Home > Enviro Derangement Syndrome, Lew Rockwell, power, Reisman Rule > In which I applaud another balanced, productive post by Dr. Reisman, and draw attention to a post by Lew Rockwell on the need for more power competition

In which I applaud another balanced, productive post by Dr. Reisman, and draw attention to a post by Lew Rockwell on the need for more power competition

[Snark Factor:  Ridiculously High]

In honor of Earth Day, yesterday Dr. George Reisman, Professor Emeritus of Economics at Pepperdine University and author of Capitalism: A Treatise on Economics, put up a fun little post that mocks the full-employment arguments made by President Obama on behalf of environmentalists and investors in the wind and solar power industries.

On the comment thread, I couldn`t resist expressing my appreciation, while introducing newer readers to the deeper challenge to which Dr. Reisman invites his readers:

I too have enjoyed another delightful article from Dr. Reisman; bravo!

But Dr. Reisman`s style does seem to present problems of
interpretation for some readers, whom do not seem to understand that
while Dr. Reisman appears to simply be bashing environmentalists or
environmentalism generally (by focussing on the most absurd arguments
that some of them offer), he is in fact challenging his readers to do
precisely what he has studiously avoided.

That is, far from simply pulling the wings off of flies as he might
seem to some, Dr. Reisman is actually suggesting that serious students
of economics and libertarian approaches to society should diligently:

  • – seek to engage others productively and with sympathy, in a manner
    carefully designed to improve the functioning of markets and ancillary
    institutions that enhance plan formation across society;

    – note that there are many important, valuable open-access/unowed
    resources and government-owned resources – in which property rights and
    pricing mechanisms are working poorly at best;

    – acknowledge that while proposed “solutions” offered by
    environmentalists may be misguided, enviros have legitimate preferences
    as to how such resources should be protected, managed and distributed;

    – recognize that the concerns of enviros frequently arise in
    response to government interventions have clearly benefitted powerful
    insiders, including wealthy investors and large enterprises, while
    shifting costs and risks more broadly.

    As a result, Dr. Reisman`s tongue-in-cheek posts are in fact searing
    of the status quo and tbe fat cats who are using government
    to stifle open competition, consumer choice and innovation, while
    frequently generating large external costs. Unlike some who spoil the
    fun by engaging in the pedestrian task of spelling out the problems
    with the status quo that enviros are right to be dissatisfied with, Dr.
    Reisman treats his readers as adults by bracingly challenging them to
    use their thinking caps and to clear their own heads.

    For those for whom this task is too difficult, perhaps this piece by Lew Rockwell might be a good start:

    “Just who is in charge of getting electricity to residents? A
    public utility, which, in the absurd American lexicon, means
    “state-run” and “state-managed,” perhaps with a veneer of private
    trappings. If you look at the electrical grid on a map, it is organized
    by region. If you look at the jurisdiction of management, it is
    organized by political boundaries.

    “In other ways, the provision of power is organized precisely as
    a central planner of the old school might plan something: not according
    to economics but according to some textbook idea of how to be
    “organized.” It is “organized” the same way the Soviets organized grain
    production or the New Deal organized bridge building.

    “All of centralization and cartelization began nearly a century
    ago, as Robert Bradley points out in Energy: The Master Resource, when
    industry leaders obtained what was known as a regulatory covenant. They
    received franchise protection from market competition in exchange for
    which they agreed to price controls based on a cost-plus formula — a
    formula that survives to this day.

    “Then the economists got involved ex post and declared that
    electrical power is a “public good,” under the belief that private
    enterprise is not up to the job of providing the essentials of life.

    “What industry leaders received from this pact with the devil was
    a certain level of cartel-like protection, the same type that the
    English crown granted tea or the US government grants first-class
    postal mail. It is a government privilege that subjects them to
    regulation and immunizes companies from business failure. It’s great
    for a handful of producers, but not so great for everyone else.

    “There are many costs. Customers are not in charge. They are
    courted only for political reasons but they are not the first concern
    of the production process. Entrepreneurial development is hindered. Our
    current system of electrical provision is stuck in time. Meanwhile,
    sectors that provide DSL and other forms of internet and
    telecommunication services are expanded and advancing day by day — not
    with perfect results but at least with the desire to serve consumers.

    “How New York and California consumers would adore a setting in
    which power companies were begging for their business and encouraging
    them to turn down their thermostats to the coldest point. Competition
    would lead to price reductions, innovation, and an ever greater variety
    of services — the same as we find in the computer industry.

