Guest essay by Roger E. Sowell, Esq.5
Recently on WUWT, a post1 by Willis Eschenbach was made advocating the almost doubling of energy consumption worldwide, by increasing energy use per capita in the poorest countries. This post addresses the issue of increased energy consumption and poses a few questions. I say at the outset that I agree that improving the quality of life is an important goal, and energy consumption per capita is probably a good indicator of quality of life.
First, what do the following countries all have in common? Nigeria, Indonesia, Algeria, Libya, Iran, Iraq, Venezuela, Mexico, Russia, Canada, and United Kingdom?
Each country is a major oil producer and exporter, but with Indonesia and UK experiencing decreased exports recently. The first seven countries all are, or were, a member of OPEC, the Organization of Petroleum Exporting Countries.2 Yet, all but the last two, Canada and United Kingdom, have below-average GDP per capita, gross domestic product, according to the World Bank statistics.3
Second, while it is true that a correlation can be made between energy consumption per capita and quality of life, there must be something else at work that prevents the oil-rich countries Nigeria, Indonesia, Iran, Iraq, and the others from enjoying that high quality of life. There are fundamental issues that prevent energy-poor countries from copying the success of another energy-poor country, Japan. Japan has essentially no natural energy resources, but found the means to import energy as oil, coal, and liquefied natural gas, LNG, to power its industry, commerce, and residences.4
Until some fundamental issues are resolved, simply increasing energy consumption in the poorer parts of the world will not improve the quality of life.
Among these fundamental issues are, in no particular order, economic system, a fair justice system, and the political or governing system. I don’t imply that I am an expert on any of these countries, or their economic systems, justice systems, or political systems. I have done a fair amount of study, and also have traveled to and worked extensively in five of the countries mentioned above: Indonesia, Mexico, Canada, Japan, and UK.
Perhaps the most important issue is the political system, for the justice system and economic system may depend on who is in power and the type of power exerted. It may be that a representative constitutional democracy is a favored political system. It may be that the degree of official corruption is a major factor. It may also be that civil discord is a major factor. Having a modest degree of government regulation to ensure fair treatment, but not an onerous burden, is surely important.
A fair justice system ensures that those with a legal grievance will be heard, and treated fairly according to laws that do not change on someone’s whim. Having a contract honored, or being allowed to bring a lawsuit for breach of a contract, are important issues. Having a means to collect on a judgment is also important, as it does little good to win a lawsuit, be awarded money as damages, and be unable to collect the money.
A brief anecdote to illustrate the importance of a justice system: during my time in law school, US Supreme Court Justice Anthony Kennedy spoke to an assembly of professors, staff, students, and guests. Justice Kennedy spoke on many things that night, but what I most remember is him telling us that he had met recently with members of Iraq’s judiciary. It was soon after the war to remove Hussein ended and Iraq was building up its new government and judicial system. According to Justice Kennedy, the Iraq delegation thanked him tearfully for bringing to the world the US Constitution and its many provisions for legal rights, especially the first ten Amendments known as the Bill of Rights. They intended to copy as much of those rights as they could into their new governing documents.
The economic system may be important, perhaps not as important as other issues. Economic systems in the oil exporting countries range from absolute monarchies to dictators to elected representative.
It is interesting to note that OPEC has existed for more than 50 years, having been founded in 1960, so ample time has passed to allow oil-rich countries to improve their standard of living. A few have, such as Saudi Arabia, but most have not. Clearly, other factors must be addressed besides access to basic energy, if the goal is to improve quality of life.
It is further interesting to note that even within a country with high energy consumption per capita, such as the United States, enormous differences exist between citizens and their energy consumption. It may be that energy per capita in the US is distributed according to a bell curve, with a few percent of the population consuming vast amounts of energy in their mansions, jet airplanes, and fast motorcars. Likewise, a few percent of the population are poor and have very low energy consumption. The majority of the population likely fall in the middle, with about average energy consumption. Clearly, again, other factors must be at work that prevent the poorest from achieving a better quality of life along with higher energy consumption even in an energy-rich nation like the US.
Citations
1 WUWT, article of August 21, 2013 “Double The Burn Rate, Scotty”
2 OPEC membership at www.OPEC.org
3 World Bank GDP per capita, 2012 data.worldbank.org/indicator/NY.GDP.PCAP.CD
4 EIA data for Japan www.eia.gov
5 The author is an attorney in California, practicing in engineering, science and technology law. He is a frequent speaker on climate change, energy, and engineering issues. He worked worldwide as a chemical engineer in the energy industry with oil refining, petrochemicals, basic chemicals, and power plants. He blogs at http://sowellslawblog.blogspot.com
I suppose the bottom line is that cheap, readily available energy facilitates wealth producing activities (just as judicial systems do).
If you have not got these activities in place, or in a position where they can grow, no amount of energy will help.
Roger E. Sowell:
That is an excellent essay. Thankyou.
As you imply, any benefits of anything (including greater energy supply) are accrued by the powerful alone in the absence of a Rule Of Law and its enforcement.
This was touched on in the thread which discussed the (also excellent) essay by Willis Eschenbach that has prompted your essay. But that thread demonstrated few who read his essay appreciated the limitations imposed by the issues which you raise.
Furthermore, many who post to WUWT often demonstrate a failure to understand that choice of a political system is irrelevant to any society which lacks a Rule Of Law and its enforcement. Local tyrants will always prevail where they are not constrained, and this true in all societies whether or not they are ‘developed’ (e.g. Al Capone, Kray twins, etc.). But in societies where people are at subsistence levels the effects of tyrants can reduce the living standards of the poor to below subsistence levels.
Again, thankyou for highlighting this important issue.
Richard
Roger – What you say is IMHO correct, but Willis’ argument was that increased energy availability is a necessary condition, not a sufficient one. Willis is therefore absolutely correct to argue that in order to lift more people out of poverty it is necessary to increase energy availability. I don’t think anyone is going to argue against the idea that other things are needed too.
The system correlates with the individual and the culture. Yes indeed there is more to it. The economy and the justice system correlate (depend on each other both being equally advanced).
How does a woman who is controlled by her family to not have any personal choice in whom she marries, and must follow a community imposed role all her life, imposed even by force, ever manage to extend her mind to understanding principles of democracy, which require free thinking individuals who can solve problems by thinking about their own personal choices?
How do you free the authorities and bureaucracy from corruption, unless the vast majority of individuals working in those institutions live by the principles of fairness and transparency, and so can weed out the bad apples?
I think we are still scratching our heads over how and why the West managed to free itself from feudal systems with mythic-membership tribes, serfdom, and warlordism.
Not to pick on Islam in particular, but if the culture (reinforced by all the authorities, religious and political) has people mumbling “if God is willing” every 5 minutes, it isn’t really much of an injunction to people to make something of their lives, nor does it encourage a self-critical mindset, a culture of critique, and open discourse.
The cultural mindset rather veers to other views, like how perhaps the fact that the West has a higher standard of living, must be evidence of its corruption, and an insult to God, and it was the West which plotted to undermine the Golden Age.
The problem is that there are certain ingredients needed in individuals, culture, and systems, to move a people from pre-modern to modern. But if we really knew what those were, perhaps we’d be having more luck than simply demanding this or that regime install ballot boxes.
“while it is true that a correlation can be made between energy consumption per capita and quality of life, there must be something else at work that prevents the oil-rich countries Nigeria, Indonesia, Iran, Iraq, and the others from enjoying that high quality of life.”
Yea, they don’t get to consume the energy they produce.
The legal and political systems are part of the infrastructure of a country.
The physical infrastructure (roads, phones, water…) are also part of the infrastructure of a country.
Without infrastructure the country cannot develop. Without infrastructure the country is stuck without any hope of building growth. Any wealth that does accrue leaches out to more fertile fields.
Energy is not needed for the social infrastructure.
But without energy the physical infrastructure cannot be created or maintained.
And both forms of infrastructure are required.
Mike Jonas hit the nail on the head.
The U.S. has by a wide margin the most oil wells drilled of any nation. And it has the most dry holes ever drilled. Now it has the most fracked wells drilled. It is the freedom of risk taking that underlies this set of observations rather than some special endowment of resources. Poor countries with large potential for energy resources or central government control of production and development tend to have adverse or inconsistent climates for risk taking and development. Energy development is a long term effort wherever it is conducted and this works against unstable nations lacking long term stability. If the U.S. were as dependent on a state run energy monopoly or a sanctioned foreign company as effective monopoly, there would be no such thing as fracking today and no shale oil plays. U.S oil company majors totally missed the boat on this energy tech play and had to buy into this trend before being left behind and out of favor by investors. Oil rich poor nations have to export oil to plug the holes on financial resources and use oil to buy political power or pay for weapons to maintain power.
Little Norway have become dirty rich on oil resources … Standard of living? Not better then Sweden, but in most cases far more expensive … (rent, food, energy, transportations …)
Nigeria, is this the African country that has been exploited by a US oil company, which Bill Gates (III) have been invested in (at the same time he and his wife have been engaged in charity work in Africa …)
Instead of looking at the Energy vs GDP effect as doubling the amount of energy consumption; one should look at it in terms of reducing the cost of energy in poor countries as well as doubling accessability (social and physical) and the utility of energy to improve lives.
In the full socio-economic cycle, the cost/accessability/utility factor doesn’t even have to halve to produce a doubling in GDP because the increasing use of cheap energy lets people be more productive and therefore more able to pay for energy to further improve their prosperity.
While it is certain that making energy more expensive reduces the quality of life, simply making energy cheaper or more abundant doesn’t automatically improve quality of life. Accessability and utility factors are fundamental to quality of life.
“Economic systems in the oil exporting countries range from absolute monarchies to dictators to elected representative.” Those are political systems. Economic systems would be market, mixed, or command economies, with a host of variations within the “mixed” category.
Some nations have more resources than others, but, as noted, the poorly endowed Japan is proof that culture can overcome almost all obstacles. Access to cheap energy is certainly desirous for the creation of wealth, but it won’t move a man off the couch nor will it ensure the most important prerequisite to economic growth: liberty.
richardscourtney on August 23, 2013 at 3:50 am
“Each country is a major oil producer and exporter, but with Indonesia and UK experiencing decreased exports recently. ”
This is false. Both countries have peaked production and now import oil http://en.wikipedia.org/wiki/List_of_countries_by_oil_imports
“Local tyrants will always prevail where they are not constrained,”
How does one constrain tyrants? Civil war? Syria, Egypt?
SasjaL:
I severely lack time so will be abrupt from necessity and not rudeness.
I am answering your request for clarification in your post at August 23, 2013 at 4:54 am
http://wattsupwiththat.com/2013/08/23/access-to-energy-not-the-entire-story/#comment-1398044
I answer,
The Rule Of Law is essential for any society (or nation) to function.
But, of course, corruption is a destruction of the Rule Of Law especially when it is corruption of the legal system and/or of those who apply or enforce it.
Richard
richardscourtney on August 23, 2013 at 5:09 am
Thanks, my example applies to my country – Sweden …
Good point about how much drilling the US has compared to other countries, Resourceguy. Legally, you can pinpoint the reason for that on the unique Property Rights regime that the US has, which exists almost nowhere else in the world. Few people realize how important this has been with respect to developing the vast and varied infrastructure. (an aside: Canada and the other English speaking countries are better than the rest of the world, but still don’t allow anywhere near as much freedom and room for private initiative as the US allows)
This is the incredible, world-shattering yet incredibly simple principle: The US allows private ownership of minerals. If you buy or inherit a piece of land, and the mineral rights are still intact (meaning they haven’t been stripped out and sold to a third party by some previous owner, which private owners are allowed to do) then you OWN all of the minerals in, under, and that run through your land. All the way down, thousands and thousands of feet. (there is a practical limit, but not a legal limit) That means private owners are *all* incentived to realize the value of their holdings, and that means that they will *invite* exploration and work themselves to try and figure out the best way to maximize production – all without needing any government planning at all. Of course, over the last century we now acknowledge that government has a function in monitoring and regulating such activity, in order to make sure that safety and health standards are upheld, and that no single operator infringes on the rights of his neighbors, but outside of that, government does not play any role in planning, exploring, or producing.
In every other country in the world, even where private property ownership is allowed, landowners only own the *surface* of the land, not the minerals beneath it, which are held by the central governing authority. For example, in Canada, which does allow private mineral ownership, that ownership only comes about when the private party has either purchased or leased those rights from the Crown. (as they say) In other words, no private mineral ownership without the specific approval of the central government at some point, and that is still considered a very *Liberal* system compared to the rest of the world.
The US is truly and completely unique with respect to the way our legal system deals with mineral rights. Our system allows private parties, providing only that they abide by safety and health regulations, and other such regulations such as spacing requirements that enhance total production for all, to act in any way they believe will maximize their production. This is why the Eagle Ford Shale development could come out of nowhere and get to where it is producing 1,000,000 barrels of oil per day before anyone on the Federal level even knew there was anything going on out there. This is why North Dakota exploded, this is why Ohio is about to explode with drilling and production, which will have a huge impact on restoring the county and state budgets in that quasi-depressed, post-industrial region.
