Hostility to Markets?

Our delightfully lively comment section points us toward this Jesse Taylor post at Pandagon responding to an editorial in the Wall Street Journal:

Most of my objection to oil exploration doesn’t come from the environmental effects of the drilling itself (although that’s still a rather large part of it), but rather the frank admission of those supporting it that the drilling is being done in lieu of any rational plan to decrease oil use or pollution from fossil fuels.  Supply-side energy policy – and that’s what this is, policy focused entirely on controlling costs through supply as if demand is simply an ever-growing beast – is, for all its supposed capitalist inspiration, anti-innovation and hostile to the idea of a new energy marketplace.

There are a couple of problems with this. The main problem is that it assumes that energy use is or should be determined by some sort of centralized government planning.  The secondary problem is that liberals haven’t offered up plans that are likely to work of their own.

An economy as complex as America’s cannot simply be planned; the uncertainties and unknowns are too great. This is why, from Hayek on, economists have tended to agree that the best way to deal with the problem of diffuse information is a market rather than centralized control.

And the various ideas on how to plan our energy use — carbon taxes, cap-and-trade, alternative energy subsidies — are unlikely (at best) to work.  Look at the failure of ethanol subsidies, for a small but obvious and recent example.  Not only has the policy not created a viable new energy source, it’s been environmentally harmful and has had unintended consequences on the world food supply.  Carbon taxes and cap and trade pose similar problems.  Detailing them here would take far too long — there’s enough material for multiple books — but for a lengthy discussions of what those problems are, I suggest reading this discussion between liberal environmental writer Ryan Avent and Jim Manzi.  (It’s also worth looking at Manzi’s long explanation of why he opposes a carbon tax.)

Additionally, I don’t think you’ll find many free-marketers who are actually hostile to the idea of new energy sources. Instead, what you’ll find is skepticism that government regulation is going to be effective at spurring developing of those new energy sources combined with the quite reasonable assumption that intervention comes with clear economic consequences.