaning of rights, which you seem to understand merely as “blah blah blah” is central to the whole discussion.

ME: “God help you if I need to provide you with historical examples of the savagery of government laws and law enforcement.”
DU: Oh dear god.

You are the one who wrote, “Law enforcement is beneficial for everyone, because law is beneficial to everyone.” Unless you care to rephrase, I can only take you at your word that you believe the masses of innocent human beings who have been brutalized and murdered by law enforcement over the millenia, benefitted from it. You must be very happy for them.

Dramatically revealing your contradictions, by the way, is meant to show you that your ideas are false. You should start taking some of it to heart.

ME: “Adolph Hitler ordered the gold teeth of his concentration camp victims to be kept, melted down, and put to other uses. Some of that gold may have wound up as attractive jewelry around the neck of a lovely joyous lady. Yes, beauty and joy are good outcomes.”
DU: Yah. You clearly understood the point of what I said there.

Well, if your words are a reflection of your thoughts, then even you don’t understand the point of what you said. But you have been blindly defending government “outcomes” while ridiculing of those of us who are critical of the means to those outcomes. Your points address the ends, oblivious to the means.

EG November 15, 2011 at 4:32 pm

“Well here’s an alternative for you: put away your gun and let peaceful people be.”

Ok. Lets recap. In the real world, there are those who will violate your rights. They are not peaceful. They will violate your rights. What puts downward pressure on violations of rights, is the likelihood of incurring a loss while doing so.

The question becomes how to administer this deterrence in the most effective means possible. It is entirely within classical liberal thought, to say that gov. institutions are the best positioned to provide deterrence of force in order to enforce your rights.

You say…NO!…we’re all peaceful and no one will do anything bad. Force is not needed. Ok…

“In the 1950′s USSR, there was no alternative to government provision of shoes. So you believe that the government always did and always will provide Russians with shoes. Got it.”

Yes, expect that there was an alternative, and it was available. Oh well, little details I’m sure.

“The principle of noninitiation of force”

Non-initiation of force is not the same thing as LAW ENFORCEMENT. This isn’t a very difficult concept. Law enforcement is there to prevent the initiation of force upon you by some other entity. It does so, by imposing a loss on the initiator.

“Have you ever read anything she wrote?”

Nop

“1. Nobody but you believes deterrence is “the whole concept of law and law enforcement”. You and your false universals.”

Laws provide guidelines. Guidelines are only meaningful if going outside of them, results in a loss.

“3. There exist, and have always existed, methods of both law and contract enforcement that did not involve force in either sense of the word.”

If one side is to incur a loss when breaking a contract or law, that loss needs to be enforced. When you enforce a contract, you necessarily use force.

“Speak for yourself.”

Lol.

“*THAT* is “the most basic economic concept”? More basic than “men act”? More basic than “values are subjective”? More basic than men are self-interested? Some economic texts devote entire chapters to more basic economic concepts. Where do you get this nonsense? Cripes, take an economics class for god’s sake, or at least pick up a book.”

And this contradicts the fact that “risk-reward” is the concept behind this, how?

“1. Deterrence, of course, does not always require “force”, in either of the ambiguous ways you confusedly use it.”

The Webster definition of deterrence: the act or process of deterring: as a : the inhibition of criminal behavior by fear especially of punishment b : the maintenance of military power for the purpose of discouraging attack

“2. When it contradicts the central notion, then, of course, it is relevant to the central notion.”

It enforces the central notion

“3. The meaning of rights, which you seem to understand merely as “blah blah blah” is central to the whole discussion.”

Rights need en-FORCE-ment.

“Unless you care to rephrase, I can only take you at your word that you believe the masses of innocent human beings who have been brutalized and murdered by law enforcement over the millenia, benefitted from it.”

You can’t be serious? Oh wait…you can. You’re a libertarian. In your mind, Adolf Hitler killing jews is the equivalent of law enforcement in a society operating under the basic tenants of classical liberal thought (as the US constitution provides). Yah…cause the best way to win a discussion is to bring up Adolf Hitler

Jon Murphy November 15, 2011 at 4:37 pm

EG steps up to the plate. The pitcher takes a long look in. Here’s the pitch!

And…

Swing and a miss!

He was really swinging for the fences there.

vikingvista November 15, 2011 at 5:57 pm

DU: “You say…NO!…we’re all peaceful and no one will do anything bad. Force is not needed.”