This may seem counterintuitive, and every member at every level of every government in the world today, even the liberal ones, absolutely hate this statement with a passion – but the the LESS government involvement you have, the MORE energy production that nation will enjoy.
The US oil industry is the living, breathing, producing proof of that statement.
btw, the standard isn’t TOTAL production, it is about MAXIMIZING production from what you have. Saudi was blessed with incredible geology – without their government policies, they could have easily been producing double what they have been for the last 30 years. (Remember, OPEC was all about LIMITING production, not maximizing it) Iraq could be producing 5 times what it is – so could Iran. Mexico has the resources to produce 10 times what it has been producing, as does Venezuela. In every case, it is their own governments that destroy their producing potential.
“Mexico has the resources to produce 10 times what it has been producing”
Hard to see how since Cantarell, their biggest deposit, is in terminal decline, producing less than 400,000b/day from the 2.3mb/day at its peak. http://static.seekingalpha.com/uploads/2009/8/23/saupload_reuters_cantarell_through_june_20093.jpg
Mexico’s over all production is down: http://www.indexmundi.com/energy.aspx?country=mx&product=oil&graph=production
They rely on oil revenue to keep their country functioning. Thus there is the incentive to produce as much as possible, not as little as possible.
Economic historians, like Douglas North and J.R.T. Hughes, have pointed to property rights and the rule of law. It is not that these have to be perfect, ours in the US certainly are not, but you can go to a county courthouse and find who has title to a piece of property and the legal rules are enforced predictably. Without that, people end up holding, and hiding, wealth in rather unproductive ways.
A related question to my previous post, with respect to how detrimental governments usually are with respect to any given nations producing capability is the oft-noted observation that vast mineral wealth has more often turned out to be a great curse for the local population than it has turned out to be a blessing. Vast mineral wealth, controlled by a central government, removes any need or interest that government has in developing any other employment centers or income streams. Why bother, once they’ve got the money they need to run things? In fact, from that point on, any competing industry or source of employment becomes a competitor for political power, and thus is actively sabotaged and driven out. It is far too easy for a government with a good income to keep everyone on subsidies and dependent – you both achieve control, and have a wonderful tool to suppress dissent by withholding benefits. This is generally how the 3rd world operates.
And this would happen even if governments were generally benevolent, but in the real world, what we see time and again is that a small but very motivated faction captures the apparatus of the central government; and once that is achieved they gain sole control of the nation’s mineral wealth, which enables them to both enrich themselves and to permanently cement their hold on power. This has happened in Mexico with the PRI and the PEMEX unions (Mexico finally has a President trying to break that stranglehold), this has happened in the Gulf States, it’s happened with the Generals in Nigeria, it happened with Qaddafi, it happened with Saddam – over and over and over, this is the story of the 3rd world, and is the reason mineral wealth so often results in an advanced level of political oppression and societal decay.
A real world example of the problems this brings about can be seen in what many think is a successful country today, Saudi Arabia. In fact only about 10% if the population works seriously to provide the national income, and about 90% of the population survives off government subsidies in some way or other. Ever wonder why so many people there have so much free time and cause so much trouble? This is what the Royal Family there lives in fear of, and their fear of their personal situation has led to so much of the turmoil we deal with today. But they can’t abide the thought of Giving Up Control. No government ever really can, so the trick is to keep it out of their hands in the first place.
The issue is far more complex than I can fully explain in a post but the basics are the constitution and the bill of rights. Few people understand these documents today as they were understood for the first 150 years of our country.
The constitution is a list of the powers the people gave to the government and the government is given no powers beyond what is listed and the government is not allowed to add powers (except by the amendment process). In other words no living constitution allowed. The bill of rights is was not needed and was not a part of the constitutional approval process. The bill of rights came into being because the states when approving the constitution feared the government would soon forget this and start making powers beyond what the constitution allowed. The 9th and 10th amendment are the two most important amendments because they are the lock and key to the constitution. They say the government can’t create new powers for it’s self and the government only has the powers listed in the constitution. All other amendments are reminders to the government of the line they must not step over in personal freedoms.
The progressive movement disliked these restrictions because they are a socialist/communist form of government and found a way to obtain more power with the passage of the 17th amendment which resulted in the reduction of states rights (that was not the reason they gave) and the passage of the 16th amendment which allowed the creation of the IRS and the progressive tax structure. The 16th amendment was by far the most destructive to the country because it permitted the tax rate to be as high as 90% and to be applied unequally. The saying “money is power” is very true because with money the government is able to bribe people to look the other way when they step over the line the constitution draws. There are many examples but is staying with the thread, take the EPA. The EPA would never be permitted to exist under the constitution but because they have money like super fund clean up money they are able to go far beyond what the constitution allows.
The economy will only grow with a free people which explains how the United States was able to go from a small country to a power house by World War I. After 1913, we have been living on past glory but we have had a few leaders that did recall the rule of the constitution.
Pulling it all together, energy is important and the United States is blessed with it but having the free market to take advantage of it without government interference is what will make a country great and uplift the people.
Coal, Hydro and Nuclear energy/electricity generation.
[1 large coal-fired power plant provides the energy equivalent to 2 million people doing manual labor – this is WHAT made modern society – without it, we would still be 1 billion people working in the fields with a hoe – without it, there would be no oil, gasoline or vehicles or farm equipment or clean water or functioning health-care].
Democratic government (or at least turnover of leadership as in China).
Free enterprise economic system.
Balanced public sector budgets.
Public sector no more than 40% of GDP (even in a free enterprise economic system, there is still taxes and services like highways and water paid for through government – but taxation needs to be below 40% of GDP).
Law and order; protected real property rights; protected intellectual/invention property rights.
Well-functioning banking system with appropriate regulations to keep it stable and trustworthy.
Monetary system that maintains low inflation.
Education and job training system.
Women’s rights, birth control and washing machines (see Gapminder).
Green Party/environmentalists with less than 5% of the vote – no political power.
No climate change policies and no climate scientists with political power.
I’m told that the constitution of the USSR was even better than the US constitution. Unfortunately the USSR government ignored it. It’s not the written laws that counts , it’s the strength of character of those in the government and the public that matters most. It’s the laws in our hearts that matters
The Rule of Law, Free Market and the right to own Private Property. Affordable energy will follow.
Let freedom ring.
“They rely on oil revenue to keep their country functioning. Thus there is the incentive to produce as much as possible, not as little as possible.”
That’s the theory that has led to so much tragic mismanagement around the world. It sounds good, but it’s wrong. (not faulting you; many, if not most, people believe this)
Mexico relies on oil revenue to keep their country functioning – BUT oil production has been collapsing over the last 10 years, because Mexico has stripped out almost all of the money needed for new exploration and instead used it for everyday government spending! And PEMEX doesn’t mind, because PEMEX doesn’t have any incentive to grow, no one in it makes any profit from that. PEMEX’ only incentive is to make sure that no competitors ever enter Mexican territory, because it might demonstrate how BAD a job they are doing, and lead to a loss of power. And now Mexico is in a real bind – their government revenues are collapsing due to the loss of oil income, and yet in order to create more wealth, and more production, they have to TAKE money away from social programs and the military in order to spend it. And they are having a devil of a time convincing anyone of the need for that, because PEMEX has been a source of incredible corruption for 50 years and counting.
And that’s far from the worst problem with PEMEX.
Let me put it simply – PEMEX is much better off if Mexico only produces 2.5 million BOPD, and they control ALL of it. than if Mexico produces 10 million BOPD but PEMEX only controls a fraction of that. 2.5 is about what they are producing; if Mexico had US style laws and competition, many geologists believe they could hit 10 million in 10 years easily. You see, the Eagle Ford geology which is exploding in Texas runs on into northern Mexico – and yet Mexico has no plans to even explore that, much less develop any of that. Why? Pemex isn’t interested, because they have no expertise in that kind of operation and they would have to bring in outsiders, and that would threaten their control. So they’re going to make sure it doesn’t happen there. (and don’t even get me started on the offshore plays they’re ignoring, which are bigger than Canterell)
Mexico has a President who is valiantly trying to break the stranglehold PEMEX has over that country’s economy, but it remains to be seen whether he can actually succeed or not. Until he r someone like him does succeed, Mexico is going to remain a tragic land of vast, untapped, wealth and vast suffering.
I remember an article I was a long time ago where it was pointed out that countries that are dependent upon the export of natural resources tend to have lower standards of living. Being rich in natural resources doesn’t equate to the creation of robust economies. Outliers like the Gulf States I think are more do to their relatively small populations.
From the article:
“It may be that energy per capita in the US is distributed according to a bell curve, with a few percent of the population consuming vast amounts of energy in their mansions, jet airplanes, and fast motorcars.”
Speculation like this is driven by envy. I am middle class and I do not envy what the rich have nor do I despise the poor because I have been there. What I dislike is class baiting. A fine article, well thought out, but failed at the end due to envy.
Life, Liberty and the Pursuit of Happiness (the pursuit of property). How far countries could go by reading those words of wisdom, considering why the men who wrote them thought that these are the foundation of a just and moral society and then applying those ideas to their own situation.
And if they want a to understand why those are the important ideas, one explains the moral foundation of Capitalism better than Ayn Rand.
@JRwakefield
You need only look at the map of offshore oil fields in the Gulf on the U.S. territorial side vs. Mexico to know there is more involved here than Cantarell. In fact, it is the silo dependence on Cantarell production that reinforces the need for a new policy path with new investment and more players. Then look onshore at the map of Eagle Ford shale on the Mexican side of the border where new tech expertise will be needed.
“And now Mexico is in a real bind – their government revenues are collapsing due to the loss of oil income, and yet in order to create more wealth, and more production, they have to TAKE money away from social programs and the military in order to spend it.”
Such is the nature of the Monetary Trap. Like the Energy Trap, the Monetary Trap is when governments no longer have the funds because of interest payments on debt, and loss of revenue from resources.
Mexico is there, but the US has yet to hit that wall. The bigger they are the harder they fall.
Roger highlights “fundamental issues are . . .economic system, a fair justice system, and the political or governing system” and “corruption is a destruction of the Rule Of Law”.
Vishal Mangalwadi further explores these issues, showing how the Biblical command “Do not steal” is in turn the foundational to trust and in turn to the Rule of Law, economics and justice. See The Book that Made Your World. ISBN 978-1595555458
Resourceguy, how much is there, and what will the flow rate be? Shale deposits are low flow rates, wont compensate for the declines elsewhere.
@jrwakefield
That’s hard to say. It’s like looking at a night time satellite photo of North Korea compared to South Korea and asking what the change in economic output is going to be from a major policy shift in the north.
Resourceguy, Eagle Ford is a minor play:
http://en.wikipedia.org/wiki/Eagle_Ford_Formation
6.3bb in Mexico side is puny, especially since the flow rate is very small, in the US 52,000b/day. Such is the nature of shale deposits.
@jrwakefield
Your comment about low flow rates for shale deposits suggests you have not adjusted your thinking to the multimodal distribution of oil play types. The oil shale plays are drilling-intensive investment models with lower cost per well onshore than offshore complexes and with good productivity curves for cost reduction and yield enhancement over time. The off shore model favored by oil majors up until recently is hugely expensive projects with much longer construction and pay back periods. Both models are valid in their own way.
The value of Willis’ post is not that he was advocating the increased use of energy (he was) but that he was attacking the “straw man” that there’s not enough energy to do it.
Education, you have missed that pivotal point. Both literacy and education index are low in most countries on your list, Canada and the UK undoubtedly comes out on top.
Russia is an enigma though. Energy consumption per capita is high (about the same as in Germany), education is excellent, still, GDP per capita is half of that in countries in the same league. In this case only deficiencies in the political system, poor quality of the ruling elite and subservience of the general populace may explain the lag.
Nigeria, Indonesia, Algeria, Libya, Iran, Iraq, Venezuela and Mexico all have, or until recently had, corrupt governments where a large percentage of revenues from oil go into the Swiss, or any of the other off-shore, bank accounts of the rulers and/or government officials. Until that problem is corrected, nothing can be done to better the general populations of those countries.
If I understand your points correctly, they are:
1) Energy access doesn’t correlate directly to GDP
2) Not having intrinsic oil resources doesn’t mean your nation is doomed to be poor
3) Having intrinsic oil resources doesn’t mean your nation is able to achieve Spain/Italy GDP level
1) is obviously nonsensical. There is this issue called time. If some nation discovers huge oil resources last year but is desperately poor then, they’re not going to have a higher GDP. Higher GDP via energy access requires the building of infrastructure like electricity transmission systems, electricity generation systems, roads, bridges, etc. Need I point out that all of this requires years if not decades of investment?
