After reading Hot, Flat, and Crowded by Thomas Friedman, I have to say that what the United States really needs is not the prescriptions of Thomas Friedman, but a big dose of Milton Friedman!
With my dig out of the way, I have to go on to say that I consider Thomas Friedman must reading. The World is Flat and the Lexus & the Olive tree were both great reads, and Hot Flat and Crowded is just as interesting. While I ended up disagreeing with his conclusions, the reading is certainly fascinating and a great addition to the conversation on the environment.
The most interesting discussion in the book was about the correlation between freedom in the world and the price of oil at any given time. Studies have shown that when a worldwide “freedom index” (an amalgamation of different factors including free elections and other characteristics of free societies) is compared to the prevailing price of oil, a surprising correlation of less freedom comes with a higher price of oil. Basically, it works like this. The higher the price of oil, the more money Petro-dictators have to give away free goodies (in the form of social subsides) to their people. Then in turn, the higher level of goodies, the lower social unrest in these countries. Unfortunately, in return for higher standard of living/handouts, those same people are willing to live with reduced freedom. Or at the very least, it’s harder to get an opposition movement going.
The reverse is true as well. The lower the price of oil, the harder it is for Petro-dictators like you’ll find in Venezuela, Saudi Arabia, Iran, Iraq, and Russia to hold onto their tyranny. Friedman claims this is one of his main points when speaking in front of conservative groups who might be less interested in his global warming message. I have to say, the value of low-priced oil for national security reasons is compelling on its own. I just differ on how to get there (drill here, drill now!)
That discussion is worth the cost of the book on it’s own. Friedman than goes on to discuss several other aspects of the battle against global warming. If there is a flaw in the book, it’s Friedman’s total hook, line, and sinker buy-in to man-made global warming. Assumption after assumption is presented as fact, and if you don’t agree that it’s irrefutable facts you’re a “naysayer.” In the end it doesn’t matter. Even a naysayer like me sees the great benefits to a green revolution (“you had me at national security”).
My real point of contention with Friedman is his gas tax. He rightly observes that high oil prices represent a price signal makes a market for alternative energy. He’s also right that the unpredictable price volatility prevents true private sector investment in alternative energies (why would I put 100 million into wind-farms technology when oil might be a dollar cheaper six months from now – as it’s turned out to be).
It is the kind of conundrum that argues for some type of government intervention. Even a laissez-faire kind of guy like me can almost get over that (almost). Friedman’s solution is to tax you more. He’d like to put a floor on the price of a gallon of gas – still allowing shifting in the price, but any savings below a certain floor determine the amount of the tax (e.g. If the “real” price of gas is $2.50 and the floor is set at $3.00, Uncle Sam nets fifty cents). His goal is to set the price high enough and stable enough to foster investment in alternative energy sources.
It would be one discussion if this new consumption tax was offset with a reduction in other taxes such as income, but Friedman basically chalks it up to “hey, extra revenue for the government!” The real problem in my mind is the distortion of the market. “Price” is the most important piece of information for effective free markets, and price controls always corrupt the outcome. Because of that I just cannot get on board, as seductive as it might sound.
The real solution is in the passage on moon shot versus “1,000 garages.” The question he’s looking at is about whether this effort is a massive “moon shot” effort that needs an enormous centralized government solution, or whether it instead will get solved by the thousands of inventors and entrepreneurs out there. It seems to me that rather than mucking up a perfectly good free market system (bounded by law/contracts), why not sponsor the equivalent of the Ansari X Prize? Heck, we’re talking government here…even if you made the prize “one BILLLION dollars,” it would still be cheaper for American tax payer.
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