October 14, 2008
In Mario Puzo’s book, The Godfather, Vito Corleone is able to rise to power by intimidation and sometimes murder. As Puzo describes it, Corleone made sure that his competitors in distributing olive oil (yes, Vito did do olive oil, among a few other things) had a few problems, like having their delivery trucks robbed, oil dumped in the streets, and whatever else it took to convince his rivals that they should not compete with him.
The Godfather, of course, is a novel (later made into a movie). It is eminently readable, but a novel all the same. What happened this past week, however, was not from a novel, but rather from the mouth of the former U.S. vice president and the Nobel Peace Prize winner:
LONDON, England (CNN) — Former vice president and environmental campaigner Al Gore has urged young people to protest against new coal-fired power plants that don’t use carbon capture and storage technology.
Speaking at the opening plenary session of the Clinton Global Initiative Annual Meeting in New York, Gore said: “If you’re a young person looking at the future of this planet and looking at what is being done right now, and not done, I believe we have reached the stage where it is time for civil disobedience to prevent the construction of new coal plants that do not have carbon capture and sequestration.”
There is a problem, of course, and that is that there is no developed technology of “carbon capture” for power plants that can be applied on a large scale, and the early reports are that such a technology would add another 50 percent to the capital costs of the project, making the plant so expensive that it is not worth building in the first place. Thus, my first reaction to this article was to dismiss it as Al Gore being Al Gore: like the idiot uncle in the closet who escapes once in a while.
However, when one combines this latest outburst with his recent call to eliminate all coal-and-oil fired power plants from the United States and replace them with “renewable” energy sources such as windmills and solar panels, a whole different picture emerges. Gore claims that these “new technologies” will “stimulate the economy,” but this is nothing more than the Broken Window Fallacy in different terms.
Beyond all his claims of “new technologies” and the like, there was another statement that Gore made which exposes what he is doing — and it is not “saving the planet”:
“I believe for a carbon company to spend money convincing the stock-buying public that the risk from the global climate crisis is not that great represents a form of stock fraud because they are misrepresenting a material fact,” he said. “I hope these state attorney generals around the country will take some action on that.”
Gore clearly is calling for executives of electric power companies that build power plants to be charged with felonies (securities fraud is a felony under state and federal laws), which means that he wants these people to go to prison simply for building electric power plants. Again, it is easy to dismiss this as more Gore rhetoric, except that his actions are much more nefarious than just a nutty guy running his mouth.
Al Gore, you see, is a competitor of the electric power companies. He is not just an advocate; he is a major partner in a fund called Generation Investment Management Ltd., which just capped out at $5 billion. (I doubt seriously that Gore brought any money into the fund; he is the political front man, but stands to become an extremely wealthy person through it.)
Now, if Gore simply were a guy making money on the free market who had radical opinions, I would not be writing this article. However, that is not what is happening. Al Gore is a powerful political figure who is calling for his shock troops to use violence — and don’t kid yourself, that is what he wants — against companies with huge cost advantages against his own technologies of choice.
For all of the ballyhoo for solar and wind power, the ability of these mechanisms to create the energy that comes from coal, oil, or natural gas is miniscule. Robert Bryce in his recent book, Gusher of Lies: The Dangerous Delusions of Energy Independence, lays bare just how inferior the Gore-financed technologies really are. In fact, if it were not for the special subsidies, tax breaks, and government purchases of these various energy devices, Gore’s fund would be topping out at zero. To put it another way, Gore’s “new technologies” are not commercially viable on a large scale, and certainly cannot begin to replace the current electric production grid in this country and most likely never would be able to do so.
Thus, if these technologies are going to be used on the scale that Gore demands, the only way to do it is through naked brute force. In a word, Gore is appealing to thuggery; he cannot beat his competitors in the marketplace, so he calls for gangs of thugs to shut down construction of these plants, and if that does not work, he wants the government to arrest and imprison the owners.
Vito Corleone, while he could manipulate the law, never was the law. Individual congressmen could send up bills for Vito, judges might look the other way, but his overall influence was marginal. Gore, on the other hand, is becoming a political force at a time when Congress is about to nationalize the entire U.S. financial system, which means that investment in the future is going to flow toward those projects that are politically-connected.
In a free market, investment dollars flow to those projects that promise the most profit; in a political market, the profits come not from correct entrepreneurial choices, but rather from manipulation of the tax code, subsidies, and outright force.
Gore’s latest outbursts, however, bring a new element into the whole energy markets. He is calling for criminalization of burning oil and coal, and if that won’t work, he wants gangs of thugs to shut down the building of new plants, all in the name of the scam of global warming.
It is his crusade for the state to control the weather, of course, that gives Gore the cover to call for thuggish acts by others which will result in Gore becoming even wealthier than he already is. The economist Bruce Yandle once pointed out in his “Baptists and Bootleggers” example that calls for regulation will come from people who represent the “Baptists” in order to front for the “bootleggers.” (Baptists and bootleggers both want the liquor stores closed, but for very different reasons.)
Al Gore, however, is taking Professor Yandle’s analogy up another notch. That is because Gore is playing the role of both Baptist and bootlegger. I should add that he also seems to be auditioning for the role of the Godfather himself.
William L. Anderson, Ph.D., teaches economics at Frostburg State University in Maryland, and is an adjunct scholar of the Ludwig von Mises Institute. He also is a consultant with American Economic Services.