2) is equally picayune. Yes, Japan doesn’t have intrinsic energy resources – but Willis never said this was necessary. Japan has achieved the ability to access a large amount of energy via other economic means – principally leveraging its labor then successfully transitioning to a higher technology/value add economy. This isn’t necessarily achievable by any other nation to the same degree, but equally it is achievable via other means.
The last area covered by 3) is equally picayune. Yes, not all oil exporters are Spain/Italy. Nigeria was/is a very backward nation with poor literacy rates and low infrastructure investment; the relatively recent oil discovery has changed this but progress doesn’t happen overnight – and absolutely the levels of corruption are a factor. So are the levels of tribal warfare. Libya – was one of the best off North African nations, at least until it was ‘liberated’. Its upward trajectory has now been put off for the foreseeable future.
All in all – a poor rebuttal. A more effective rebuttal would have shown that energy access is simply not feasible, but this is in fact untrue. If a nation as fractious and corrupt as India and Pakistan can achieve a national electricity grid, there is no reason why any other nation cannot achieve the same. Yes, the grid there isn’t great, but is a tremendous amount better than what you see in true 3rd world nations.
It is obviously true that energy is necessary but not sufficient for economic development.
It is also true that all energy is not created equal. Coal is useful for large scale electricity and steel. The first requires much additional infrastructure. The latter can be imported rather than made, and does not limit economic development in a broad sense. Liquid transportation fuels (petroleum) are absolutely necessary energy. They enable local electricity gensets without large scale infrastructure. They enable productive agriculture, forestry, and mining. They enable transportation of people and goods, without which no scaled manufacture can develop.
Now look at future oil production critically, and in detail region by region, without committing errors such as Maugeri did (applying Canterell type decline curves to tight oil like Bakken, which is orders of magnitude worse) and you can only see major problems ahead. Cheap energy hopes for development are not in the cards. 2012 IMF working papers project $200/bbl oil and emerging absolute scarcity by 2020, which other IMF papers point out will cause grave disruptions globally.
Roger,
You nailed this one. I would add “culture” as an issue as well for those countries in question, but it’s too catch-all and not specific. The rule of law, individual rights, property rights, a robust and reasonably fair legal system, etc., are all more specific factors. Economic rights is another catch-all phrase that also comes to mind.
JR Wakefield—-Indonesia imports oil but exports vast quantities of LNG. Half the electricity in Japan comes from Indonesian LNG.
The oil production has not “peaked” it has declined. They offer a Production Sharing split of 85% government 15% company. If they ever go to a reasonable rate, foreign investment and technology will produce a lot more oil.
There is more to the oil business than just spouting Hubbert’s discredited curve.
Resourceguy, that may be, but 53k is awfully small. I understand that the Bakken is making improvements in output, but it too is still small in output. It just means, as long as oil stays high, the deposit will be flowing for decades, albeit at low rates.
The problem the Western World faces isnt just the lack of revenue from oil, but the continued increasing interest payments on the debt squeezing out everything else.
“There is more to the oil business than just spouting Hubbert’s discredited curve.”
Maybe in your mind, but Hubbert’s curve is a physical fact, seen in every field that has peaked.
Some other requirements:
1) Access to trade. Land-locked countries and interiors of large countries without good river systems (middle of Russia for example) are cut off from trade which is a huge economic stimulus. Coal is useless unless you can ship it. Afganistan is land-locked and mountainous, which makes each little area isolated.
2) Ability to get clear title to land. Many countries have most of the land owned by the government or a small elite. In Greece (and probably many old countries) it is almost impossible to figure out the title to land because of lost records, unclear boundaries, and conflicting claims. If you don’t know for sure your title to land is secure, it is risky to build anything.
3) An affinity for hands-on work. If all the educated people don’t want to get their hands dirty and only want to work in government or as professionals, (eg., Nigeria) then building up industry, agriculture, and mining won’t happen.
But to defend Willis: preventing power plants from being built will for sure stop progress. Industry and small business can’t get started without electricity. In some oil rich countries, the oil is sold for cash more than being used to develop the infrastructure of the country.
“Until that problem is corrected, nothing can be done to better the general populations of those countries.”
The big question is now does that problem get corrected? Civil war?
Roger E. Sowell, this was a good essay. Many things are necessary but not sufficient for the development of material wealth.
Kurt Granat: Economic historians, like Douglas North and J.R.T. Hughes, have pointed to property rights and the rule of law.
In the previous thread, several people commented on the necessity to protect the installations. Whether large or small, with or without a complex grid, no matter what the actual cost, if the people and their government can not protect the electricity generating installations, there will be no increase in material wealth. To select one criminally run country, Haiti, I doubt that it matters that much what is built — the thieves will extort more than the market can bear or steal the resources outright. In the US, by contrast, the federal government first subsidized and then protected the transcontinental railroad, the Panama Canal, the TVA and the extension of the grid to rural areas (REA) — as well as protecting property rights (with the occasional “taking”.)
Isn’t higher energy consumption per capita correlated with rather than a cause of higher quality of life? You may equally say that eating a McDonald’s is correlated with nations with a higher standard of living so everyone should eat McDonald’s. (please don;t do this though!).
As nations get wealthier they do tend to desire those things that consume more energy, whether it’s air conditioning or gas guzzling cars.
Isn’t higher energy consumption per capita correlated with rather than a cause of higher quality of life? You may equally say that eating a McDonald’s is correlated with nations with a higher standard of living so everyone should eat McDonald’s. (please don;t do this though!).
As nations get wealthier they do tend to desire those things that consume more energy, whether it’s air conditioning or gas guzzling cars.
The US and Canada are the unique countries in the world. They have prosperity chiefly from the fact that they were started explicitly with the pretense of being free and democratic with constitutions guaranteeing certain rights to ordinary people.
It is much more difficult to impose that on older well established countries that have had generations of dictators who rule by force and oppression.
That will never change, and if anything, socialist tendencies of Western Countries, continuously adding laws restricting freedom, will only erode what freedom we have.
Economic turmoil often means the general public will vote for even more socialism, making matters even worse, like we have seen many times in the past in many countries.
“Mexico has the resources to produce 10 times what it has been producing”
“Hard to see how since Cantarell, their biggest deposit, is in terminal decline, producing less than 400,000b/day from the 2.3mb/day at its peak. http://static.seekingalpha.com/uploads/2009/8/23/saupload_reuters_cantarell_through_june_20093.jpg
Mexico’s over all production is down: http://www.indexmundi.com/energy.aspx?country=mx&product=oil&graph=production
They rely on oil revenue to keep their country functioning. Thus there is the incentive to produce as much as possible, not as little as possible.”
REALLY?
The President of Mexico “sees” it as he is proposing sweeping reforms to increase production by allowing foreign firms back into the country even modifying the Constitution. Mexico is the perfect example of what happens when a corrupt government system controls anything including energy. The same problem exists in Venezuela where all the experienced oil engineers have let the country and started looking for and producing heavy oil elsewhere. The decline is due to the political system, not the lack of potential resources.
I worked with PEMEX many years ago, even then the workers were competent and willing to do things correctly if supervised properly. The management was corrupt, made poor decisions, and lied about the schedules for completion of a major project. Even years ago, the honest employees we worked with told us that little progress was made discovering new sources of oil since they nationalized the oil industry. The poor people of Mexico are burdened by a system that deprives them of economic growth and good paying jobs although they have rich national resources.
Here is the latest news report:
“Mexico’s President Enrique Pena Nieto proposed sweeping reforms of the country’s oil sector Monday that would allow foreign energy firms back into the industry 75 years after being thrown out.
Pena Nieto proposed a constitutional reform that would allow state oil monopoly Pemex to partner with private energy companies in oil and gas exploration and production.
The joint deals aim at tapping foreign oil company capital and technology to revive oil and gas production, which has sagged under Pemex in recent years.
But the giant Pemex — Petroleos Mexicanos, which has dominated the industry since the 1938 nationalization — would maintain the state’s ownership of all hydrocarbon resources.
And Pemex itself, a key source of government revenues and a crucial driver of the economy, would remain in state hands.
The reform would modify Article 27 of Mexico’s constitution to allow private companies to form joint ventures with Pemex in energy exploration and
Article source: http://nz.sports.yahoo.com/news/mexico-proposes-private-partnerships-pemex-174303922.html
Nothing to do with this article, but I don’t know how else to draw attention to this “problem”.
When I open the Wattsupwiththat page, it opens then the screen goes blank. Usually when I re click it opens and stays open.
It could be my machine (iMac & Safari) but it doesn’t happen on any other site.
I thought it best to speak up in case some one is trying to bugger up the Wattsup…;. works
@ john Naylor – lately I have been getting lots of reports of trouble on Macintoshes, especially in the UK, and unfortunately since I don’t own one, I can’t see what is going on. I suspect the issue has to to with Safari, which may be out of date, or there may be other things out of date.
WUWT works just fine for most people, but a few like yourself report problems like this. Look within your machine for things that need to be updated rather than blame the site. You could also use a different browser as Safari has all sorts of incompatibility issues, especially if it is an older version. Thanks – Anthony
@jrwakefield
And that is another example of why the US energy/mineral model succeeds over the long and short term where others fail. Even if the US government went bankrupt, people with oil on their land still have an incentive to drill it for profit. Private energy companies will still have an incentive to sign contracts with private individuals. The production still flows. Make energy production a function of a government ministry and they’ll soon prove that excuses are easier to pump and sell than oil.
wws has touched on most of what I would say about “the curse of resources.” The curse strikes countries where there’s either no clear conception of property ownership, or tribal conceptions of property ownership (both land and mineral) such as are prevalent throughout most of the world, or the idea that the state owns mineral resources. The latter includes parts of Europe that inherited the Roman concept of land ownership, in which all the land belongs to Rome and citizens are just sort of leasing it.
In some of these places a country never really formed as a coherent entity until a resource-find concentrated enough power and money to form a functional state, with an organized government and military, with the most powerful warlord or tribal leader crowning himself king or becoming president-for-life. In countries that were already modern and stable, the result is usually a state-run oil or energy monopoly, inevitably a bureaucracy with little incentive to innovate or maximize production.
Why do some countries prosper and others do not? This question was posed 2 centuries ago by Adam Smith. One of the most comprehensive and persuasive answers, IMO, is provided by Ralph L. Bayrer in his recent, extensively cited book: “Free People, Free Markets: Their Evolutionary Origins”. I commend it to all who are seriously interested in the underlying issues this thread only begins to touch upon.
That was why I liked the idea presented in Mosher’s link. If you can distribute the energy production and use down to the individual level then you stand a chance of bypassing the corruption and other problems listed above. Protecting it is another matter.
So what is required to protect your stuff? Regrettably it still comes down to force of arms in most of the world. A working justice and political system won’t help much if it can’t be enforced at the individual level. Everyone just runs around stealing from others instead of making their own.
‘2012 IMF working papers project $200/bbl oil and emerging absolute scarcity by 2020, which other IMF papers point out will cause grave disruptions globally.’
Sounds like another type of forecasting I’ve read about lately…
@John naylor @Anthony Watts:
I have no trouble with WUWT using Safari on my Mac — but I’m running a completely-up-to-date system. I suggest that Anthony is likely correct that you should check for issues locally first.
That said, I must take minor exception with Anthony’s observation about Safari and incompatibility issues. Safari has been (and remains) closer to full W3C standards compliance than any of the other major browsers. Most (but certainly not all) Safari “incompatibilities” are more along the lines of “behaves as required by the standard, rather than in the common-but-incorrect way seen in certain other browsers.” Some of the other WebKit-based browsers sometimes run a bit ahead of Safari in terms of standards compliance, but that’s only because they release new versions more frequently.
REPLY: I was referring to older versions, note he said he was running an iMac, which is ancient by today’s standards and that era of Safari is as well – Anthony
@jrwakefield and others
Remember that Hubbert’s curve was based on databases of onshore fields using vertical drilling and production data. That is to say vertical drill holes and related probabilities of discovery and production from migrated oil in oil basins. Long after Hubbert’s modeling effort we invented horizontal drilling of the source beds for migrated oil and gas and fracking for shale source beds. While some significant innovation was allowed for in Hubbert’s model and the related databases it was not radical like the dimensional shift from vertical drilling of hidden pockets to horizontal drilling of source layers over vast areas of the basins. I would say we have the grounds for saying model failure at this point but further drilling tech and related cost reductions will be needed to prove it for the underinformed (and the laggard oil majors that missed it).
Anthony, thank you for posting my little article.
All, I appreciate the comments. I am unable to respond more fully until this evening, Pacific Daylight time. Clients await, with all that that implies. Best regards, Roger.
I’m not sure it’s a valid assumption that oil availability equals energy availability.
The ability to “keep the fruits of your labors” is an impediment to progress worldwide.
