[Snark Factor:  Ridiculously High]

In honor of Earth Day, yesterday Dr. George Reisman, Professor Emeritus of Economics at Pepperdine University and author of Capitalism: A Treatise on Economics, put up a fun little post that mocks the full-employment arguments made by President Obama on behalf of environmentalists and investors in the wind and solar power industries.

On the comment thread, I couldn`t resist expressing my appreciation, while introducing newer readers to the deeper challenge to which Dr. Reisman invites his readers:

I too have enjoyed another delightful article from Dr. Reisman; bravo!

But Dr. Reisman`s style does seem to present problems of interpretation for some readers, whom do not seem to understand that while Dr. Reisman appears to simply be bashing environmentalists or environmentalism generally (by focussing on the most absurd arguments that some of them offer), he is in fact challenging his readers to do precisely what he has studiously avoided.

That is, far from simply pulling the wings off of flies as he might seem to some, Dr. Reisman is actually suggesting that serious students of economics and libertarian approaches to society should diligently:

• - seek to engage others productively and with sympathy, in a manner carefully designed to improve the functioning of markets and ancillary institutions that enhance plan formation across society;

  - note that there are many important, valuable open-access/unowed resources and government-owned resources - in which property rights and pricing mechanisms are working poorly at best;

  - acknowledge that while proposed "solutions" offered by environmentalists may be misguided, enviros have legitimate preferences as to how such resources should be protected, managed and distributed; and

  - recognize that the concerns of enviros frequently arise in response to government interventions have clearly benefitted powerful insiders, including wealthy investors and large enterprises, while shifting costs and risks more broadly.

  As a result, Dr. Reisman`s tongue-in-cheek posts are in fact searing indictments of the status quo and tbe fat cats who are using government to stifle open competition, consumer choice and innovation, while frequently generating large external costs. Unlike some who spoil the fun by engaging in the pedestrian task of spelling out the problems with the status quo that enviros are right to be dissatisfied with, Dr. Reisman treats his readers as adults by bracingly challenging them to use their thinking caps and to clear their own heads.

  For those for whom this task is too difficult, perhaps this piece by Lew Rockwell might be a good start:

  "Just who is in charge of getting electricity to residents? A public utility, which, in the absurd American lexicon, means "state-run" and "state-managed," perhaps with a veneer of private trappings. If you look at the electrical grid on a map, it is organized by region. If you look at the jurisdiction of management, it is organized by political boundaries.

  "In other ways, the provision of power is organized precisely as a central planner of the old school might plan something: not according to economics but according to some textbook idea of how to be "organized." It is "organized" the same way the Soviets organized grain production or the New Deal organized bridge building.

  "All of centralization and cartelization began nearly a century ago, as Robert Bradley points out in Energy: The Master Resource, when industry leaders obtained what was known as a regulatory covenant. They received franchise protection from market competition in exchange for which they agreed to price controls based on a cost-plus formula — a formula that survives to this day.

  "Then the economists got involved ex post and declared that electrical power is a "public good," under the belief that private enterprise is not up to the job of providing the essentials of life.

  "What industry leaders received from this pact with the devil was a certain level of cartel-like protection, the same type that the English crown granted tea or the US government grants first-class postal mail. It is a government privilege that subjects them to regulation and immunizes companies from business failure. It's great for a handful of producers, but not so great for everyone else.

  "There are many costs. Customers are not in charge. They are courted only for political reasons but they are not the first concern of the production process. Entrepreneurial development is hindered. Our current system of electrical provision is stuck in time. Meanwhile, sectors that provide DSL and other forms of internet and telecommunication services are expanded and advancing day by day — not with perfect results but at least with the desire to serve consumers. ...

  "How New York and California consumers would adore a setting in which power companies were begging for their business and encouraging them to turn down their thermostats to the coldest point. Competition would lead to price reductions, innovation, and an ever greater variety of services — the same as we find in the computer industry.

  "What we are learning in our times is that no essential sector of life can be entrusted to the state. Energy is far too important to the very core of life to be administered by a bureaucracy that lacks the economic means to provide for the public. How it should be organized we can't say in advance: it should be left to the markets. Whatever the result, you can bet the grid would not look like it does today, nor would its management be dependent on the whims of political jurisdiction.

  "What we need today is full, radical, complete, uncompromised deregulation and privatization. We need competition. That doesn't mean that we need two or more companies serving every market (though that was common up through the 1960s). What we need is the absence of legal barriers to enter the market."

  Thanks, again, Dr. Reisman, for challenging us, and not pandering to the dullest and laziest among us, the way Lew Rockwell does!

  Your admiring pupil (and fellow enviro-hater),

  TT

• Published: April 23, 2009 5:32 AM

For those who think that Dr. Reisman is being serious in his one-sided attack on enviros while ignoring the problems of ongoing rent-seeking by entrenched statist corporations, I would be pleased to refer to other posts in which he is clearly posting tongue-in-cheek and intends no rancor or imbalance.  A good example would be his light-hearted post in March 2007, Global Warming: Environmentalism’s Threat of Hell on Earth, in which Dr. Reisman appeared to seriously argue that

"there is a case for considering the possible detonation, on uninhabited land north of 70° latitude, say, of a limited number of hydrogen bombs. ... This is certainly something that should be seriously considered by everyone who is concerned with global warming and who also desires to preserve modern industrial civilization and retain and increase its amenities. If there really is any possibility of global warming so great as to cause major disturbances, this kind of solution should be studied and perfected. Atomic testing should be resumed for the purpose of empirically testing its feasibility."

While apparently serious, how could this possibly be a libertarian, nonstatist proposal?  The answer clearly MUST be - since Dr. Reisman is a lover of freedom and markets, and not of big government, goverment-run mega projects or statist corporate rent-seeking  - that Dr. Reisman was NOT being serious.  Instead, in his usual playful manner, he was simply inviting his readers to see through his words, and to productively engage those who are concerned with climate or other commons issues, on the basis of a cool consideration of libertarian and market principles.

Inquiring minds might like to note that I have remarked on Dr. Reisman`s  productive and insightful playfulness on a number of other occasions, on top of comments on his environment-related posts,  which have been fertilizing the LVMI pages since the 2005 Earth Day.

Q.E.D.