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Kerry’s Energy Socialism

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If the Republican and Democratic presidential candidates were forbidden to offer proposals based on collectivist economic thinking, they would have to keep mum the entire campaign.

We are in for three months of unrelenting nonsense from President George W. Bush and Sen. John F. Kerry. That wouldn’t be so bad if most people recognized it as nonsense. But since education these days is intended more to create quiescent “good citizens” than skeptical thinkers, most people will be taken in by these charlatans.

Last week Kerry did what presidential candidates love to do: promise “energy independence.” Run like the wind when you hear that term. It is a euphemism for the central planning of our economic activities. Kerry has not yet learned why socialism failed.

Kerry’s energy plan differs from Bush’s in only minor ways. In response to rising oil prices and instability in the Middle East, Kerry proposes that the government lead an effort to deemphasize foreign oil, lower gasoline prices (and oil company profits), increase efficiency, and stimulate the development of alternative fuels. According to a campaign news release, “The Kerry-Edwards energy plan will harness the full force of American ingenuity to create the energy of the future and make America independent of Middle East oil. While taking a series of short-term steps to help families and businesses by bringing down energy prices, their plan will undertake a comprehensive, long-term strategy for energy independence that also creates new, good-paying jobs in the process.” What will he do on January 21, create a perpetual-motion machine?

What is not said is that even attempting this would require massive government power to manipulate private economic activities. Kerry assumes that his nationalistic appeals, oil-company bashing, and promises of low prices and high-paying jobs will distract us, much as an infant can be distracted by the sound of a rattle. Close examination of his plan should cause concern to anyone who understands freedom and the virtues of free enterprise.

For example, Kerry promises to set up a $20 billion trust fund, financed from existing offshore oil and gas royalties, to increase the fuel efficiency of vehicles and promote the development of alternative fuels. He apparently learned nothing from economics and history. As long as energy is scarce, the free market will contain the right incentives for personal conservation, increased efficiency, and entrepreneurship aimed at more-secure and alternative sources of energy. To propose that government should direct these activities is to believe that bureaucrats know more and will make wiser decisions than hundreds of millions of people with intimate knowledge of their own needs and capacities in the decentralized marketplace. In other words, it’s like believing in Santa Claus.

Where was Kerry during the late 1970s when the Carter administration poured millions of dollars into synthetic-fuel programs with nothing to show for it? Has he bothered to look at the results of mandated fuel-efficiency for cars? When the cost of driving goes down, people drive more, so no gasoline is saved. But when cars are made lighter and smaller, which is partly how efficiency has been achieved, they become less crash-worthy and highway deaths increase.

Regardless of what Kerry says, government does not know best. Its economic record is dismal. Bush has no edge here. His energy plan also puts government at the center, handing out subsidies and tax incentives to those who pursue the administration’s objectives. Both are big-government men.

In a sense, we do need an energy policy — to undo the pervasive government control that exists today. The military presence in the Middle East is a subsidy from the taxpayers to the oil companies. If they want that oil, let them pay the full price for it, including security. Of course that will mean consumers will pay, but that’s as it should be. If the price is too high, consumers will conserve and entrepreneurs will be motivated to produce more-efficient products and find cheaper sources of energy, oil and otherwise. For this to happen, however, all energy regulations should be repealed.

A rational energy policy would consist of six words: government, get out of the way!

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    Sheldon Richman is vice president of The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.