Years ago we were living and traveling in Mexico and got to know many of the local people. Without fail they told the same story. Why did they not work harder and save up some money? Because if they did the rich man on the hill would pay the police to come and take it from them.
Closer to home we see the same thing. Why not work overtime? Because it all goes to taxes. Is there really any difference between the two situations?
“Long after Hubbert’s modeling effort we invented horizontal drilling of the source beds for migrated oil and gas and fracking for shale source beds.”
That has allowed us to get more of the oil in place, leaving less behind. That skews the Hubbert curve, but the basic principle is still there. Flow rate increases, peaks, then drops. There is no technology that can prevent that.
“Closer to home we see the same thing. Why not work overtime? Because it all goes to taxes. Is there really any difference between the two situations?”
At the peak of my working career my total tax load was 63.5%. I retired soon as I figured that out, now they get less than 20%. Atlas Shrugged (read the book).
George Turner says:
August 23, 2013 at 7:44 am
The production still flows. Make energy production a function of a government ministry and they’ll soon prove that excuses are easier to pump and sell than oil.
===========
so true. private industry is all about shipping the product, regardless of excuses. government is all about having a ready excuse why it did not ship. the secret to success in government lies in how fast you can get rid of the “hot potato” (work) and pass it to someone else. so long as you aren’t holding the potato when the music stops your job is safe.
jrwakefield says:
August 23, 2013 at 9:03 am
That has allowed us to get more of the oil in place, leaving less behind. That skews the Hubbert curve, but the basic principle is still there. Flow rate increases, peaks, then drops. There is no technology that can prevent that.
==============
assuming that natural gas resources decrease with depth, as one might expect if they were the fossilized remains of dead animals. however, if they are the result of the reduction of water and fossilized CO2 in the presence of iron, then the resource is likely much larger than believed. the methane deposits on the ocean floor suggest natural gas production by the earth is both ongoing and quite large. what get trapped in rocks may only be a small fraction.
It may be that energy per capita in the US is distributed according to a bell curve, with a few percent of the population consuming vast amounts of energy in their mansions, jet airplanes, and fast motorcars.
More likely the distribution has more to do with heating/cooling degree days and population density within a given wealth band then on some sort of great social disparity.
I.E.
If I look at the daily highs and lows for Bombay India and assume that a human being can adapt to a temperature centered on 80F and can withstand temperatures within +- 15F without aid of energy sources then the amount of energy a citizen in Bombay where average daily low and high varies seasonally between 65F and 95F is totally different then the amount of energy a person living in Wyoming where the average daily seasonal low and high varies between 15F and 80F.
A simple cinder-block structure with a tin roof is going to be inadequate to protect a human being from the elements in much of North America(Southern California being a possible exception) absent a large energy consumption. It’s more then adequate in Bombay, India.
@jrwakefield
You go tell the billionaire oilman Harold Hamm he’s wasting his time.
“however, if they are the result of the reduction of water and fossilized CO2 in the presence of iron, then the resource is likely much larger than believed.”
Abiotic oil formation has been well debunked. Every oil field can be shown to be of a biological source. For example, the Bakken deposit is a source rock. That means the organic source for the oil formed in that formation. Oil and gas shale show that it must be biological, because they are so tight the rock has to be fractured to get it out. Hence the oil and gas cannot have migrated from below.
“You go tell the billionaire oilman Harold Hamm he’s wasting his time.”
No idea what you are referring to. Of course oil and gas deposits will be exploited until they become uneconomic. Some gas shale deposits are not economical at today’s price, but they keep pumping it.
“. the methane deposits on the ocean floor suggest natural gas production by the earth is both ongoing and quite large.”
Methane on the sea floor is from decaying organic matter.
From the article:
“A fair justice system ensures that those with a legal grievance will be heard, and treated fairly….”
Well, duh. Bit of tautology, much? The being-treated-fairly is how we know it’s a fair system, yes?
All it takes to have a decent government is to have it staffed & run entirely by decent people.
Otoh, decent people are going to behave decently even in the absence of any formal “government”.
And there is no system, no mechanism that can force bad people to behave decently. There is no code — computer or legal — that can’t be “hacked”. The USA’s code was hacked in less than a century, and then again and more brutally half a century after that, and today sitting presidents can refer disdainfully to “that scrap of paper” when referring to the original code, which itself is only historical window-dressing now.
From richardscourtney:
“… any benefits of anything (including greater energy supply) are accrued by the powerful alone in the absence of a Rule Of Law and its enforcement.”
And in the presence of a rule of law and its (concentration of) enforcement, the powerful can buy the enforcement. They do and they have.
Decentralized enforcement (e.g., armed teachers) at least makes the enforcement mechanism harder to co-opt.
Mike Jonas says:
August 23, 2013 at 3:51 am
Mike, you are quite correct about what I said.
Roger, I’m more than aware that there are a whole host of things that need to be in play to increase the per-capita GDP. My point in my essay was all about the size of the energy aspect of the task. I’d always thought it would take five to ten times current energy consumption to lift the poor out of poverty … so I was surprised to find out that that’s not the case at all.
Finally, despite being an excellent post overall, your comparison of the GDP/capita is fatally flawed because you are using MER exchange rates rather than PPP exchanges. If you use the proper metric (available here) you’ll see that a number of the countries you listed are above, sometimes well above, the global average per capita GDP. You list eleven countries above. All of them except four (Iraq, Nigeria, Indonesia, Algeria) have a GDP above the global average … so it’s a poor example of your valid point, which is that access to cheap energy is a NECESSARY but not SUFFICIENT condition for economic prosperity.
Thanks for an interesting post,
w.
Beginning at this paragraph:
and following for a few more you make a ridiculous mistake – you are equating energy production by governments and industrialists with energy consumption at the per capita level. Clearly there is no logical way to claim that because your kings, princes and dictators create huge amounts of oil (and oil revenue) that this directly leads to energy consumption by the population for anything but air conditioning (as an earlier and wiser person has said, “The steam that blows the whistle will never turn the wheel”). In fact you have only pointed out that making affordable energy available to the population for the purpose of industrializing is a decision left undone by despotic nations and we already know that. Many of the shoeless people living in your low GDP nations have no opportunity, education, or motivation to industrialize, and grind grain in the same stone bowl their grandparents used.
Cheap power enables but does not empower the masses to acquire wealth. You need both and that is the advantage of western civilization and particularly, as Margaret Thatcher said, the English speaking world.
John West says:
August 23, 2013 at 4:15 am
And their indigenous population isn’t capable of producing the oil they DO produce. In other words, it is expatriot workers that make it happen; without those, you’d have an 11th-century country run by warlords–much like Afghanistan.
Figure out why entire dole-subsidized Arab nations (which requires $80 crude oil to maintain) would rather sit on their wallets than work and you’ll understand the recipe for eventual national disaster.
Free market capitalism, constitutionally limited republics (no more than 10% of GDP), low taxes (no income taxes, just a flat consumption tax EVERYONE pays), balanced budgets, limited: rules, regulation and mandates, equal justice, Austrian economic policies (Keynesian economics deserves to be in the trash along with CAGW), free trade, market based healthcare (socialized medicine is an awful system), strong currencies backed by gold/silver (fiat currencies don’t work), entrepreneurship, personal responsibility, maximum individual freedom, a strong work ethic, an ethical and moral people, are all the necessary building blocks required for a thriving, free, prosperous and sustainable
America used to have all those attributes until about 120 years ago, but through the slow cancer of Progressivism, the Constitution was gradually destroyed until America became just another failed Socialist state, currently on the precipice of economic and social collapse.
Rather than being that shinning city on the hill and being a sterling example of what free people and free markets can achieve, we’re a mere translucent shadow of our former self, slowly fading into the pages of history, like so many great civilizations in the past.
Socialists, dictatorships, Islamic theocracies, tyrants, warlords, anarchists, state-run crony Crapitalism in various forms and flavors now enslave their people and their resorces on the twisted road to serfdom.
Whatever man has done can be undone by men of honor, wisdom and perseverance willing to make a stand and restore and rebuild that which has been razed to the ground.
If enough people get exasperated with the failed status quo and rebuild Constitutional Republics, then the power source of the future will most likely be thorium. If the status quo continues on its present course, man’s future energy source may well be broken pieces of furniture….
And so it goes……until freedom is restored.
“””””……A fair justice system ensures that those with a legal grievance will be heard, and treated fairly according to laws that do not change on someone’s whim. Having a contract honored, or being allowed to bring a lawsuit for breach of a contract, are important issues. Having a means to collect on a judgment is also important, as it does little good to win a lawsuit, be awarded money as damages, and be unable to collect the money…….””””””
Well Roger, isn’t this an oxymoron. ? If you cannot collect on a legal award, then it is asinine to call the justice system fair.
The criminal Justice system (theoretically) is fair, in that once a miscreant is sentenced, the “justice system” promptly carries out that sentence, and punishes the criminal as prescribed by the court.
Well that of course is a joke. Lawyers plea bargain to get their client off with a wrist slap, and the parole system lets criminals out before they have served their time, often served very little of it. In my view, anyone convicted of a parole violation, should be required to serve 100% of all outstanding sentences, that they have been let out from, before they even start to serve any new sentence. Time off for good behavior should be reinstated for not good behavior.
It is claimed that studies show that the death penalty does not deter crime. Without exception, all such studies systematically exclude persons who have actually been subjected to the death sentence. The recidivism rate is actually zero.
I don’t see why the courts can’t just as easily enforce the collection of judgements against miscreants. Not that it matters, but I was once awarded a judgement against a crooked lawyer; another oxymoron. Not a chance in the world of collecting on it (so I was actually out, the amount he scammed me for. Well he also scammed an acquaintance, and she got him disbarred.
But a hearing Roger, plus 62 cents, will get you a senior coffee at MacDonalds. Fair justice system my arse !
And those laws are simply changed by a judges whim, even by such as the chief justice of the Supreme court. The President of the United States simply rewrites laws passed by the Congress, without anyone in the fair justice system even questioning it.
The Congress of the US passes into law, a multi-thousand page “affordable care” act, which not one of 535 elected members of the Congress even bothered to read before signing it into law, from which they then excluded themselves; but the President, who signed it, himself without reading it, then simply rewrites it as he stumbles along; even though no President has ever been granted a line item veto, even though many have tried to exert one. This one simply thumbs his nose at the law, the Congress, and the people, and the public information “media” never calls him on it, et alone suggest it is time for the House to impeach him for high crimes and misdemeanors.
Fair justice is a joke Roger; and you of all people should know that.
“””””……jrwakefield says:
August 23, 2013 at 10:03 am
“. the methane deposits on the ocean floor suggest natural gas production by the earth is both ongoing and quite large.”
Methane on the sea floor is from decaying organic matter…….””””””
So your point is ?????
I’ve even heard that coal under the earth is from decaying organic matter. So that would make methane on the sea floor, a renewable green energy source; wouldn’t it ?
“””””…….jrwakefield says:
August 23, 2013 at 9:58 am
“however, if they are the result of the reduction of water and fossilized CO2 in the presence of iron, then the resource is likely much larger than believed.”
Abiotic oil formation has been well debunked. Every oil field can be shown to be of a biological source. For example, the Bakken deposit is a source rock. That means the organic source for the oil formed in that formation. Oil and gas shale show that it must be biological, because they are so tight the rock has to be fractured to get it out. Hence the oil and gas cannot have migrated from below……..”””””””
So before there was ANY biological source of any kind, just where did all that carbon come from ?
Diamonds, and graphite are most certainly not biological, so purely geological processes are and were capable of processing carbon, just like any other mineral.
Petroleum, is simply a liquid rock; not a dinosaur molecule to be found anywhere in it.
Roger, good points. Despotic governments will (eventually!) disappear much as they did in Europe – the genie is out of the bottle on that one. I’m sure withholding cheap energy from their own citizens in the energy-rich nations you name is one of the controls they exercise. CAGW proponents of the ideological type that would like to withhold cheap energy from those who have it now certainly understand this mechanism.
“””””……SasjaL says:
August 23, 2013 at 4:29 am
Little Norway have become dirty rich on oil resources … Standard of living? Not better then Sweden, but in most cases far more expensive … (rent, food, energy, transportations …)……””””””
Classic case of inflation (of the currency).
Time magazine once ran an article about a study of the consumer price index going back to the year 1066 (Battle of Hastings). Using all sorts of recorded transactions, and historical accounts, the authors were able to reconstruct the CPI, and show how it varied through history.
As time proceeded, the index went up and then went down again, driven by events; this war, and that war; this catastrophe, and this discovery. The average trend of the index was zero for about 500 years, but with 10-30 year ups and downs about the mean. Then the CPI took off and climbed a slope, up to a level six timers the previous base line in about 75 years, and then it leveled off again, and remained at the new level for the next 400 years. Again it took off climbing at about the same rate as the earlier event, and it has been climbing on that slope ever since.
So What’s up with that ?