You’ll have to quote me on that. Or did you intend to post this to someone else? Because the centerpiece of my response to you, translated cleverly by you as “blah blah blah” is of course, in the oldest liberal sense, a complete contradition of your representation.

ME: “In the 1950′s USSR, there was no alternative to government provision of shoes. So you believe that the government always did ausd always will provide Russians with shoes. Got it.”
DU: Yes, expect that there was an alternative, and it was available. Oh well, little details I’m sure.

Oh really? What was that alternative? Could Aleksandr Solzhenitsyn have stopped by the local Foot Locker? Let me hear your clever “little details” about his alternatives.

Or if your peculiar point is that Solzhenitsyn’s alternative was John Smith of Toledo’s alternative, then perhaps you can delve into a little field of study called “history” where you’ll find no end to the things that at one time, never existed anywhere.

DU: Non-initiation of force is not the same thing as LAW ENFORCEMENT. This isn’t a very difficult concept. Law enforcement is there to prevent the initiation of force upon you by some other entity. It does so, by imposing a loss on the initiator.

Nobody but the confused little voice in your head ever said that they were the same thing. YOU however have been going on endlessly about how force is force whether initiated or not–even in the face of me pointing it out to you. Hopefully now, you are beginning to backtrack, but the embarrassment is irreversible.

ME: “Have you ever read anything she wrote?”
DU: Nop

It was a rhetorical question. It is obvious you haven’t read any Rand, just as it is obvious you have read nothing at all in the liberal tradition. But don’t let that stop you from expounding upon any of it.

ME: “1. Nobody but you believes deterrence is “the whole concept of law and law enforcement”. You and your false universals.”
DU: Laws provide guidelines. Guidelines are only meaningful if going outside of them, results in a loss.

The falsehoods never end with you. Let’s tease out some more:

1. *Some* laws provide guidelines.
2. Loss or potential loss is not associated with all laws, and certainly not with all guidelines in general.
3. Guidelines needn’t have any repurcussions to have meaning.
4. The whole concept of law and law enforcement involves a great deal more, and doesn’t always include, deterrence.

Normally when someone such as yourself so carelessly articulates himself, I don’t spend so much time illuminating it. I do here, because your string of falsehoods reveals why you can’t get your brain around the reality of some of the ways people can and do organize themselves to acheive their goals–including securing their rights.

ME: “3. There exist, and have always existed, methods of both law and contract enforcement that did not involve force in either sense of the word.”
DU: If one side is to incur a loss when breaking a contract or law, that loss needs to be enforced. When you enforce a contract, you necessarily use force.

Just when I thought you were beginning to understand “force”, you backslide. Why are the fundamentals of the liberal tradition so alien to you? Or should I ask, why do you comment so much about that which you haven’t begun to understand?

Now it is, I’m sure, quite apparent to anyone reading this, that it is yet another false universal that “when you enforce a contract, you necessarily use force”, no matter which of your conflated meanings of “force” is used. Free completely voluntary markets (i.e. that set of interactions that are not coerced–and they do exist), have many methods of contract enforcement. I’ll give you a minute to think about it. It is rather obvious (and I comment on it frequently, which you may have stumbled upon).

ME: “*THAT* is “the most basic economic concept”? More basic than “men act”? More basic than “values are subjective”? More basic than men are self-interested? Some economic texts devote entire chapters to more basic economic concepts. Where do you get this nonsense? Cripes, take an economics class for god’s sake, or at least pick up a book.”
DU: And this contradicts the fact that “risk-reward” is the concept behind this, how?

It contradicts that, in your words, “risk-reward” is “the most basic economic concept”. I’m happy that you revise your mistakes, even if you attempt it on the sly, as you do here. And again, the reason I don’t simply ignore it, is because TRUE basic economic concepts undermine your analysis, and recognition of them, can steer you back toward reality. Perhaps that is why you drop them.

ME: “1. Deterrence, of course, does not always require “force”, in either of the ambiguous ways you confusedly use it.”
DU: The Webster definition of deterrence: the act or process of deterring: as a : the inhibition of criminal behavior by fear especially of punishment b : the maintenance of military power for the purpose of discouraging attack

Apparently you don’t even know how to use a dictionary. (a) and (b) are examples of usage given by MW. The definition is “the act or process of deterring”, which requires you to look up “deterring”, which subsequently requires you to use “deter”, which is defined as “to turn aside, discourage, or prevent from acting” and “inhibit”. For most words, people are literate enough to not require a dictionary. You are doubly crippled by illiteracy *AND* the inability to use a dictionary.

