Sunday, February 27, 2005

The Free Market Mentality - The Neoconservative/Libertarian Pipe Dream

I have to admit that when I was younger and more naive, I was a big proponent of capitalism and the free market. As an inquisitive and scientific mind, I enjoyed the beauty and relative simplicity of the free mark model. Over time, I have come to appreciate that we live in a complicated world, and that the free market model does not fit all situations that it is applied to, and that industry regulation is appropriate in certain cases.

I'll start with an extreme example - The February 18th episode of the Al Franken Show, broadcast from the Conservative Political Action Conference, featured Michael Medved. If you download this episode, fast forward to 30 minutes in to listen to the Medved segment.

Anyways, Medved appeared on Franken's show and argued that the 1964 Civil Rights Act should never have passed. His argument was that the government has no business regulating private behavior. Medved's argument is that market forces would've eventually forced all corporations to refrain from racist and segregationist business and hiring practices, because they would've faced protests and boycotts if they continued in their racists and discriminatory practices. This argument is wrong on so many levels -- First of all, the Government has no business regulating individual behavior? Are you serious? Do you believe that market forces would prevent corporations from polluting the environment, hiring child workers, and forcing workers to work in hazardous environments.

Al: So you think it should be legal for restaurants to ban black people from going into their restaurant?

Michael: Yeah...that restaurant today would be closed.

Do you see how naive these people are? In a recent blog entry, I focused on the behavior of the Wal*Mart Corporation. Wal*Mart was recently sued for ignoring child labor laws. They shut down a store in Canada that was attempting to unionize, they have been caught destroying documents and evidence, they are responsible for increasing the US trade deficit and for destroying smalltown America. Yet, market forces have rewarded Wal*Mart by making the five members of the Walton family among the ten richest people in the world, and making Wal*Mart the number one employer in the United States. In the end, Wal*Mart is a huge net destructive force, and a harbinger of things to come, as corporations continue to merge into massive conglomerations, while the neocons continue to push for further deregulation in every market.

An issue that I continue to address is the urgency in developing a national renewable energy policy. This is a task so important that it goes well beyond the profit margins of individual corporations and well being of the economy.

The chief argument against the use of renewable energies is that they are simply too expensive. The argument is that market forces are such that eventually we will switch to renewable energies when the market conditions dictate that the cost of alternative renewable energy becomes cheaper than conventional energy. Think about this for a minute -- We have a finite amount of usable conventional energy on this planet, and in a relatively short 200 year period since the industrial revolution, we have progressed to a point where we are entirely too dependent on resources that are being rapidly depleted. That is the true reality - not a self-imposed economic market.

Take a look at this blog entry about Oil Energy Future from Alternative Energy Blog. ExxonMobil is busy convincing the world that we should prepare for a switch from an oil-based economy to a liquefied natural gas-based economy. Notes from the conference can be found here. They are advocating the switch from one finite, non-renewable energy resource to another finite, non-renewable energy resource. Their argument is based on the this does not represent a good choice for our country or for our environment.

On the issue of developing a renewable energy infrastructure, individual corporations are ill-equipped to make sound decisions. General Motors decided to destroy it's entire line of EV1 vehicles, despite the fact that they have received a petition with a list of buyers wishing to purchase the vehicles. The argument on economic cost alone is a sham - The problem is that economic cost does not properly factor in the cost of environmental degradation, of continued reliance on a rapidly depleting resource, and of the wars resulting from the necessity of maintaining a readily available supply of oil.

One could argue that the cost of oil is actually much higher than the $1.90 / gallon we currently pay at the gas pump. This cost does not factor in the hundreds of billions of dollars of tax money we are spending on the Iraq war. This cost does not factor in the cost of global warming. This cost does not factor in the future we are mortgaging by rapidly depleting the world's remaining reserves of oil.

Personally, I believe that the government should impose tariffs on the price of gas, and use the proceeds to develop a renewable energy infrastructure. The argument against this is that tariffs are an artificial economic barrier -- but, that is simply not the case. The cost of continuing to rely on oil must be factored into the cost of gas. Doing so will force the American people to re-evaluate their priorities. Why do we continue to live life day after day, blissfully ignorant of the fact that we are mortgaging the future of this country - the future our children will one day have to live with. Higher gas prices will lead to increased development and use of mass transportation, and will allow alternative, renewable energies to compete on a level playing field with conventional energy. The economy does not represent reality - it is an approximation of reality, which must sometimes be manipulated, tweaked, or altogether ignored, in order to produce an outcome that is beneficial to our society as a whole.