Well in 1492, Columbus discovered the New World, and the Spanish came and vandalized the new world, and ripped off the treasures of the Americas, and hauled them back to Europe to gorge themselves on.
Well there was all this new money and wealth, but the lazy bums, weren’t about to create anything of value with it, so they just partied, and the price of everything in Europe sky rocketed, to absorb all that new currency pursuing the same amount of goods and services.
Well that didn’t happen in the British Isles. While the Spanish pirates were raping the new world, the English pirates like Francis Drake, were out raiding the Spanish pirates, and seizing as much loot as they could and taking that back to England.
But instead of spreading that all around like popcorn, Queen Elizabeth I, seized it all, and tossed it in the royal coffers, so the peasants couldn’t gorge on it.
Instead, the English set about buying up the British Empire, and expanding their influence to the four corners of the globe. So England in the Elizabethan era, avoided the rampant inflation of Europe, and built the biggest thing to come along in eons, including the founding of something even better; The United States of America; which Lizzy’s followers were too dumb, to allow it to flourish, under their umbrella. Almost lost Canada the same way, until some sanity prevailed.
Well the second inflationary climb in history, began in the 1930s, when the USA went off the gold standard, and once again, the printing press, became the de facto producer of the illusion of wealth.
Well we now have Obama, and an equally profligate Congress, applying positive feedback unlimited to the inflation machine; there is no limit to how much paper they will print to buy votes to retain their worthless hides in dictatorial power over the people, who gladly will hold on to the coat of the rascal who is about to hang them.
You see you cannot force progress upon people, who simply have no concept of what you are talking about.
If you give free food to the starving masses of an over-populated destitute people, they simply will increase their numbers to absorb that largesse, and they still won’t act to alter their own traditional ways, to better themselves.
You cannot force people to be successful.
Mother nature forces success on all, by simply eating those who are unsuccessful.
Dear Roger, first sorry for my mistakes in English.
I do not agree with his críica to the work of Eschenbach, at the same time not critical few things in your post.
There are two stories in one book.
Something is a condition “sini qua non” posed by Eschenbach, another thing is to have energy and not use it in a convenient way.
Each country has its own history, and if we do not look for anything they do not understand.
In mathematics we have two expressions that show the problem, necessary and necessary and sufficient.
Eschenbach spoke of the necessary condition, and your article has taken as necessary and sufficient. There is a big difference.
Always dangerous to use words like unique … Finland’s mining royalties, such.as they are, are also paid to the land owners. The USA is not unique in this respect. This is but one example off the of my head.
To jrwakefield:
You wrote:
“…started explicitly with the pretense of being free…?”
PRETENSE? Did you really mean to use that word? Are you sure you
didn’t mean PREMISE?
There are many influences that cause people to take one road versus another. The fact that we, the generically technological advanced with a relatively high standard of living, live one type of civilization while others endure a different type of civilization is part and parcel of different belief systems.
England developing the Magna Carta was a major step out of the feudal society, followed by many improvements and losses in the march to people that are ‘free’.
One of the things we skeptics need the most is a huge contributing factor towards a country’s citizens becoming free; that is a free and active press. Honest fact digging and checking performed by reporters and journalists would stem much of the hype surrounding CAGW.
In reviewing the countries you’ve listed, there is a major difference between the those countries improving their standard of living and those who maintain high standards of living. That difference is a free press. Not just freedom of speech, but allowing citizens to seek and publish the facts they find or uncover.
Roger, this is not criticizing your article, but my two cents about contributing factors. The freedom of the press or of speech is not sustainable without the justice system and governing principles you’ve outlined.
Quoting:
“Japan has essentially no natural energy resources, but found the means to import energy as oil, coal, and liquefied natural gas, LNG, to power its industry, commerce, and residences”
Commenting:
While that is true today, there will be a change within the decade that will find Japan with a considerable energy resource base. I can’t give you any details. Trust me.
Paliamentary democracy is a much better choice for most developing countries that trying to copy the bizarre US model. In a parliamentary system the prime minister can and is often ejected from power in a non-violent manner part way through his or her term and there is a mechanism in parliament allowing ongoing political change between elections. The winner takes all “elected king” presidential system used in America is too rigid making it dificult to change leader between elections short of civil war. Which is why Egypt is in such strife at the moment. They would have been a lot better off with a powerful prime minister and not a powerful president.
“Free market capitalism, constitutionally limited republics (no more than 10% of GDP), low taxes (no income taxes, just a flat consumption tax EVERYONE pays), balanced budgets, limited: rules, regulation and mandates, equal justice, Austrian economic policies (Keynesian economics deserves to be in the trash along with CAGW), free trade, market based healthcare (socialized medicine is an awful system), strong currencies backed by gold/silver (fiat currencies don’t work), entrepreneurship, personal responsibility, maximum individual freedom, a strong work ethic, an ethical and moral people, are all the necessary building blocks required for a thriving, free, prosperous and sustainable”
I drool at your list, if only it would happen… True Utopia.
“In a parliamentary system the prime minister can and is often ejected from power in a non-violent manner part way through his or her term and there is a mechanism in parliament allowing ongoing political change between elections.”
Canada is a parliamentary system, but never has a PM been ejected part way through terms. Only in a minority government can the opposition defeat a government and force an election, and only when a monetary bill comes before the Commons.
We actually have a flaw in our system. The Provincial Liberals here in Ontario have a minority, their leader, our Premier, quit last fall. The Liberals held a convention and elected a new leader, who automatically become Premier. She was not elected by the masses. The Liberal Party decided who would run the Province.
“PRETENSE? Did you really mean to use that word? Are you sure you
didn’t mean PREMISE?”
Damn, LOL. Yeah…
“So before there was ANY biological source of any kind, just where did all that carbon come from ?
Diamonds, and graphite are most certainly not biological, so purely geological processes are and were capable of processing carbon, just like any other mineral.”
What carbon? Precambrian rocks have little free carbon, a few graphite deposits, and diamonds with a known, sort of, origin. How do those relate to methane and oil formation?
Every oil formation has trace mineral markers which can be traced back to the source rock, which in every case is a biological deposit of some kind. Read the book Oil 101. It’s explained nicely and clearly.
West HoustonGeo says…
So Japan has a way of extracting their methane clathrates?
Is it the idea of dropping balloons over them and fulfilling them with polystyrene then floating them up?
I was never sure that was cost effective as the polystyrene (or other pseudo-clathrate) is not renewable and so an extra cost. But it might be a goer.
If it’s just shake-and burn then forget it. Wasteful, dangerous and uneconomic unless we reach Mad Max oil prices.
SasjaL says:
August 23, 2013 at 4:29 am
////////////////
I have lived in both countries, and whilst not wishing to be critical of Sweden, Norway does have the better standard of living.
Since it has not squandered the money that the oil reserves have provided but has instead saved a consideably part of these revenues, It also has by far the better long term prospects. If only the UK had been so prudent.
ferdberple says:
August 23, 2013 at 8:59 am
The ability to “keep the fruits of your labors” is an impediment to progress worldwide….
>>>>>>>>>>>>>…
I think you meant “The INability…” and you are correct. The underground economy in the USSR is credited with keeping that country going. (Individuals growing food on a little patch and taking it to the city to sell for example.) We are already seeing a growing Underground Economy in the USA in response to government SNAFUs USA: $2 trillion underground economy aids recovery “The growing underground economy may be helping to prevent the real economy from sinking further, according to analysts….Estimates are that underground activity last year totaled as much as $2 trillion… That’s double the amount in 2009”
Note the tone of the following article:
Carbon is the fourth most common element in the universe. It does not require or have a biological source though biology does tend to differentiate it from natural compounds it is commonly associated with.
Anthony Watts says:
August 23, 2013 at 7:45 am
/////////////
Anthony
A couple of weeks ago, I started experiencing problems with your site. I have no problems with any other site that I visit.
I access your site by way of search engine. When I click the link for your site (in a new window – so the original returned search results are kept minimized), sometimes (in fact usually) when your home page loads, it loads partly and then immediately forwards to some advert that is inserted in your home page. As soon as that begins to happen, I close down the page, ie., before it goes to the transferred page. I then re-click on the link from the search engine to open your site in a new window and the home page loads perfectly. It has always loaded perfectly on the second attempt.
The same happens on the articles that you are running. Often when I click the link to an artilcle to open in a new window, the page starts to load properly and then transfers to some embedded ad. Again, if I close down whilst it is transferring and again click on the link to the article to open, on the second attempt it always opens properly.
It is all rather tedious. As I say, I have only experienced this problem on your site, no others, and the problem started about 2 weeks ago (and I noted that some other commentators were making comments of a problem at this time). Since it is only your site that causes this issue, I do not consider it likely that it is due to some adware/malware on my computer.
I run Windows Vista and IE 9.
@richard verney
Try clearing your cookies or using a different browser.
Dunno why some people have problems and others dont’ but generally it boils down to nuances of individual machines since the problem is scattered around and is often solvable with updates to machine and or clearing of cache etc.
This was an interesting essay but as a rebuttal, it misses the point of Mr Eschenbach’s original which is that quality of life is correlated with energy CONSUMPTION.
Mr Sowell is correct that it is entirely possible for a country to PRODUCE a great deal of potential energy while still denying the majority of its citizens the right to consume the energy that they produced. (And I agree that the political and judicial factors listed above are key to that tragedy. Distribution inequities will always be a problem in societies which do not value the rule of law.)
But that wasn’t the question posed in the original essay. Mr Eschenbach’s essay asked only how much additional energy would have to be consumed to bring the entire world to a ‘good enough’ level and is it feasible in aggregate to produce enough energy to match that consumption. Mr Eschenbach was attempting to validate the claim that ‘good enough’ would require 10 times the current consumption (and the implication that because 10x is impossible, we shouldn’t try – that we must therefore lower our standards of living).
The 10x standard was disproven. The fact that distribution inequities will still exist does not change that conclusion.
I disagree with most of the commenters praising this article.
Roger Sowell has been busy arguing against any “nuclear power” for any reason. It’s “too expensive” he says even though lawyers like him have helped create that very self-fulfilling prophecy by building roadblocks at every step of the process. Up here in NY Lawyers like him, the previous Cuomo for example, managed to kill the fully completed Shoreham nuke plant after it was completely built and ready to operate. Now they are hard at work trying to scuttle the remaining Indian Point plant.
I have him pegged as a typical anti-nuke kook and this article is merely an elaborate pre-emptive blocking action to prevent giving power to any people anywhere. Actually this is even worse than that, transparently worse because the attacks on our power here at home is dwarfed by the evil of attacking it in poor undeveloped lands. It reeks of western ivory tower elitism willing to entertain any fantasy except for empowering poor people in the 3rd world.
Requiring a bullet list of pie-in-the-sky dreams in prior to any power development is just evil. It is not our place to pick their legal, political, or any other system, nor does it have anything to do with their prosperity. In fact it is a chicken and egg argument, the opposite case being that a poor people with available energy to increase their living standards might evolve these other items later in their own way.
Color me not impressed.
jrwakefield says:
Eagle Ford is a minor play:
http://en.wikipedia.org/wiki/Eagle_Ford_Formation
the flow rate is very small, in the US 52,000b/day. Such is the nature of shale deposits.
————————————————————————————————————————————
Mr Wakefield,
Your data source is incorrect. Texas oil production is reported to the Railroad Commission, not Wikipedia.
You are off by more than a factor of 10.
No wonder your posts are so far from reality!
The current production from the fractured tight reservoirs in the USA (Bakken, Utica, Eagle Ford. Miss Lime, Wolfcamp etc)is about equal to the entire production of Kuwait.
Oil production in Texas’s Eagle Ford shale formation rose 60 percent in June from the same month the year before.
The nine fields that make up the majority of Eagle Ford yielded 617,884 barrels of crude a day, according to preliminary data released by the Texas Railroad Commission, which oversees oil and gas drilling in the state.
Doug, I see that now. http://www.rigzone.com/news/oil_gas/a/128520/Eagle_Ford_June_Oil_Output_Up_60_from_Year_Ago
Someone needs to update Wiki.
“””””””…….jrwakefield says:
August 23, 2013 at 1:54 pm
“So before there was ANY biological source of any kind, just where did all that carbon come from ?
Diamonds, and graphite are most certainly not biological, so purely geological processes are and were capable of processing carbon, just like any other mineral.”
What carbon? Precambrian rocks have little free carbon, a few graphite deposits, and diamonds with a known, sort of, origin. How do those relate to methane and oil formation?
Every oil formation has trace mineral markers which can be traced back to the source rock, which in every case is a biological deposit of some kind. Read the book Oil 101. It’s explained nicely and clearly………””””””””
So carbon, which forms more chemical compounds than any other element, is not capable of forming any such compounds without biological activity.
And I would think any rock resulting from biological sediments, would in the process of formation, be easily permeated by oil and gas produced elsewhere. And I’m not surprised that oil samples contain traces of the rock they were extracted from. I would be surprised if oil did not contain such traces.