    “What we are learning in our times is that no essential sector of
    life can be entrusted to the state. Energy is far too important to the
    very core of life to be administered by a bureaucracy that lacks the
    economic means to provide for the public. How it should be organized we
    can’t say in advance: it should be left to the markets. Whatever the
    result, you can bet the grid would not look like it does today, nor
    would its management be dependent on the whims of political

    What we need today is full, radical, complete, uncompromised
    deregulation and privatization. We need competition. That doesn’t mean
    that we need two or more companies serving every market (though that
    was common up through the 1960s). What we need is the absence of legal
    barriers to enter the market.

    Thanks, again, Dr. Reisman, for challenging us, and not pandering to the dullest and laziest among us, the way Lew Rockwell does!

    Your admiring pupil (and fellow enviro-hater),


  • Published: April 23, 2009 5:32 AM


For those who think that Dr. Reisman is being serious in his one-sided attack on enviros while ignoring the problems of ongoing rent-seeking by entrenched statist corporations, I would be pleased to refer to other posts in which he is clearly posting tongue-in-cheek and intends no rancor or imbalance.  A good example would be his light-hearted post in March 2007, Global Warming: Environmentalism’s Threat of Hell on Earth, in which Dr. Reisman appeared to seriously argue that

there is a case for considering
the possible detonation, on uninhabited land north of 70° latitude,
say, of a limited number of hydrogen bombs. … This is certainly
something that should be seriously considered by everyone who is
concerned with global warming and who also desires to preserve modern
industrial civilization and retain and increase its amenities.
there really is any possibility of global warming so great as to cause
major disturbances, this kind of solution should be studied and
perfected. Atomic testing should be resumed for the purpose of empirically testing its feasibility.

While apparently serious, how could this possibly be a libertarian, nonstatist proposal?  The answer clearly MUST be – since Dr. Reisman is a lover of freedom and markets, and not of big government, goverment-run mega projects or statist corporate rent-seeking  – that Dr. Reisman was NOT being serious.  Instead, in his usual playful manner, he was simply inviting his readers to see through his words, and to productively engage those who are concerned with climate or other commons issues, on the basis of a cool consideration of libertarian and market principles.

Inquiring minds might like to note that I have remarked on Dr. Reisman`s  productive and insightful playfulness on a number of other occasions, on top of comments on his environment-related posts,  which have been fertilizing the LVMI pages since the 2005 Earth Day.


  1. TokyoTom
    May 8th, 2009 at 09:54 | #1

    Stephan, thanks for your comment, but I`ve been preoccupied. However, it`s hard to believe that you want Dr. Reisman`s suggested testing of atom bombs in the Arctic to be taken seriously from ANY perspective, much less a libertarian one. There are obvious issues about the role of government, consent and compensation of those facing fallout risks, the problem of interfering with Arctic ecosystems and access to resources that are coming available as a result of thawing, potential releases of methane by the explosions themselves, plus small things like international treaties as crf notes.

    Are you suggesting that I`m “fulminating” about “global warming”? I`ve just been trying to steer the discussion from fulminations by Reisman (and fawning worshippers) towards actual libertarian principles and productive engagement.

    “are you aware that we are in an interglacial period … Why do this”?

    I don`t agree with your suppositions, but at least they provide a start for conversation.

    My reading indicates that climatologists agree that the Milankovich cycles are in a unique period of overlap and, given the forcings that we have already made (starting millenia ago with albedo changes/methane releases resulting from agriculture), this interglacial is expected to last for another 50,000 years, and that man`s activity is by far the largest climate forcing variable – and we`re only heading north. This involves heavy pollution and will be accompanied by other large costs to private and shared assets, including drastic changes in ocean chemistry and ecosystems.

    Mises, Yandle and others recognize that societies invested in establishing informal and formal private and communal property rights systems in order to tame tragedy of the commons problems and lead to more efficient plan formation; IMHO it`s time for us to start managing our atmosphere and oceans, instead of allowing those who profit from exploiting these resources (a wealthy class of investors and executives) to continue to do so while playing a rent-seekers` and spoilers`s game that allows them to continue to shift costs to the rest of us.

    A focus on this will also help to shift down the environmental Kuznets curve and improve the protection of private health and property in China and elsewhere.

  2. crf
    April 29th, 2009 at 03:11 | #2

    The nuclear test ban treaty makes the discussion, if you could call it that, moot.

    Thank goodness. It is ridiculous: Finland, Sweden, Canada, Russia and the United States would not support it. They wouldn’t want their northern reaches to become thermonuclear dead zones.


    ” They hate the American way of life because of its comfort and luxury, which they contemptuously dismiss as “conspicuous consumption.” And to frighten people into abandoning it, they are threatening them with a global-warming version of hell. ” – – Reisman

    This is not yet so open and explicit as to be obvious to everyone.”

    The article’s caricature of the “environmentalist”, as a religious nut with a hidden conspiracy, which Dr Reisman has keenly seen through, to destroy western civilisation, is repulsive. He doesn’t mention by name any of these horrible people who he claims wish to enslave the minds of humanity. I doubt they exist, in any meaningful number, or, if they do, have any political or social influence.

