March 13, 2004

Market v Political Economic Innovation

In Brownian Notions, YHN posits a potential left/right alliance over electric/hybrid vehicles. It's likely not going to happen because the fault lines aren't where he thinks they are. The following thought experiment demonstrates the effect.

I'd love to see the US turn to solar power.
I'm against solar power.
The above two statements are part of a sane, consistent ideology.

I would love to see the US use solar power because I see realistic future scenarios where such power sources are less polluting, less labor intensive, and cheaper than current energy sources. I also see solar power as a method of reducing the number of ideological compromises we currently make with repressive dictatorships because these repressive dictatorships sit on top of large energy sources.

I'm against solar power because the only reason that such questions are even asked is in a political quest for economic subsidies extracted through the tax system. Such subsidies are distortive and prevent or delay the emergence of a truly useful solar power system.

The actual left/right fault line is the usual question of the use of political coercion to achieve economic desires. As all libertarians believe, I'm mostly against such things, especially where there are free market paths of achieving the same goals.

Getting back to electric/hybrids there are certain circumstances where such things make sense and in those scenarios the market will produce vehicles that use that sort of powerplant. Distorting this market via subsidies wastes an awful lot of money that could have been used for other things and would have created a better world in ways that are too complex to put on a bumper sticker and are, because of the subsidies, unknowable alternative futures.

Such 'strange bedfellows coalitions' exist because each side, for its own reasons, is willing to give up something of its desires in order to achieve a goal that is largely common. If free marketers are to give up subsidies, what is the left half of this coalition supposed to be giving up?

Posted by TMLutas at March 13, 2004 08:07 AM