But if as you say, it IS produced by biological activity, then of course it is a renewable source; unless biology is planning to stop any time soon.
So humans may have been using fossil fuels for 5,000 years, and nature has been making them (biologically) for 5 billion years. ?
I don’t wish to disrespect patriotic US readers who claim that they have the magic formula, but the issues are a bit more complex than some of them claim. The connection between a particular model of government and prosperity is by no means clear cut. In terms of prosperity measured by GDP per capita, according to the World Bank, eight countries have a higher GDP per capita than the US (I usually use the CIA Factbook, but it is playing up. From the last time I checked this metric, it is not substantially different there.) Several have GDP per capita more than 50% higher than the US.
These countries include several constitutional monarchies – principally in Scandinavia and Europe – a couple of Westminster parliamentary systems (Canada and Australia) and authoritarian Singapore.
Some of these countries have extensive natural resources, including energy resources, and some don’t.
What they do have in common is stable, reasonably fair and predictable governance. It is not so much the form that matters as the substance.
There are other important elements such as education levels and the framework for enterprises to prosper and grow, but individually those things do not necessarily bring the inhabitants a good lifestyle. Someone above mentioned Russia as an example of an educated population which is not seeing much flow-on from it.
Culturally, tribalism in all its forms is fatal for sustainable economic prosperity for the masses. We were all tribal once, and overcoming that is a huge barrier to people in all of the poorest countries. By tribalism I mean not only warring tribes, but the internal culture of the dominant leaders, their families and cronies monopolising all the spoils. We never quite get rid of it anywhere, but minimising it is central to economic progress.
As Willis and many others have demonstrated, the limits to global prosperity are not physical. There is plenty of food, land and energy to go round. Culture is what matters most, IMO. That is why the Chinese and Indians, who have strong mercantile roots in their cultures, have finally been able to get ahead. And it is why much of the aid that goes to places like Africa and Afghanistan is wasted, and why the Saudis would probably still be living in tents if it wasn’t for the oil.
george e. smith on August 23, 2013 at 11:21 am
Really? Currency inflation would have changed the rate, but not. Here, it has been relative stable for many years – 1 NOK : 1.12-1.17 SEK. As the Swedish currency have become stronger compared to many other strong currencies like EUR, GBP and USD, the same is valid for the Norwegian currency (during the last finance crise, both countries manage to stay out of the worst, in Sweden due to the right-wing economics, not sloppy/utopian left-wing ditto …).
Still, costs and salaries in most cases are higher in Norway, inspires Norwegian companies to outsource to Sweden (where I work – in mechanical production, we have several Norwegian costumers, not only due to low costs, but Swedish workers are known to be more productive …). Despite high freight cost, still it’s cheaper to produce here.
Sorry to say, if traditional currency inflation “rules” really worked, the USD would have been of very low value today, due to the huge amount of both electronical money and genuine bills available world wide … (Have you seen the US million dollar bills with Obama’s mug …? 😉 )
Regarding the oil, in Norway they have announced severeal times that they have reached “peak oil”, but quite soon after each time, they discovered a new rich oil field …
richard verney on August 23, 2013 at 2:01 pm
Obviously, we have not found ourselves in the same places … (Standard of living – do not compare newer parts of Oslo or other “major” city with the rest of Norway!)
If Norway had invested in proportion as much money as Sweden did into infrastructure and other useful stuff to society, they had found themselves on the same level …
If you’ve ever traveled by car in both countries, you know that it is the contrary to what you say. (Refering to road quality. Did you drive on the “right” side of the road?) It’s just one of many details, which you obviously missed …
But it isn’t all bad, because money are invested into projects, that will change most to the better.
@Paul Jonas, M. Courtney, Craig Loehle. I am Not arguing that Eschenbach is wrong in his recent post. Far from it, I state my agreement explicitly in the opening paragraph.
@Bernd Felsche, Paul Schnurr. Does it matter if energy resources doubled, or prices are halved, such that GDP increases, while the structural issues identified in this article remain in place?
Even if an energy breakthrough occurs, that dramatically increases energy resources and decreases the price, would impoverished countries enjoy the benefit of that breakthrough? Consider, just as examples, nuclear reactors that can be built and safely operated at one-tenth the cost of building one today, or the much-discussed thorium reactors, or a way to cheaply store solar energy, or a cheap but safe form of nuclear fusion, or ocean current power, or some bright inventor figures out how to deploy a power plant at the ocean floor where his heat source is a thermal vent into the Earth’s crust and his heat sink is the very cold ocean water a few hundred feet away. Would any of this make any difference in the lives of billions who now are in poverty due to the reasons put forth above?
Probably the greatest source of energy on the Earth is the continents drifting apart, if anyone ever develops a way to produce power from the several continents that are spreading apart at the mid-Atlantic ridge. The water is deep, and very cold, and the movement is very small. But, the ridge seems to extend for 9,000 or 10,000 miles. That energy source might be considered inexhaustible, even if not renewable. We hear from alarmists that energy stored is x-number of Hiroshima bombs, but I wonder how many bomb-equivalents are going untapped along the ridge.
@ Fabi at 4:53 am: absolutely correct. Bingo. Japan is a prime example that native energy resources do not matter, nor does the price of imported energy. Perhaps other examples include Switzerland, South Korea, Hong Kong, or Singapore.
For those who pointed out that I did not discuss many other important factors, I agree. This was not intended to be an exhaustive treatment of the multitude of issues that lead to poverty even in the midst of incredible energy wealth such as oil and natural gas.
@c1ue, and the three points you disparage.
First, I did address the issue of “time.” OPEC has existed for 50-plus years. It is not “time” that is the problem.
Second, I did not disagree with Eschenbach. Please go back and read what I wrote. I stated explicitly that on this point, I agree with Eschenbach. I pointed out Japan as proof positive that having domestic energy resources is not a prerequisite.
You seem to believe that this article was written as a rebuttal. It was not. It is intended to show exactly what it does show: that even if more energy is found, or cheaper energy is found, it will not likely be used by the countries with severe structural issues.
@Rud Istvan, you might be interested in my Peak Oil speech, in which your points are rebutted. Briefly, far faster than oil and gas have been consumed as a planetary resource. This has occurred in spite of OPEC controlling the price of oil to the inflation-adjusted equivalent of its 1980 price.
http://sowellslawblog.blogspot.com/2011/04/speech-on-peak-oil-and-us-energy-policy.html
@harrywr2, and the heating/cooling degree days argument. Even within the same locale, such as Southern California, there are vast differences between the energy consumption of the rich and the poor. One does not need to drive very far to see this, out here. The same is true in almost every country and city I’ve seen, for example New York City, Houston, New Orleans, Miami, Cleveland, London, Rome, Madrid, and many others.
@ mellyrn: Regarding your tautology criticism, what I wrote was “A fair justice system ensures that those with a legal grievance will be heard, and treated fairly according to laws that do not change on someone’s whim.” You have selected only a portion of the quote, in order to change the meaning. Please read the entire sentence.
@dp, where you state “you make a ridiculous mistake.” No mistake was made. My point, as I stated earlier, is that many structural issues must be overcome.
As to your point about the superiority of the English-speaking world, I wonder what the renaissance Dutch would think of that, and modern Germans, and modern Japanese? I’ve been in all three countries and did not hear much English spoken.
@ George e. smith, and the justice system. I tried to give only a few examples of a fair justice system. Going to court, having a case based on laws that don’t change arbitrarily, and being able to collect on a judgment are merely parts of a fair justice system. I could go on and on, but I will not elaborate on this point. As to your personal loss, a good attorney would advise his client about the likelihood of recovering any damages, before he goes to court. I will say, though, that the US justice system is not perfect, but it beats almost any other system from other countries. Legal scholars argue over this, so I won’t belabor the point.
@ mikerossander, this article is not a rebuttal. Please see my earlier comment on this point.
@ Blade, who is not impressed. I have stated before, and state here again, that if anyone can build a nuclear power plant that costs the same as, and is as safe as, a gas-fired combined cycle plant, then I’m for it. It is bordering on criminal behavior to allow such high-priced electricity production when there are far better alternatives. And yes, I’m all for having attorneys file lawsuits to force nuclear power plant owners to build the plants according to the existing laws. I think any rational person would also want that.
But, perhaps you find it desirable to increase everyone’s power bill because a nuclear plant sounds cool, or chic, or some other smug reason. I don’t. I want the elderly, and poor, and those just barely getting by to have the cheapest, safest, and most reliable power that our technology can provide. Nuclear power as currently built in the US just does not make the cut.
I recommend you read up on the Shoreham plant. Its emergency evacuation plan did not comply with the laws. That is why it was not allowed to start. Perhaps you would prefer that the attorneys go play golf, and the Shoreham plant be operating then develop a leak or radiation discharge, and watch the fiasco develop as millions of people try, but are unable, to evacuate?
No, thanks. I’ll take the attorneys and the lawsuits to force the owners to comply with the laws. If the construction costs go up a bit, then build it right the first time, and don’t put one next to a major multi-million population city.
@Rud Istavan, the comment above should read: Briefly, technology for finding and producing oil and gas has progressed far faster than oil and gas have been consumed as a planetary resource. This has occurred in spite of OPEC controlling the price of oil to the inflation-adjusted equivalent of its 1980 price.
SAMURAI I had to look this up:
Obama: “The Planet Will Boil Over’ If Africans Are Allowed Car”
Obama version of how the world works:
Reagans version on how the world works:
WOW. This is one of the most intelligent and interesting discussions that I have read in a long time. It makes me feel much better about the future knowing that there are so many people that can still think. Its no wonder why WUWT is number one.
“So carbon, which forms more chemical compounds than any other element, is not capable of forming any such compounds without biological activity.”
Not complex hydrocarbons. Kerogen, the precursor to oil, has chemical characteristics similar to lipids. Again, read Oil 101. Great book.
“This was not intended to be an exhaustive treatment of the multitude of issues that lead to poverty even in the midst of incredible energy wealth such as oil and natural gas.”
This may be nit picking, but “lead to poverty” is incorrect. I would say that poverty is the normal state of humans, has been since we became, well, human (when ever you want to peg that.) I would say that oil and gas has lead us out of poverty. Even poor countries are less impoverished than they were 100 years ago. Trickle down effect.
Energy generation is the most important issue.
Burning coal produces many orders of magnitude more “work” than people do. Nuclear energy produces many orders of magnitude more energy than coal.
Some day, we will find another energy source other than chemical-reaction based ones like coal/oil or a weak nuclear force based ones like fission nuclear energy or a gravity based ones like hydro.
It’s only a matter of time and a matter of when the next 20 year old genius finds the solution.
“But if as you say, it IS produced by biological activity, then of course it is a renewable source; unless biology is planning to stop any time soon.”
But the rate of formation of organisms into oil is very slow, millions of years needed. Again, in Oil 101 the author looks at oil fields and explains when they were formed, and why. Generally periods of “global warming”, when the planet naturally cycled into warmer times. That meant much more biological activity. Hence a warmer climate is a better climate for the biota! Dont tell Gore!
As for abiotic, how come there are no oil fields in Precambrian rocks? Not one oil field came from rocks older than 450myo.
Tribalism, or the more delicate Clanism accurately described by Mark S Weiner in Rule of the Clan. He is a constitutional lawyer and it is not an easy read but he makes some good points as he describes societies as different as Iceland and South Sudan as they progress from Clanism to individualism or, as he calls it from”Status to Contract”.
Yes, you made a serious mistake and back it up with a denial. And you failed to improve on Willis’ point which I think was your original point if your subject line is to mean anything.
They are not on your short list of energy exporters. Try to stay in scope.
Two of your three examples do not have a good record in the 20th century for playing well with neighbors, so soon we forget, eh, and Germany in particular is the nation that elicited that wonderful quote from the Iron Lady. Oh – and the royal Dutch family sought refuge from Germany in England – the first English speaking nation. Why would that be?
Your shout. Actually, don’t bother.
Jrwakefield says:
I drool at your list, if only it would happen… True Utopia.
=========================
There is no Utopian society. The limited form of government I described does increase individual freedom, but with that freedom comes increased individual risk and personal responsibility. The $1.75 trillion the US spends on the compliance costs of rules, regulations and mandates is almost entirely replaced by: product liability laws, insurance companies establishing strict conditions for coverage, and private-sector rating agencies. The FDA, FAA, EPA, Consumer Protection Agency, etc., don’t exist. It’s up to the individual to take the responsibility for their actions.
Market forces, class-action suits, the press, etc. will eventually reduce unscrupulous companies and individuals, but there is increased risk involved; caveat emptor replaces massive rules and regulations.
There will also be virtually no public welfare system, Social Security, public healthcare. Each individual is responsible to save money, provide for his families retirement and purchase low cost catastrophic private sector health insurance, with minor medical costs paid out of pocket. If someone is irresponsible and doesn’t do those things, then people will only have private sector charities, private-sector free clinics, family members, friends, local churches, etc., to rely on.
