Wednesday, February 23, 2011

Optimism on Climate Change

As a counter to my constant pessimism, a case can be made that solar power really can dramatically reduce fossil fuel consumption. The technology is improving so rapidly that it should become so cheap that people will naturally make the switch in the coming years.

Free market types will pretend this is some sort of victory for laissez faire economic theories. But it's another example of important nature of public subsidy for high tech industry. Not every element associated with the development of solar technology occurred with public subsidy, but key costly ones were. Bell Laboratories as a government sanctioned monopoly, was able to engage in the kind of R&D that isn't concerned only with short term profits. In 1954 they developed the first solar cell capable of powering electrical equipment. This was then exploited by NASA, first with Vangaurd I in 1958 and then with subsequent satellites during a time when it was simply too costly for commercial use.

Obviously today the technological advancements come about with the aid of computers and the internet, both developed with public subsidy. This is not to discount the importance of private individuals exploiting the technology because it is profitable. So for instance in the mid 50's Bridgers and Paxton, an engineering firm, created an office building heated by solar power which is still in use today. Private individuals exploiting the technology helps advance the technology as well. But the public subsidy is key. I would suggest that without it this wouldn't be happening. And it could go a long way towards increasing the chances of survival for our species.

Climate change is a long term problem and cannot easily be addressed by corporations that can only consider relatively short term profitability.

12 comments:

HispanicPundit said...

For Jon, no matter what technology comes about, because government had a role in creating the internet, in creating computers, and in subsidizing Universities, all credit will always from heretofore be to the government.

But Jon isn't completely honest in his discussions. What he fails to mention is that inventions like the internet, like the invention of GPS, or infrared, and many to come, was all invented for military reasons. It was all military R&D, not some benevolent government R&D. In other words, if this justifies government, it justifies a specific type of government involvement - the immense returns we get from military R&D.

So from hereon, I expect Jon to preach the large returns we get from military R&D and be a strong force in its increased funding.

Jon said...

Computers were a game changer. Everything going forward benefits from their development. And their development was through the public sector. That's not my fault. That's just the way it is. You don't like it because it doesn't fit your economic narrative, but that doesn't change the facts.

No doubt these advances are via military. But the lesson learned here is not "We must strive to be effective killers in order to have technological advancement." The lesson is looking at game changing advancements in technology they don't seem to make it without critical public sector support. Solar power is another potential game changer.

It doesn't have to be this way. Publicly subsidized R&D can be used for the development of technology that has as its goal the betterment of humanity rather than death. So for instance the National Institute of Health makes possible medical advancement. But the choice was made to go with defense. This was not an arbitrary choice. It provides a much better weapon when it comes to class warfare, which is being consciously waged by the owners. There's a lot of information available demonstrating that, but I'll save the proof for another thread.

Paul said...

But Jon isn't completely honest in his discussions. What he fails to mention is that inventions like the internet, like the invention of GPS, or infrared, and many to come, was all invented for military reasons. It was all military R&D, not some benevolent government R&D. In other words, if this justifies government, it justifies a specific type of government involvement - the immense returns we get from military R&D.


HP - I trust you know better than to draw the conclusion you did in this response.

HispanicPundit said...

Actually it does fit my narrative. Most economists, even Milton Friedman, believe in some level of public R&D. It's not as anti-capitalist as you assume.

And they support it for the same reason that you cite: it tends to favor large inventions that have more positive externalities than a business can fully capture. In other words, it tends to solve a specific market failure.

It's not really the capitalist view - atleast not the intellectual Milton Friedman capitalist view - that you are attacking Jon. It's a straw man capitalist view. It comes from you getting your economics from Rush Limbaugh instead of say, giants like Friedman.

But I still find it ironic, and somewhat entertaining, to see you giving credit to military R&D. :-)

HispanicPundit said...

When you do your tallies of lives lost vs lives saved...please add all the lives saved by computers, GPS, and internet to the US military side. That is, after all, the logically consistent thing to do. :-)

Jon said...

I don't know if you missed where I already said this, but public subsidy for R&D doesn't have to be for the purpose of killing people. You can subsidize it for the purpose of human betterment.

So you can take the lives gained though the technological advancement and subtract lives taken through military adventures and say it's a net positive. But if you just take out the killing it's even more positive. That's what I would suggest.

HispanicPundit said...

Maybe. But remember, incentives are different. With military R&D you have a set goal and you move towards it. With general public R&D its more by chance. Random. I dont see how the internet and especially GPS could have come with public R&D. It might have, but probably would have taken alot longer.

In other words, the fact that its military R&D gives it a specific umph that you don't see with general public R&D.

Paul said...

With military R&D you have a set goal and you move towards it. With general public R&D its more by chance.

HP - can you back up this statement beyond a hunch? I can think of many goals and/or objectives of general public R&D. The problem I don't think would be in coming up with goals (hint I suspect it can be done very similarly to how military goals are set). The issue, I believe, is actually getting a by off from people who share your overall political philosophy.

Jon said...

That's right, Paul. The "defense spending" label is a cover for things that transparently have non-defense related uses, like the inter state highways. That's supposedly defense spending. Of course the military will use it too, but that's hardly the primary use.

HispanicPundit said...

Read the stories of how the internet was invented. How GPS was invented. Or even how the computer was invented. I linked to them in my first comment.

They had specific national interests in mind and these inventions just kinda came about.

I am not arguing that general public R&D can't have goals as well, I am merely arguing that it would be more sporadic. Someones suggestion of "why dont we focus on extraterrestrial communication" could be just as valid as, say, someone saying "lets focus on developing better solar panels".

TO say it another way, these inventions, atleast at birth, made sense from a national security standpoint. You can understand, for example, why GPS was invented in the context of national defense. So it would make sense that they were more likely to be created in a national security setting...then one without that specific goal in mind.

Btw, Bell Labs has enjoyed government monopoly support on and off throughout its years of existence, and if you look at the actual output it is producing , it seems to remain relatively constant. This tells me the government monopoly had little to do with it, aside from the fact that the government had the financial resources to get so many minds together - monopoly or not. Then there is the fact that AT&T, a private company, was also involved. So I think Jon's best case argument, Bell Labs, is at most 2/3 private sector credit.

Jon said...

Roads also make sense from a national security perspective, but I very much doubt everyone was blind to it's other uses.

AT&T is the parent company, and government sanctioned monopoly, of Bell Laboratories. So they are of course involved, and that's my point. Game changing R&D comes about when government protects the institution from the ravages of the free market.

I recall John Stossel criticizing government developed products and using as his example some Soviet made car that everyone hated. It's just so ridiculous. Government has produced huge technological advances. The major developments that are the cornerstone of our economy are the result of public subsidy and protection.

HispanicPundit said...

I dont disagree. Like I said: its in that corner market where government R&D is likely to produce greater return: large initial investments with long term return. Satellites. GPS. Inventions with a very low probability of coming to fruition. etc.

No disagreement here. My only point is to get you to see the overwhelming free market part as well.