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I ask my students the following question:

Briefly characterize why the argument that “we are dependent on foreign oil” as a justification for developing alternative energy sources is a poor one.

You could attack this issue in one of three ways:

(1)   Understanding the extended order of human cooperation will lead you to understand that the production and consumption of any good or service, even the simplest object you can think of, requires the cooperation of people from all over the globe (and through time). This process is highly impersonal, with no one in control, and certainly not directed out of concern for others. For example, to make the piece of chalk I use in class, someone had to build the equipment to mine the rock. Someone grew the food for those workers to sustain themselves, and someone made the clothes they wear while they work. Someone drilled the oil to power the production of all these things, etc.

In other words, we “depend” on foreigners for everything that we do. And that is no less true whether we used wind, solar or petroleum to power our economy.

(2)   Why is “dependence” on foreign oil in particular such a concern? We are equally dependent on foreign clothes and foreign food and foreign wood, and so forth. But more important, when we move to an alternative energy source, that does not eliminate our dependence on foreign suppliers of important resources, and in fact may worsen it. For example, the production of hybrid automobile engines requires a good amount of vanadium and other rare earth metals, much of which is produced (solely) in the countries that we claim to be worrying about selling oil to us for. So one must ask, why is dependence on foreign vanadium for our well being any different than our dependence on foreign oil?

(3) Oil is oil is oil! In other words, oil is a commodity in the sense that a barrel that is refined from Saudi Arabia is similar to a barrel that is refined from Norway or Japan or Mexico. In such a global market, the price of oil is determined by the global supply and demand for oil. As such a seller is unable to isolate any single customer, not is a buyer able to isolate any particular seller.

In order to be fully independent of foreign oil (or any other commodity) we must not reduce our consumption by a portion equal to our percentage consumption of foreign oil, we must not reduce it by 50% or 90% … but we must reduce our consumption of oil by a full 100%!

You might view this as bad, but it is the same logic that should comfort you that we do not depend on any one or two or few suppliers for our oil. For example, if the Saudi’s want to withhold oil from us, but they still want to sell their oil – that oil enters the world market, and the foreign oil consumed in the US would simply come from somewhere else (or even Saudi Arabia indirectly). Similarly, if the US wanted to stop buying Saudi oil, it would end up consuming oil from somewhere else. But if that were the case, the Saudi oil would still get sold elsewhere on world markets. Further, even if the US stopped consuming 100% of the oil it used to buy from the Saudis without replacing it, oil prices would fall, but Saudi oil would still be abundant on world markets, and we will still be affected by what happens in Saudi oil markets.

Invoking ‘dependence” on anything as a reason to do less of it is simply a bogeyman, and makes it easier for the environmental bootleggers to take cover behind the naive fears of individuals that being dependent on something foreign is a bad thing.

2 Responses to “Anti-Capitalism in Many Lessons: The Dependence Bogeyman”

  1. Vanadium Joe says:

    The future will be battery powered. Vanadium makes the best batteries: http://bit.ly/7AbZUK

    Oil? Ha!

  2. BS's Father says:

    My Dad had a lot to say when he read this but was to lazy to write it down, so i’ll do my best in as little words as possible:

    The same people we buy the majority of our oil from want to bomb us. In many ways, buying oil from those countries is helping to finance terrorism.

    We may be equally reliant on foreign clothes, chalk and wood, but oil is needed to fight wars. If the huge majority of oil is owned by enemies, we are in trouble. If the huge majority of chalk is owned by enemies, we can use pens.

    If ” dependence on foreign oil” is replaced with “dependence on oil from countries that hate America,” the obsession with oil is a little more clear.

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