Education is primarily private funded with local municipalities able to fund local public schools through local sales taxes and private donations.
The upside to all this is that people will have 10’s of thousands to millions of dollars/yr of increased disposable income from much lower taxes and lower costs of living due to the elimination of trillions of regulation compliance costs and banks will have $trillions/yr in additional credit reserves to lend out by everyone saving for their own retirement.
Obviously, those in society unable to physically or mentally provide for themselves will have to be cared for by privately funded institutions.
Such a society could only exist with high ethical and moral standards. People that are lazy, irresponsible and reckless will live a pretty meager existence.
SAMURAI says: @ August 23, 2013 at 9:00 pm
There is no Utopian society. The limited form of government I described does increase individual freedom, but with that freedom comes increased individual risk and personal responsibility….
>>>>>>>>>>>>>>>>>
I remember something like that from the 1950’s. If a family fell on hard times the churches (Yes plural) and neighbors helped. Vagrants were taken to the county farm where they had a roof over their head and food but in return were expected to provide labor if they were able to. Small businesses were every where from the immigrant who spoke little English and took in wash and sewing to Grandma’s butcher shop. Companies saw people as an investment and expected that an employee would work and grow with the company for 30 years or more. People didn’t lock the door because these were communities not strangers living in the same building who never spoke to each other.
Yes there were major problems. Blacks and women were second class citizens and the community was always looking over you shoulder. We had major pollution problems and safety problems in some factories too. But I am not so sure the ‘Cures’ put in place (red tape and bureaucracies) aren’t a heck of a lot worse than the problems. Or there were not alternate better solutions like criminal trespass for pollution control.
@dp, I have no need to shout. Your repeating a falsehood does not change its character of being false. It appears that most other commenters grasp the point, in fact, some expanded the point by including many other factors that prevent some countries from life-improving energy consumption. In time, perhaps you too will get the point.
Nice try on the English-speaking mis-direction. Thatcher could use it in her context, and I used it in mine. Can you refute the facts that the Dutch, Germans, and Japanese do not speak English as a native tongue? Can you deny the positive contributions of the Dutch Rennaisance? And did you note my careful use of the word “modern” for Germany and Japan? The war was over almost 70 years ago. Let’s examine their contributions to the world in these past 65 years or so. Or, are you so hate-filled you will never get past WWII?
Stefan says:
August 23, 2013 at 4:04 am
I think we are still scratching our heads over how and why the West managed to free itself from feudal systems with mythic-membership tribes, serfdom, and etc
Sorry I am late to conversation,
But the one thing to me seems the US culture did and no matter what it was .and like it or not:
They took the bull by the horn, (got to the Moon)
No time , (we are going to do it anyway, Apple, MS, Google, FB and go on)
And see you later ( all of the above and then some!).
Tyranny will get you no where, I am not a genius but the USA Constitution of A Democratic REPUBLIC is the only working model!
“According to Justice Kennedy, the Iraq delegation thanked him tearfully for bringing to the world the US Constitution and its many provisions for legal rights, especially the first ten Amendments known as the Bill of Rights. They intended to copy as much of those rights as they could into their new governing documents.”
I wonder if the members of that delegation know what contempt one of the major parties of this country has for the Constitution, and most of those ten amendments? The party that finds those documents a nuisance in their drive to centralize control of all facets of American life.
A contempt that Justice Kennedy and Chief Justice Roberts sometime share, whenever the Constitution gets in the way of their personal policy preferences. Would that our own “leaders” shared the reverence for the Constitution shown by those Iraquis, and the post-Soviet Poles and Czechs before them.
Blade says:
August 23, 2013 at 2:38 pm
“I disagree with most of the commenters praising this article.
I have him pegged as a typical anti-nuke kook ”
You got that right, friend.
There is a book out called ‘Why Nations Fail’ which emphasises the quality of a countries’ institutions, on how a country develops. It’s an interesting book that looks at basket cases which should do better like Argentina, Zimbabwe and others.
Another one is the head start given to some areas geographically in Jared Diamond’s book ‘Guns Germs and Steel’, which the book above contrasts.
Niall Ferguson’s book ‘The West and the Rest: Why the West Rules for Now’, emphasises the West’s more sophisticated political and social systems, the history of social reform, strong property rights, high level of competition, scientific development, and democracy.
A few points on things that improve a countries quality of life include:
-as you mention, level of corruption is a big one. A country must have a strong rule of law, and this requires strong institutions. Much of this seems to relate to a countrie’s long social history, and how previous and long standing social norms lend themselves to corruption and a lack of middle class representation and weak property rights (a good case being most of South America-Argentina for example has never been able to entirely free istelf from the strong regional land owning-caste power system, which it inherited from before the Spanish arrived).
-rural economies are generally much larger and poorer than urban ones, meaning a low GDP. Limiting family sizes in association with level of income is a step in the right direction.
-protectionism and trade barriers. Eg China has long shut itself off from the rest of the world for social and political reasons, which even Adam Smith noted in his own time (where only two ports were allowed to receive foreign vessels), which only limits mutual trade benefits.
–
–
Roger Sowell says: August 23, 2013 at 6:36 pm
“@ Blade, who is not impressed. I have stated before, and state here again, that if anyone can build a nuclear power plant that costs the same as, and is as safe as, a gas-fired combined cycle plant, then I’m for it. It is bordering on criminal behavior to allow such high-priced electricity production when there are far better alternatives. And yes, I’m all for having attorneys file lawsuits to force nuclear power plant owners to build the plants according to the existing laws. I think any rational person would also want that.”
———————————————————————————-
I suggest you look at why the Japanese have a first time ever in modern history, a foreign balance of trade deficit. It’s because they are buying natural gas to make electricity instead of using their shut-down nukes. The gas is costing them dearly. I once had a tour of the Brown’s Ferry nuke plant in Alabama. It was for members of the American Society for Mechanical Engineers, so there were about 20 of us with 5 guides. Really refreshing talking to someone actually knowledgeable. The guide said the plant was designed to be run by 200 people, but were 3000 employees at the time, in a separate administration building. Obviously, the 2800 employees mandated by law who didn’t even work in the same building added to operations cost. Instead of spending your time promoting the filing of lawsuits to force power plant owners to obey the laws, why don’t you do something to lower costs? For example, by forcing the Nuclear Regulatory Commission to justify the continuous stream of new laws requiring ever higher costs? I think any rational person would want that.
In that same plant tour we passed an employee loitering near a stairwell. The guide asked us “Remember the newspaper headlines a few weeks ago about a major safety violation?” Yes, we answered. “Well, it was because the inspector came through and that person was not standing there” How about lawsuits asking why such asinine laws are arbitrarily put on plant operators? I think any rational person would want that.
————————————————————————————
Sowell: “But, perhaps you find it desirable to increase everyone’s power bill because a nuclear plant sounds cool, or chic, or some other smug reason. I don’t. I want the elderly, and poor, and those just barely getting by to have the cheapest, safest, and most reliable power that our technology can provide. Nuclear power as currently built in the US just does not make the cut.”
——————————————————————————————-
Ah, yes, the qualifier about “as currently built in the US” A Westinghouse AP-1000 plant costs about twice as much to build in the US compared to China. It’s the same plant, so the argument about plant quality is moot. Personally, I do not want the elderly, and poor, and those just getting by to have the cheapest, safest, and most reliable power. No, I want everyone to have that cheap, safe, reliable power. If you look at actual historical statistics, modern nuke power is that. The NRC recently shut down two units in California. There was no technical or safety reason, just a government agency helping to fulfill Obama’s campaign promise of “Under my administration, electricity prices will necessarily skyrocket” The San Onofre units had some actual heat exchanger problems and shut down to evaluate the problems. The plant owner presented the proposed near term and long term fixes. What did the NRC do? They held public meetings for 8 months. What did they expect, somebody in the back of the room to stand up and offer advice on vortex shedding in a tube-and-shell heat exchanger? So now electricity rates in southern California go up. Why don’t you sue the NRC to force them to explain why they are acting against the public interest?
This thread started as a constructive discussion about the causes of poverty around the world. Now, it has become a bunch of personal attacks and derailings into unrelated issues.
Any chance of getting back on topic here?
johanna says: August 24, 2013 at 1:39 am
This thread started as a constructive discussion about the causes of poverty around the world. Now, it has become a bunch of personal attacks and derailings into unrelated issues.
Any chance of getting back on topic here?
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johanna: If you are referring to me, I argue that access to reliable low cost electricity is critical to creation of wealth and social stability. This is on topic. Good government is also critical to the creation of wealth. This is also on topic, and both of these points are thoughtfully argued above. The creator of the thread went off onto a well-meaning but wrong tangent regarding those two as seen in the US. As part of my rant, I pointed out details of how the US government is sliding from good to bad in its job of facilitating the creation of wealth. This is also on topic. I regret having to include details of a few specifics to show by example. (I have many more examples but brevity is a virtue) I expect hot and thoughtful disagreement, and this website is good at promoting that. No personal attacks were intended by me.
Gail Combs says:
Yes there were major problems. Blacks and women were second class citizens and the community
always looking over you shoulder. We had major pollution problems and safety problems in some factories too. But I am not so sure the ‘Cures’ put in place (red tape and bureaucracies) aren’t a heck of a lot worse than the problems.
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I think the soft bigotry of diminished expectations inherent in affirmative action and anti-discrimination legislation and the unintended consequences of “special” justice instead of equal justice have been a severe hindrance to the black community.
Anti-discrimination laws have added a legal liability obligation to employers that discourages them from hiring blacks– not because they’re racists, but because hiring blacks creates an unwanted and unnecessary risk that can be avoided by hiring someone else.
Race has become a political weapon and a source of envy and derision, which was never the intent of MLK.
To strengthen societies’ civility and charity, those virtues must be exercised on a personal level or they atrophy. When a society surrenders its civil obligation to the state, it robs the people of the satisfaction of its true humanity to man to its detriment.
Anyway, the current system is imploding. US’ $20 trillion in national/state debt and $100~200 trillion (depending on source) of unfunded liabilities due to massive entitlement spending and gigantic government bureaucracy have bankrupted the US. Bond rates are starting to spike, so it’s getting pretty close to the end game..
We’d better start setting the groundwork now for a restoration of our Republic or it’ll be replaced by something far, far more tyrannical than what we have now.
“There is no Utopian society. The limited form of government I described does increase individual freedom, but with that freedom comes increased individual risk and personal responsibility.”
But that is as close to a Utopia as we can get.
@Dan in California, re the nuclear plant at San Onofre.
Perhaps you are willing to tell Southern California Edison, operator and primary owner of the plant, why they should not have shut it down but keep running it with tubes that fail?
The simple fact is that SCE got caught breaking the laws, or regulatory requirements, if you prefer. The replacement steam generators were required, by law, to be “like for like” in design. This means the new ones had to be almost identical to the original equipment, with some room for very minor differences. They were not sufficiently similar, and SCE knew it.
The NRC requires a detailed analysis and review for materially (substantially) different replacement equipment. The review can take a year or more. SCE was fully aware of this review process.
SCE built the new steam generators with the differences that would trigger the review process, but told the NRC they were “like for like”. They got caught in the deception when the tubes vibrated and leaked.
Being caught in the lie, SCE chose to shut it down. They could have complied with the law, purchased new steam generators that truly are “like for like” but they clearly did not.
I’m glad you brought this up. It clearly shows yet another instance of nuclear power plant owners putting the public at risk of great harm from radioactivity release.
For what it’s worth, I was part of a tour of chemical engineers at the Perry nuclear plant on Lake Erie. Our guide was the plant engineering manager. The plant was 99 percent complete and was waiting for fuel delivery. It’s known as the Mistake on the Lake.
“””””…..jrwakefield says:
August 23, 2013 at 8:14 pm
“But if as you say, it IS produced by biological activity, then of course it is a renewable source; unless biology is planning to stop any time soon.”
But the rate of formation of organisms into oil is very slow, millions of years needed. Again, in Oil 101 the author looks at oil fields and explains when they were formed, and why. Generally periods of “global warming”, when the planet naturally cycled into warmer times. That meant much more biological activity. Hence a warmer climate is a better climate for the biota! Dont tell Gore!
As for abiotic, how come there are no oil fields in Precambrian rocks? Not one oil field came from rocks older than 450myo……..”””””””
Well jr , I guess I’ll take your word for it; your reasoning sounds plausible. From my limited understanding, there pretty much wasn’t any life on land before the Cambrian era, and I presume they mean no plants or animal life.
Presumably, both CO2 and H2O would be highly desirable raw feedstocks, for making hydrocarbon molecules, so I can see why such chemistry might take place in ancient oceans.