However you try to grasp at straws, it still remains the case, as I said, that “Deterrence…does not always require “force”…”

ME: “2. When it contradicts the central notion, then, of course, it is relevant to the central notion.”
DU: It enforces the central notion

No. A single principle encompassing the simultaneous defending of rights and violating of rights is a contradiction. It is your contradiction. But you are nowhere near understanding it, as you don’t understand, and seem to have no interest in understanding the meaning of rights.

ME: “3. The meaning of rights, which you seem to understand merely as “blah blah blah” is central to the whole discussion.”
DU: Rights need en-FORCE-ment.

“Need”? Rights “need” only willful communicating entities. One of your conflated uses of “force” is ONE way of defending rights.

“en-FORCE-ment” is yet again you broadcasting your ignorance of the initiation of force principle. Apparently, it will never end.

ME: “Unless you care to rephrase, I can only take you at your word that you believe the masses of innocent human beings who have been brutalized and murdered by law enforcement over the millenia, benefitted from it.”
DU: You can’t be serious? Oh wait…you can. You’re a libertarian. In your mind, Adolf Hitler killing jews is the equivalent of law enforcement in a society operating under the basic tenants of classical liberal thought (as the US constitution provides). Yah…cause the best way to win a discussion is to bring up Adolf Hitler

What is hard to take seriously, is your original claim. Let’s recall that the context is, in your words, “Law enforcement is beneficial for everyone, because law is beneficial to everyone.”

Now, let me get this straight. Your belief, is that laws and law enforcement have *NEVER* (using YOUR choice of universals) been a cause of brutalization or murder? Or, is it your position that is *has* been such a cause, but those who were brutalized and murdered, benefited from it?

It has to be one or the other. OR, you can revise your statement and we can start making headway into why your whole thesis is flawed.

GAAPrulesIFRSdrools November 14, 2011 at 3:55 pm

Ok, government governs best that governs least.

However, even if I accept the premise that free markets improperly price goods with significant externalities-why should I believe the government will recognize those goods and properly price them.

The problem you are ignoring is that no entity is governed by omniscient managers, recognizing and responding to changing conditions-they are governed by cowards, idiots and weakings with little vision or spine, who would pursue their obsessions like Icarus, if not for the threat of competition. The market through transactions great and small ruthlessly punishes the worst decisions and forces import things like practicality, efficiency and effectiveness.

Government is a monopoly, and one that has the ability to conscript economic support with the threat of force-that’s why we have Solyndra-which isn’t the exception-its the rule. Government is free to pursue mindless obsessions-which is why Obama could ignore the external auditor’s “going concern” qualification and give them $$.

Maybe people romanticize the free market-but there’s a lot more romanticizing of government based on a view that has all the sophistication of a seventh-grade civics textbook.

John Muir November 14, 2011 at 11:09 am

“It would NOT hurt the “libertarian” argument to say…gov. needs to stick to what it does well, and not interfere in markets where private players are better positioned to make decisions. That’s not what I’m hearing here, from a lot of people (and that opens the doors for Leftists to ridicule some “libertarians”, justly!, as ignoring reality)

The problem, EG, is finding what government does well. Government is supposed to be limited, but even with the limited powers that it has, it is mostly inefficient and ineffective. The US military, as great as it is, overspends on tons of things. Its goal is not efficiency, its goal is effectiveness. But, during peace time, the military becomes one big bureaucracy filled with those pursuing their own best interests and not the military’s best interest as a whole. Thus, the military has a huge learning curve when it is called on to fight another war.

Perhaps, you can enlighten us as to what does the government do well?

Also, the silly shot at libertarians was unnecessary and stupid. Leftists understand only their ideology, which is why they never see reality nor are they just.

EG November 14, 2011 at 1:41 pm

“it is mostly inefficient and ineffective.”

The operative word here being…mostly. The government is not mostly ineffective or inefficient in what its intended purpose was/is. It is mostly ineffective/inefficient in the additional tasks it has undertaken since then. Its important to recognize the difference.

