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Living in a society that respects the rule of law makes life much easier to live. The reason for this is that by living according to a fixed and unchanging and non-influenced set of rules, we substantially reduce the “transactions costs” of living (our economic lives in particular).

For example, without rules, we would have to negotiate with many others (everyone?) to get consent to do just about anything. That would be moderately inefficient. So instead, in civilized societies we have property institutions and the rule of law to smooth this out. When we live this way, we are explicitly and implicitly sanctioning certain behaviors and not providing sanction to others. For example, in a regime that respects property, we are permitted to harm others! Really! One way we do this is by doing research into a product or inventing a new product and then trying to persuade our fellow citizens to purchase it. If that product is successful, we permit the harm to existing producers that are making a now less attractive alternative.

We don’t sanction entrepreneurs doing harm to one another … at least we used to not sanction it. For example, if I am FedEx, I am not permitted to put sand in the gas tanks of all of the UPS trucks. Sadly, through the power of government, some firms have managed to do exactly this sort of thing (see the tobacco settlement for a dramatic example).  Furthermore, we sanction harming others for our own benefit! If an intruder breaks into my house, in the name of self-defense I am permitted to shoot him. Oddly, as a society we also do NOT sanction peaceful activities that are done in the name of furthering my own interests. For example, if I wish to do plumbing work around the neighborhood, I am not permitted to do it unless I have a license, or I am not permitted to work for less than $7.25 per hour.

But let’s focus on the first of the issues I raised above – that we sanction the harm done to others resulting from competition. But do we really? It seems to me to be conventionally believed that competition from foreign auto-companies is a bad thing because it harms American auto workers. It is believed that competition from foreign call centers is a bad thing because it harms Americans working in call centers. And so on. I bet many of the folks who hold views like this are also in favor of promoting US policies to advance alternative energy. This strikes me as more than moderately inconsistent. How can we bemoan the harm competition does in some sectors but not in others? Why would these folks view it as OK to harm all of the people currently employed in fossil fuel related sectors?

If not allowing job loss is a core objective of these economic policies, then it is utterly inconsistent to push for green technologies. This is probably why the green technology folks seem to be offering some kind of an economic-employment free lunch when they argue that subsidizing currently unprofitable industries will create jobs. How can you hold these views simultaneously on economic grounds? You cannot. It appears to me that trying to dress up their arguments in economic terms is mere cover for their underlying anti-capitalism. Of course, I have no way of testing these sorts of things, all I can do is point out the myriad logical inconsistencies.

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