But if both were available I don’t see why biology would be necessary to perform the chemistry. I can see why CO2 and H2O might not be widely available together in rocks from deeper in the earth brought up by volcanism.
So OK maybe oil formation has only been going on for 500-600 million years in the oceans; but it still is a renewable resource.
Anyhow, thanks for the info on the source rocks; never had heard that before.
“””””””……..SasjaL says:
August 23, 2013 at 5:19 pm
george e. smith on August 23, 2013 at 11:21 am
Really? Currency inflation would have changed the rate, but not. Here, it has been relative stable for many years – 1 NOK : 1.12-1.17 SEK. As the Swedish currency have become stronger compared to many other strong currencies like EUR, GBP and USD, the same is valid for the Norwegian currency (during the last finance crise, both countries manage to stay out of the worst, in Sweden due to the right-wing economics, not sloppy/utopian left-wing ditto …).
Sorry to say, if traditional currency inflation “rules” really worked, the USD would have been of very low value today, due to the huge amount of both electronical money and genuine bills available world wide … (Have you seen the US million dollar bills with Obama’s mug …? 😉 )…..””””””
Well Sasjal maybe you missed the entire point. The inflation of the Elizabethan era, was caused by the gold riches plundered from the New World. The Meso-American cultures of the pre-Columbian era used gold, and other (now) valuable materials to make trinkets and artifacts.
Taking all that gold to Europe didn’t result in any great industrial revolutions or technology advances; it was simply used to compete for whatever limited products there were.
When “new money” invades existing economies, the price of everything simply increases to absorb it.
Roger Sowell says: August 24, 2013 at 6:42 am
@Dan in California, re the nuclear plant at San Onofre.
Perhaps you are willing to tell Southern California Edison, operator and primary owner of the plant, why they should not have shut it down but keep running it with tubes that fail?
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That’s an easy one. Engineers know the answer, plant operators know the answer, steam locomotive engineers know the answer, and even amateur “live steam” modelers who build their own scale trains know the answer. Boiler tubes fail. Happens all the time. The old, well tried solution is to hammer plugs into the bad tubes and go on with fewer tubes. The designs account for this common operational occurrence. SCE proposed this and the NRC stonewalled them. After 8 months of waiting, SCE retired the plants.
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The simple fact is that SCE got caught breaking the laws, or regulatory requirements, if you prefer. The replacement steam generators were required, by law, to be “like for like” in design. This means the new ones had to be almost identical to the original equipment, with some room for very minor differences. They were not sufficiently similar, and SCE knew it.
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Of course SCE knew it. The NRC knew it too, and allowed it. NRC reviews the design of every nut, bolt, and washer in a nuke plant. There are thousands of pages or review documents before a nuke plant is allowed to operate. In this case, they tried to do some product improvement, so that more power can be sold for less money. It’s the pursuit of low cost electricity that helps a nation prosper. But let’s assume SCE did return to operation. Remember, nukes are relatively expensive to build and cheap to operate. Fuel is about $.015 per KWHr. Operating at 70% power, as they proposed, would provide 700 Megawatts of low cost power to the grid. If more tubes failed, it would have exactly the same effect as the previous time they failed, that is, no external effect. Some leakage between the two water loops. They are then back to where the they were a year ago with a non problem. No effect on plant workers (except they would have jobs), and no effect on the uninvolved public, except their rates would be lower.
Now Mr Sowell, since turnabout is fair play, I think it should be you who explains to SCE’s customers why their rates are going up because SCE had to shut down a perfectly good, safe and reliable power plant. (And for all you non-technical folks out there, in this example heat exchanger = boiler = steam generator)
In the spirit of previous commenters, my vision of a step toward utopia is a Constitutional Amendment that requires employees of regulatory agencies to have at least 10 years experience working within the industry they regulate.
Way back on the topic of the Rule of Law being key for economic prosperity . . . it is not democracy that is key; more important are liberty, the rule of law, and individual responsibility and choices. I think it was Benjamin Franklin who said: “Democracy is two foxes and a hen voting on what to have for dinner. Liberty is the hen with a gun having the power to ignore that vote.”
AnInquirer, thank you for this. Mr Franklin is one of my favorite philosophers. Here’s a link to some of his best: http://jpetrie.myweb.uga.edu/poor_richard.html although he is at least somewhat paraphrased, as the word ‘lunch’ was not in frequent use until later.
The first three listed there are:
“Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.
When the people find that they can vote themselves money, that will herald the end of the republic.
They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.”
All three of these have special significance in the USA today, and to this thread in particular. Now permit me to tie this to anthropogenic global warming. The EPA/NOAA/NASA federal agencies have spent spend billions of taxpayer dollars to create a new ‘climate science’ and have paid scientists to show just how bad it is to burn carbonaceous fuels. Then they pay environmental organizations to sue the EPA to regulate the burning of carbonaceous fuels. The result is court findings referencing experts that burning carbonaceous fuels is bad. Then the EPA uses these legal precedents to crush the electric power industries and lower the standard of living for us all.
Where are the checks and balances on this? We have a few brave skeptics such as on this website pointing out that ‘climate science’ is neither science nor is it correct. The EPA is just plain hurting the population they are supposed to protect. Similarly, the Nuclear Regulatory Commission is just plain wrong in its continuous stream of raising the bar for power plant operators to abide by.
This has been a worthwhile discussion – a highly informal update, perhaps, of Adam Smith’s “The Wealth of Nations” (1776).
Background:
I have significant business and travel experience on six continents, specifically in regions such as the Western Europe, the Former Soviet Union, North Africa, Australia and North and South America. I have spent most of my career in the energy and mining industries including senior management. My strategic and fiscal (tax and royalty) initiatives were instrumental in revitalizing the Canadian oilsands industry in the 1980’s and 1990’s and Canada is now the 6th largest oil producer in the world and the most prosperous country in the G8.
My comments:
In travels it was at first difficult at first to understand why countries that were as rich in resources and older than Canada were so poor, and why wealth was so unevenly distributed. The common thread of wealthy nations soon became apparent and it was Rule of Law in all its forms. Rich nations allowed their people to build and retain most of the benefits derived from their honest efforts.
For most of my life the USA has been more materially prosperous than Canada. Contributing factors included the USA’s greater population, access to capital, entrepreneurship, and access to cheap energy and cheap labour. The USA also enjoyed less government regulation and more checks and balances to major government impropriety than Canada.
Since about 1970 the USA has been bleeding financially, due in part to ever-increasing oil imports. King Hubbert was correct (within his scope) when he stated in 1956 that USA oil production would peak circa 1970.
Energy production in the USA is now increasing rapidly due to the new technologies of the “shale revolution”. Cheap energy could fuel an economic recovery in the USA. The price of natural gas in the USA is about $3.50/MMBtu versus ~$110/Bbl for Brent crude oil. A barrel of oil has roughly 6 times the energy content of a MMBtu of natural gas, so US natural gas is about one-fifth the price of world oil on an energy-equivalent basis.
However, US governments have burdened themselves with excess government spending, resulting in huge deficits and a total debt that seems unsustainable. Many Western European governments are in the same difficult position.
The USA has been able to stave off the worst impacts of ever-increasing deficits due to the status of the US dollar as the global reserve currency. In recent years the USA and other major global currencies, (the Yen, Pound and Euro) have engaged in a Currency War, each printing huge amounts of their currency. The USA has ~tripled its monetary base since September 2008 and has used these funds to finance its growing deficits. This could end badly.
A closely-related threat to prosperity is excess government regulation. The necessary balance between public protection and excess government regulation has been overturned, and a pragmatic re-balancing is necessary in all Western democracies.
The intention of the Obama administration to bypass Congress and use the EPA to “fight climate change” is a current example of this imbalance, and this too will end badly.
We can say with increasing certainty that increased atmospheric CO2 is NOT a significant driver of global temperature. There has been no significant global warming for 10-20 years despite increased atmospheric CO2. By far the greatest threat to humanity is not global warming, but global cooling, which is a certainty within the next few millennia, and may have already begun.
There have been quite a number of comments on the importance of the “Rule of Law.” Rather than some degree of anarchy or corruption, having laws that are enforced is vitally important; but the fairness of the laws is equally or perhaps more important. I made this point in the essay, with the example of being able to collect on a judgment. Another example is the law in England before the Magna Carta. England had laws, and they were enforced, yet their very lack of fairness led to a revolt against the King and ultimately the signing of the Magna Carta. There are many details left out of those previous two sentences.
Another example, a favorite of mine, is the vital importance of Patent Laws. In the US, the founding fathers recognized that importance, so much so that forming a Patent Office with patent laws was included as an enumerated power in the body of the Constitution. Article I, Section 8, paragraph 8 states: “Congress shall have power . . .To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;” The founders placed such importance on Patents that they listed the justification in the Constitution: “To Promote the Progress of Science and Useful Arts.” This is remarkable, as it is the only such enumerated power to have a written justification.
It is widely recognized that one reason for the enormous success of the US has been its strong patent laws. As a counter-example, India until very recently had weak or non-existent patent laws. The bright inventors in that country had no incentive to innovate, tinker, and improve their ideas because anyone could copy it and use it for themselves. As an aside, the US patent laws were recently amended, to “harmonize” them with those of other nations. Briefly, an inventor now must rush to the patent office to file his or her application, because the first to file will receive the patent. Previously, the US had the “first to invent” doctrine, which was superior according to many patent scholars. I support the first to invent doctrine.
Yet another example, again briefly mentioned in the essay, is the importance of government regulation. Commenters above refer to the regulation of oil and other mineral rights. Regulations that limit destructive activities such as monopolies, business collusion or price-fixing, defrauding investors, and gross pollution, all are important. Yet, regulations that stifle commerce or cut employment are equally important and should be avoided.
Roger said: “First, I did address the issue of “time.” OPEC has existed for 50-plus years. It is not “time” that is the problem. ”
OPEC has existed for 50 plus years – so what? The Dow Jones Industrial average has existed for longer, but its components have shifted.
Nigeria also had a civil war – right before it joined OPEC.
Roger said: “Second, I did not disagree with Eschenbach. Please go back and read what I wrote. I stated explicitly that on this point, I agree with Eschenbach. I pointed out Japan as proof positive that having domestic energy resources is not a prerequisite.”
The problem is – Willis Eschenbach never said anything about a nation requiring intrinsic energy resources in order to increase GDP. The data points he put up were entirely in the realm of how much per capita energy is needed to achieve Spain/Italy levels of energy consumption. Thus Japan is irrelevant – and equally are tales of countries that have oil but aren’t Spain/Italy. Spain was the richest nation in the world 600 years ago. Italy has been a center of civilization for 2000 years. Both of these nations have literally centuries of infrastructure development not to mention time to mature into stable societies.
Many of the nations you refer to are artificial creations – legacy of de-colonialization after World War II. Nigeria’s civil war can be traced directly to this, as can the hodge podge nature of many of the North African and Middle Eastern countries.
@ c1ue, re time required.
Your argument is that the poor nations need more time to develop infrastructure. Italy had an advantage due to being civilized for 2000 years.
Then, please explain the poverty in Egypt, which has been civilized for at least 7000 years. Then, explain Hong Kong’s prosperity. Then, explain how Canada and the USA went from wilderness to great prosperity in just over two centuries.
Australia, too was wilderness but has a high standard of living after colonization by England.
I repeat, time is not the issue.
Roger Sowell says: August 25, 2013 at 8:14 am
Yet another example, again briefly mentioned in the essay, is the importance of government regulation. Commenters above refer to the regulation of oil and other mineral rights. Regulations that limit destructive activities such as monopolies, business collusion or price-fixing, ……
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Absolutely, but what can citizens do when the biggest problem is the monopoly that is the government? Sure, we elect representatives, but the unelected staffers actually do most of the bill writing, and the staffers are frequently passed on from congressman to congressmen after elections. Another example: Truth in advertising is enforced with occasional prison terms for the offenders, yet nobody has the power to force politicians to make good on their campaign promises.
And as for “business collusion or price fixing” of course that’s bad. But again, how do you control price fixing on the part of government agencies? One example I give is the Interstate Commerce Commission telling the railroads what they must charge to transport goods. This almost killed the entire privately owned railroads in the country. It did kill the New York Central RR, Pennsylvania RR (which had merged by then), Erie Lackawanna RR, the Reading RR, and the New Haven, which were nationalized into ConRail. The Staggers Act deregulating rail operations came along just in time. I’m old enough to remember the cold war arguments that using trucks (Americans) is better than railroads (Soviets) because roads are more difficult to destroy in a war.
“Dan in California says:
August 25, 2013 at 1:14 pm
I’m old enough to remember the cold war arguments that using trucks (Americans) is better than railroads (Soviets) because roads are more difficult to destroy in a war.
Maybe then, but not now. Roads/rail are communication networks and there is the technology to render either useless from the air. I wonder how well Sowell would do in France where ~80% of electricity is sourced from nuclear? My guess the French would tell him to foutre le camp.