Inefficient/ineffective are only meaningful if they are compared against an alternative (a constraint). What is the “efficient” private market alternative to…police? If there isn’t one, than the argument can be made that the current arrangement is the most efficient we can do with, given our current constraints.

“The US military, as great as it is, overspends on tons of things.”

Overspends can only be characterized in comparison to something else. In comparison to what? What do you compare the cost of an F-35, to? And, more importantly, what would be the alternative?

“But, during peace time, the military becomes one big bureaucracy filled with those pursuing their own best interests and not the military’s best interest as a whole. Thus, the military has a huge learning curve when it is called on to fight another war. ”

Agreed. What you said here basically is that when the military is not under…competitive pressures…it slacks. When it is under competitive pressures, it generates benefits. Should it then be any surprise that investment in the military, and basic research aimed at the military, spurred tremendous technological innovation and spillover into the civil sectors from the 40s-80s…and little in the 90s-2000s?

IE…when the gov is placed under pressures similar to market pressures (survival pressures), it performs in a relatively beneficial manner.

“Perhaps, you can enlighten us as to what does the government do well?”

Whats the gov does well; law enforcement and military. And it does them better when it is placed under competitive pressures (which necessary come from other government entities). What “libertarians” ought to be arguing for is placing as many gov agencies under competitive market pressures. The effects would be 2 fold; many gov agencies would disappear, or be transferred to the appropriate level of gov. And 2) those that would survive would be more beneficial to society (ie specialization in what it does best, which is the reason it exists in the first place).

“Also, the silly shot at libertarians was unnecessary and stupid. Leftists understand only their ideology, which is why they never see reality nor are they just.”

I can say the same thing for a lot of “libertarians” here. A “lot” of them operate no differently than the leftists. And that’s really sad. I mean if you’re going to say “all government is, is putting a gun to you head”, then the conversation ends, and we can all go home assuming that the past 10,000 years of social development, development of laws, cities, courts, law enforcement, of property rights etc etc never happened.

John Muir November 14, 2011 at 4:15 pm

“The government is not mostly ineffective or inefficient in what its intended purpose was/is. It is mostly ineffective/inefficient in the additional tasks it has undertaken since then. Its important to recognize the difference.”

No. The government’s incentives make if mostly ineffective and inefficient for its intended purpose as well as for additional tasks that it may undertake since then. Incentives matter. The incentive with government officials is to do what is in their best interests, which means almost everything that they do will not be effectively or efficiently done.

“What is the “efficient” private market alternative to…police?”

There are many private security companies that are more effective and efficient than the police. Private security companies are much more effective many times than the police because when seconds count the police are only minutes away.

” If there isn’t one, than the argument can be made that the current arrangement is the most efficient we can do with, given our current constraints.”

There are more effective options. Please see previous comment.

“Overspends can only be characterized in comparison to something else. In comparison to what? What do you compare the cost of an F-35, to? And, more importantly, what would be the alternative?”

No. People, and government, overspend all the time and buy things that are just not needed. Look how many weapons development programs have been cancelled after spending hundreds of millions of dollars.

“What you said here basically is that when the military is not under…competitive pressures…it slacks.”

The military is never under competitive pressure. It is part of the government. During war, it is under survival pressure. That causes it to spend huge sums to effectively, but not efficiently, prosecute a war.

“When it is under competitive pressures, it generates benefits. Should it then be any surprise that investment in the military, and basic research aimed at the military, spurred tremendous technological innovation and spillover into the civil sectors from the 40s-80s…and little in the 90s-2000s?”

Another straw man argument. You assume too much. Individuals came up with ideas that were used to facilitate the military applications. Individuals later used took those military applications and created something that the consumer wanted. In other words, those ideas would likely have come about anyway. You are working too hard to say that they would ONLY have been come up with by spending on the military.

“IE…when the gov is placed under pressures similar to market pressures (survival pressures), it performs in a relatively beneficial manner.”

Key word: “survival pressures.” I would be more physically fit is I pushed myself to the limits of my endurance every day. But, if I kept that up for very long, I would die. The technological developments resulting from putting the government and the military under survival pressure is very bad for everyone’s long-term freedom, health, and survival.

“Whats the gov does well; law enforcement and military. And it does them better when it is placed under competitive pressures (which necessary come from other government entities).”

Any expectations of technological improvements resulting from placing government and the military under survival pressure is, at best, wishful thinking and, at worst, crazy because it involves imprisoning, maiming, and killing people.