  3. Stephan Kinsella
    April 26th, 2009 at 04:25 | #3

    Tom, it’s time to drop your sarcasm and just be direct and clear. I am serious–why not investigate nuclear winter as a way to offset alleged global warming?

    As for all the fulminating against global warming… are you aware that we are in an interglacial period, probably somewhere near the middle? The earth is bound to start cooling and heading towards another ice age before long. If global warming is real, it will only delay this–which is good. In any event, suppose we impoverish ourselves to slightly decrease the warming for a few decades, until natural cooling starts anyway. Why do this.

  4. TokyoTom
    April 24th, 2009 at 11:45 | #4

    Stephan, I was just talking about the frumious bandersnatch and in walks the yabberwocky! Such coincidences are to be celebrated!

    But surely you`re not serious about open air nuke tests to combat climate change, but Reisman was, and on the LVMI main pages. His discussion was not the type of facetious one you throw out to dodge addressing it. You disappoint me.

    What the left yabbers about is worth mocking, but anyone worth his salt as a libertarian would do like Lew and spend a little time acknowledging that preferences for green power, etc. are perfectly fine, explaining that the reason for their frustration is public utility regulation that stifles competition and protects utilities, and suggesting approaches that would foster consumer goals while advancing liberty.

    But it`s so much funner to be like George, right?

    What would Ludwig von Mises have said? http://mises.org/Community/blogs/tokyotom/archive/2007/10/11/draft.aspx (quoting Reisman`s translation)

  5. TokyoTom
    April 24th, 2009 at 11:27 | #5

    Dear student of liberty, please feel free to demonstrate how it is arrogant of me to waste my time on my own blog pointing out your obvious errors.

    I`m sorry I let your own deliberate offensiveness, layered on top of your lack of understanding, trigger a snide reaction.  For that you have my apologies, even though you clearly don`t deserve them.  Oh, I`m just so lousy at winning friends and gaining influence!

  6. Stephan Kinsella
    April 24th, 2009 at 04:27 | #6

    The left yabbers about nuclear winter caused by nuclear bombs. This implies nukes can be used to cool things down. The left yabbers about global warming. Why is it unreasonable to investigate whether nuclear bombs could not be used to cool things down and offset global warming? Which one of these two contentions are you watermelons not serious about?

  7. liberty student
    April 24th, 2009 at 02:37 | #7

    TT I absolutely love how condescending and arrogant your replies are. I couldn’t cast the stereotype better than your performance.

  8. TokyoTom
    April 24th, 2009 at 02:22 | #8

    “there are even enough surplus resources to allow for you to criticize him with a Mises blog.”

    Yes, indeed; and even for befuddled students like you!

    My little blog gets about 20% of the personal aggregate traffic; why do you suppose LVMI tolerates such an obvious disruptive, fanatical participant such as me? Inquiring minds want to know!

  9. TokyoTom
    April 24th, 2009 at 02:11 | #9

    The chief reason why posts don`t show up immediately are that the spam is so bad I need to hold all comments for review (the LVMI system doesn`t include a test for spambots)l; on top of that, I live in Tokyo (and work!), so I`m not always in a position to be poring over my poring for gems like yours among the dreck.

    I appreciate your effort, but you`ve obviously failed to understand my own tongue-in-cheek post. I`m praising Lew – who troubles to actually engage people on what is wrong with the sytem as it isn – and criticizing George, who prefers to ignore entrenched statism in favor of jousting against strawmen. One is productive, while the other is simply amusing himself and pandering to those who prefer partisan and reflexive combat to thinking and honest engagement. People like you, it seems.

    Who`s a “reaching, imagining, fabricating, obsessing” enviro-fanatic, as you would have it, by the way? Under Reisman`s terms, isn`t Lew Rockwell – who dares to point out that it is the sick system of “public utility” regulation that lies at the core of the dissatifaction of those calling for “green” energy – an enviro-fanatic? I agree wholeheartedly with Lew – does that make me, or you, an enviro-fanatic?

    Just how productive are all these labels, anyway? Do you prefer to follow Reisaman in fighting Frumious Bandersnatches, or Rockwell`s actual application of libertarian principles? Think free, or adopt the Reisman Rule (TM) – your choice.

  10. liberty student
    April 23rd, 2009 at 19:47 | #10

    Is there a reason my previous comment did not appear?

  11. liberty student
    April 23rd, 2009 at 16:10 | #11

    You’re reaching. But then, the whole enviro-fanaticism is based on reaching, imagining, fabricating, obsessing…

    As far as Lew, be thankful he panders to people like me. Whatever he is doing, it seems to be working, because there are even enough surplus resources to allow for you to criticize him with a Mises blog.

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