By Bret Swanson
The purpose of technology is to do more with less. However, the current crises unfolding around the world are the result of policies that insist that we do less with more.
Tens of thousands of farmers in the Netherlands and Germany are blocking roads in protest against the government’s planned drastic reductions in nitrogen oxide, ammonia and livestock, aimed at meeting the targets for of climate change. The Dutch minister in charge said the rules could wipe out a third of the country’s 50,000 farms in the coming years, which is the goal. There is a revolution in Sri Lanka, where the government’s 10-year plan to switch to 100% “organic” agriculture has led to economic and social collapse in just two years. Import bans on fertilizers and pesticides, among other restrictions, have devastated the production of rice and tea, its main exports.
Europe’s energy disaster is the direct result of its two-decade quest to shut down technologies that work (natural gas and nuclear) and subsidize technologies that don’t (wind and solar). Germany is now accelerating an emergency coal ramp-up while moving away from nuclear power, showing that the green movement is much more committed to expensive anti-trade energy sources than cutting emissions .
The United States, meanwhile, is doing its best to undermine the high-tech fracking revolution with pipeline blockades and a series of environmental, social and governance (ESG) disincentives. Reuters reports that new Environmental Protection Agency rules could shut down several large liquefied natural gas (LNG) export terminals in Texas and Louisiana. Doomberg Energy Analysts (a finance-focused sub-stack) estimate that “could eliminate half of the total LNG export capacity in the United States” and that we could “expect the price of natural gas in the United States to collapse and prices in Europe/Asia reaching unthinkable heights”.
If inflation is too much money for too few goods, our current situation is a perfect distillation. COVID-19 lockdowns have prevented hundreds of millions of people around the world from working and going to school. Governments pumped and printed trillions of dollars to “replace” this lost production. The Keynesian equivalence says that the production of companies and the printing of public money are interchangeable.
Inflation, dislocation and geopolitical chaos, however, show that the two are not the same. During the shutdowns, industries closed. Supply chains have broken down. Misguided vaccination mandates have led to untold layoffs and resignations, diminishing the workforce by hundreds of thousands. (Some knowledge industries and workers have thrived during COVID-19, but only because over the previous two decades the United States encouraged $2 trillion in private investment in broadband Internet infrastructure. tape.) The benefits of the lockdowns were nil, but the negative health and economic consequences were massive and helped trigger today’s recurring crises.
Beyond their devastating substance, these COVID-19 policies advanced the broader notion that we can shut down production, shut down trade networks, and replace them with “money” – so we can do less with more. Not so.
For most of the 20th century, top-down control of the economy was justified in the name of socialism, based on the supposed goal of more equal outcomes. Today, top-down policies are justified in the name of fighting climate change, pandemics, and violations of woke ideology. Whatever the justification, these policies shift resources and power to the undeserving few and decimate the productive and creative engines of the broader economy, hurting the middle and working classes the most.
We need a new commitment to tech-driven entrepreneurship and construction. The path to widespread prosperity is to embrace productive technologies and labor and stop subsidizing technologies and people who don’t.