“What “libertarians” ought to be arguing for is placing as many gov agencies under competitive market pressures.”

No. Libertarians prefer peace and prosperity to government and the military working more effectively, though not more efficiently, in a war.

” those that would survive would be more beneficial to society (ie specialization in what it does best, which is the reason it exists in the first place).”

But, at a cost too terrible to imagine.

“I can say the same thing for a lot of “libertarians” here. A “lot” of them operate no differently than the leftists. And that’s really sad. I mean if you’re going to say “all government is, is putting a gun to you head”, then the conversation ends, and we can all go home assuming that the past 10,000 years of social development, development of laws, cities, courts, law enforcement, of property rights etc etc never happened.”

No. They know that government, if too powerful, will result in the loss of life, liberty, and property. War is a bad idea to improve government effectiveness at the expense of people. Government is necessary because people do wrong things. But, it is necessary to limit government because the people who run the government do wrong things.

JWH November 14, 2011 at 10:37 pm

A little fact to support your argument. There are 5 times as many private security forces as police forces. So it would appear the market provides a cost effective solution to many citizens when compared to a state sponsored solution.

John Muir November 14, 2011 at 10:47 pm

Thanks, JWH! I appreciate the facts.

vikingvista November 14, 2011 at 10:49 pm

I didn’t know that number, but I’m not surprised. There is almost no task that government police do, that some private firm doesn’t also do. That includes investigation, surveillance, patrolling, and even arresting. I even know of an example of a small town that dropped its contract with the county sheriff to patrol, because a private firm offered twice the surveillance coverage at half the cost.

EG November 15, 2011 at 2:34 pm

?? So a mall cop is the same as an LAPD cop. Hmm. Yeah.

John Muir November 15, 2011 at 2:36 pm

No. But, the mall cop will be there on the spot to prevent or deter any crime at the mall. The problem with the LAPD, as many residents will tell you, is that when seconds count the LAPD are only 30 minutes away.

vikingvista November 15, 2011 at 3:00 pm

“So a mall cop is the same as an LAPD cop?”

No, not at all. A mall cop protects people and property. An LAPD cop takes reports.

EG November 15, 2011 at 2:58 pm

“No. The government’s incentives make if mostly ineffective and inefficient for its intended purpose as well as for additional tasks that it may undertake since then. Incentives matter.”

Incentives only matter in as far as they effect results. the question is not what the gov. incentives are. The question is…WHO is BETTER incetivized to deliver better results? If the answer to that question, for a given circumstance, is…no-one…than that’s all there is to discuss.

Who is better incetivized then government, to provide law enforcement? Unless you have an answer to this for me, then you agree with me.

“There are many private security companies that are more effective and efficient than the police. Private security companies are much more effective many times than the police because when seconds count the police are only minutes away. ”

Seriously? Now we’re just having a silly discussion. Yes there are private security companies. Yes they are better than the police in given circumstances. but what are these circumstances? they are better when providing security to…PRIVATE locations. What about the public locations?

Basic economics…property rights. Libertarians have no solution to the provision of public safety in PUBLIC localities. That’s why government has been created.

“There are more effective options.”

Of course there aren’t. Every classical liberal thinker, and practice, has come up with the same conclusion so far; there is no market alternative available to law enforcement or military. Doesn’t mean there won’t be one in the future, but right now there isn’t. Till you provide one, you got no argument.

“No. People, and government, overspend all the time and buy things that are just not needed. Look how many weapons development programs have been cancelled after spending hundreds of millions of dollars.”

Again, without an alternative, the argument is pointless. Overspending can only be categorized in terms of two factors; the benefits it provides, and the alternatives available.

“The military is never under competitive pressure. It is part of the government. During war, it is under survival pressure”

They’re the same thing.

“In other words, those ideas would likely have come about anyway.”

Very likely, not.

“The technological developments resulting from putting the government and the military under survival pressure is very bad for everyone’s long-term freedom, health, and survival.”

Again, you completely miss the point of the argument.

