Just because you have it doesn't mean you know how to use it correctly

How I responded to the petition woman's declaration that 'the people have power'

By —— Bio and Archives--March 12, 2018

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How I responded to the petition woman's declaration that 'the people have power'
Here in downtown Royal Oak, we see the petition people a lot. They’re always trying to gather signatures for something. Equal pay. Redistricting reform. Forced unionization. Marijuana legalization (that one never goes too well). You name it, they’re standing outside your coffee shop or post office gathering signatures for it. It sort of reminds me of grade school, when we would decide to take up a petition to get green beans off the cafeteria menu.

Come to think of it, that never worked either. I don’t think Sister Patricia Marie cared what we wanted to eat. (Then again, that Friday pizza was awesome.)


So the other day it was the renewable energy people. They got me coming out of the library, and wanted me to sign a petition to mandate that 30 percent of the state’s energy come from renewable resources like wind and solar by a date specific. I declined to sign, explaining that I thought that was the sort of thing that should be determined by markets.

Undeterred, the signature gatherer responded, “The people have power!”

This one exchange, I think, encapsulates very nicely the distinction between conservatives and liberals on most things.

I have no problem at all with any form of energy that works. If wind and solar can add more power to the grid, heck yeah, let’s have it. The question is how, why and under what circumstances that would actually happen. The reason wind and solar aren’t bigger portions of the grid right now is that neither the technology nor the economics have matured to the point where they can produce that much.

Fossil fuels, coal and nuclear all perform better because they use mature technology and the infrastructure to produce and deliver them has been perfected. And it’s not just a matter of developing the technology and the infrastructure for wind and solar. It’s also a matter of no one even being sure how to do it to make the numbers work. Wind only produces when it’s windy. Solar only produces when it’s sunny. The machines you need to harness both are so expensive to build and maintain that it leaves almost no profit margin.

So back to “the people have power.” My signature-gathering friend seems to think that we would have all the renewable energy we want if only “the people” exercised their power and mandated that it happen. The recalcitrant energy companies and utilities would stop dragging their feet and get those windmills turning and solar panels gleaming, because the people exercised their power.

But making a law that says something has to happen doesn’t actually make the thing happen if it isn’t yet possible. If renewable energy companies could produce energy today, and sell it to the grid at a price that would allow the utilities to turn around and sell it to the public affordably, you’d better believe the utilities would be buying it. No one would have to pass a law to force them.

But for all the reasons discussed above, they can’t, which is why they’re not.

Now, the liberal would say this is exactly why we need to mandate it, because without the mandate they won’t invest in the technology that will make it possible. Give them no choice, says the liberal, and they’ll figure it out. But that assumes several things that are not backed up by facts.

First, it assumes that research and development always succeeds as long as someone decides to put the money and time into it. That is not true. Research and development is a hit-and-miss proposition. Companies know they need to do R&D in order to grow, but they also know they have no guarantee of a return on that investment. So they have to be very careful about how they invest their R&D dollars, and on what initiatives. No one on the outside can tell them a) you must solve Problem X; and b) you must solve it by this date.

You can’t mandate the solution to a problem if you yourself have no idea what the solution might be, or if there even is one.

Second, it assumes that the energy industry wouldn’t be interested in renewables unless they were forced to be interested. That’s not true. If it’s a market opportunity, they’re interested. Companies pursue new ventures based on their technological and economic viability. If they’re not going balls-to-the-wall on it right now, it’s because those issues are murky and they don’t want to throw money at it with no clear picture of how they earn a reward for doing so.

Third, companies respond to demand from markets. Real demand doesn’t come from petition signatures. It comes from customers who express their buying preferences. If large numbers of people were demanding that their power come from renewable sources, you’d see more urgency from the energy sector. But they’re not. They just want power that’s reliable and affordable. The average person really doesn’t care that much about the source.

So let’s deal with this declaration that “the people have power.” Yes they do. But the people need to wield their power in effective and responsible ways, and that by no means always involves wielding it through politics. Passing a law mandating something that simply can’t happen isn’t wielding your power wisely. It’s wasting it. You feel like you did something, but you really just complicated the process of getting to what you’d ultimately like to see. If the people want power from renewable energy, then they can make that known by demanding it within the market, even expressing their willingness to pay a premium for it. But right now, at a market level, people are not expressing that demand and are not indicating their willingness to pay a premium.

That’s one of the reasons we don’t have it yet.

The bottom line: I agree with my liberal petition-circulating friend that the people have power. Where we disagree is that she thinks the people must necessarily exercise their power through politics. I think there are many ways the people can exercise their power, and in most cases markets provide a more powerful mechanism. The problem is that too many people don’t understand how to exercise power through markets, in large part because they’ve spent their lives being influenced by teachers, journalists and petition-circulators who also think the only kind of power that really matters is the power of government.

I wished her a nice day. I hope she realizes she has the power to make that wish come true entirely on her own.


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Dan Calabrese -- Bio and Archives | Comments

Dan Calabrese’s column is distributed by HermanCain.com, which can be found at HermanCain

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