“Any expectations of technological improvements resulting from placing government and the military under survival pressure is, at best, wishful thinking and, at worst, crazy because it involves imprisoning, maiming, and killing people. ”

Again, was the jet engine not the result of gov. investment? Was the jet engine not worth it because some people died as a result of it? All you have to do is say…yes…and I’ll be happy :)

“Libertarians prefer peace and prosperity”

Peace and prosperity come about through certain results. if you don’t focus on the means of getting those results, then “libertarians” are first-grade irrelevant dreamers (not that one couldn’t have gotten that idea just by looking at Ron Paul fans)

Peace is an ideal. Peace exists as a result of a deterrence against war. HOW do you provide a deterrence against war? If you don’t have an answer to that…then again…you got nothing.

“But, at a cost too terrible to imagine.”

A more beneficial police for is too terrible to imagine? Wow

“No. They know that government, if too powerful, will result in the loss of life, liberty, and property.”

If too powerful? Yeah…that’s not remotely what we’re discussing here.

“War is a bad idea to improve government effectiveness at the expense of people”

?? Again, totally ridiculous statement, since no one is asserting that. What I’m saying is that, given circumstances like that, beneficial results can be attained. If you say “no!”, then again I’d like to hear your opinion on the jet engine.

“Government is necessary because people do wrong things. But, it is necessary to limit government because the people who run the government do wrong things.”

What are you, 13? Why do “libertarians” insist on talking to people as if no one else has exactly the same ideas, or as if no one has ever heard of classical liberal concepts? Nobody is saying anything otherwise..and yet all you people think is that everyone is saying the opposite.

anthonyl November 14, 2011 at 11:32 am

Origin of nuclear power: WWII and our attempt to win it by pulverizing the Japanese people because their government and military wouldn’t let them surrender. Yes this was a government funded effort. I’ll concede that one. Fun times yeah!

Photovoltaic cells: First built in 1883 by an American inventor. The space program actually slowed down the development of affordable solar cells because manufacturers only produced the most expensive types for deep-pocketed space program.

John Muir November 14, 2011 at 11:34 am

anthonyl, thank you for exploding the myth about nuclear power being perpetrated by Disingenuous Muirgeo.

EG November 14, 2011 at 1:15 pm

Way to turn the world on its head. Yeah nuclear power only brought us atomic bombs. You’re right. Nothing else happened.

John Muir November 14, 2011 at 1:23 pm

No, but it took government to use it to kill thousands of people. People make up the government and they make up the businesses and markets. People, as government, take an idea and it is used by government to coerce others. People, as individuals who are looking to make some money, take an idea and find out how it can be used so that consumers will want to buy that product. That’s a big difference.

EG November 14, 2011 at 2:23 pm

Ehhh…would nuclear power have existed were it not for the development of the nuclear bomb? Save the moral arguments for philosophy class…

John Muir November 14, 2011 at 2:25 pm

“Save the moral arguments for philosophy class…”

You really don’t know much about economics, do you? See Adam Smith, “The Theory of Moral Sentiments”.

Jon Murphy November 14, 2011 at 8:15 pm

““Save the moral arguments for philosophy class…””

Wow…and people say Libertarians are heartless.

vikingvista November 15, 2011 at 12:09 am

“Save the moral arguments for philosophy class…”

Yeah. Employing moral arguments here would be immoral.

EG November 15, 2011 at 3:07 pm

“You really don’t know much about economics, do you? See Adam Smith, “The Theory of Moral Sentiments”.”

The theory of moral sentiment has nothing to do with economics. Economics is about the basic concepts of figuring out how to trade off one thing for another.

“Yeah. Employing moral arguments here would be immoral.”

It would be irrelevant. If the discussion was whether nuclear energy or nuclear bombs were “moral”, then yes. If the argument is whether the investment in nuclear power and nuclear bombs are…worth while…that’s an argument of numbers.

Darren November 14, 2011 at 7:40 pm

Origin of nuclear power

I thought it was at least partly a kind of arms race with the Germans. However, their research was way off track. We just didn’t know it at the time.

Sam Grove November 14, 2011 at 11:23 pm

government and military wouldn’t let them surrender.

Actually, the Japanese had attempted to surrender (prior to the dropping of the atomic bombs) on condition of keeping their emperor. Truman rejected their efforts, insisting upon unconditional surrender

vikingvista November 14, 2011 at 11:51 pm

Yeah, but that was a small price for Truman to pay for the glory of an unconditional surrender.

paul November 14, 2011 at 1:37 pm

business respond to different incentives than governments. they often have two different goals. governments are better at some things and business other things. to say government has an intrinsic value of being bad at investing in a particular area assumes the incentives of business are more aligned to the goal (or at least the externalities caused by the business incentives). Government may have a different goal. That does not make it better but we are not always comparing the same things.

WhiskeyJim November 14, 2011 at 2:53 pm

Oil is a highly efficient form of energy. For every dollar you have to spend extracting it from the ground and refining it, you get $6 worth of energy. That’s a 600% Return on Investment. Some of these other energy sources, you’re lucky if you get 2-to-1 or 1.5-to-1. In some cases, like ethanol, you are actually loosing (for every dollar of energy spent producing and refining ethanol, you get about $.60 of energy back).

IOW, energy is a function of mc2, and illustrates the fallacy of government ‘research.’

There is only so much energy we can draw from renewable sources. They are limited, either by their velocity or the distance that solar energy must travel to reach the earth. Just like greens hate that a 1000MW hydroelectric dam eats up a whole valley, but so must solar and wind; more so in fact.

But nuclear energy does not. A 1000-MW coal plant is fed by a 110-car railway engine every 30 hours 300 times a year. A nuclear reactor refuels with six tractor-trailers every eighteen months.

We knew back in the 50s that nuclear weapon technology was a less than ideal starting point for nuclear energy with other alternatives available. Still, the government insisted and persisted.

Now it looks like China has taken up those alternatives because USA will not. They have licensed those moldy old American patents. It also appears they have figured it out; a nuclear reactor that can not melt down and therefore does not require all the safe-guard systems which comprise 4/5ths of its cost to manufacture.

If that is true, then nuclear will provide a viable alternative that is even cheaper than oil and natural gas, which makes sense since it is the densest fuel. And thorium is as available as lead. Happily, USA be able to license it from the Chinese.

The ironic thing about government research is that it has so insistently ignored the densest fuel (with therefore the most promise) all these years, where existing technology already exists and demonstrated promise. Further, because of the dollars involved, government could make its strongest argument for intervention into the market.

Instead, it is off screwing around with solar panels and wind farms, where because of E=mc2 and lack of ready storage it could never represent a foundational new future.

Darren November 14, 2011 at 7:42 pm

They are limited, either by their velocity or the distance that solar energy must travel to reach the earth.

Not to mention solar and wind (and crops to grow alternative fuel) require a take an awful lot of land area.

robert_o November 15, 2011 at 1:42 am

E=mc^2 is only relevant for nuclear reactions (fusion or fission), or other esoteric forms. Solar, wind, hydro, geothermal (and other “renewables”) do not use or directly rely on E=mc^2.

Oil is limited by covalent bond energy (t.k.q1.q2/r^2)
Wind, geothermal and hydroelectric are limited by kinetic energy 1/2 mv^2.
Solar (photovoltaic) is limited by very many things. Distance from the Sun is a minor factor given that the Sun is so far away.

Whichever energy container has higher density depends on the constants of the universe. In this universe, it happens that covalent bonds are pretty good.

James N November 14, 2011 at 3:11 pm

From a disinterested third party.Victory clearly goes to John Muir and vikingvista. I can’t tell if EG knows he’s wrong and is simply digging in his heels or doesn’t have the knowledge to realize he’s wrong. Not sure it matters.

EG November 15, 2011 at 3:09 pm

Ow shucks!

Darren November 14, 2011 at 6:56 pm

They should have just given a random selection of 100,000 people access to a 1 million dollars apiece. They would be required to invest it, given some reasonable restrictions. They could then receive 1 percent of any profit that was made off that investment. I bet that would have been much more efficent.

anthonyl November 14, 2011 at 9:44 pm

When you think about the billions of taxpayer dollars spent on basic research in the hope that it will lead to something usefull it’s sickening!
There really is no such thing as usefull basic research.  It’s just a scam to get some idiot’s useless interest funded.
If something is worth finding out, that is leads to a profitable outcome, a company will fund it.  Otherwise someone will put their own neck on the line to fund it and profit from it.

EG November 15, 2011 at 3:10 pm

“There really is no such thing as usefull basic research.”

Wow.

Wow.

John Donnelly November 16, 2011 at 1:28 pm

The government may have decided it was in the nation’s best interest to reduce our dependency on oil as an impetus to play the VC. The goal seems alright but they should have merely let the market work it out by ending supports for Oil no?

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