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August 19, 2005

Don't Burn the Midnight Oil

If you wish to start strife, either in an internet forum or in real life, do the following experiment: start a conversation about oil. Oil production and consumption has long been moralized, making a rational conversation on the subject nearly impossible. The moralizing, as in most things, came from the political left. Lately, things have been changing; now the moralizing often comes from the political right, especially anti-Jihad warriors. Listen to Jihad Watch Vice President Hugh Fitzgerald:

Here are some basic principles for that policy of containing Islam: [...]

2) Recognition that the oil wealth that has provided Arab and Muslim OPEC members with nearly $10 trillion in undeserved revenues since 1973 is what finances the world-wide Jihad. It pays for weapons. It pays for weapons projects. It pays for mosques, for madrasas, for propaganda. It pays for the vast army of hirelings, all over the Western world, who have for too long been allowed to make propaganda for the Saudis and others -- hard propaganda, and soft. These include ex-diplomats, ex-intelligence agents, journalists and producers of sham books, academics (who may benefit from Arab and Muslim money in their very own "Muslim-Christian Centers" or simply from a nice King Abdul Aziz Chair in thisandthat), and of course businessmen eager for contracts. Think of how, during the debate over whether to sell AWACS to Saudi Arabia back in 1980-81, all sorts of American corporations doing business there, from United Technologies to Whitney, rushed to paint Saudi Arabia as a true-blue friend of the West --when it was then, just as much as it is now, a place full of anti-Infidel venom, taught from the earliest schooldays, and infecting every part of Saudi life. A few remarkable people manage to fight their way out of this nonsense, but only a very few -- and policy for and by Infidels cannot be made on the basis of an exceptional and nearly imperceptible handful.

Every attempt must be made to diminish Saudi and other Muslim oil-state revenues. Every other kind of energy source must be encouraged and subsidized. In wartime, one does not rely on the free market to produce a Manhattan Project, or for a bunch of entrepreneurs to set up shop at Los Alamos. The government enters the picture. The government should enter this picture, and devote a few hundred billion dollars -- the sums now being squandered, or contemplated being squandered, on keeping Iraq together.

Mr. Fitzgerald has written an excellent argument for reducing Saudi Arabia’s and the rest of the "Arab World’s" wealth: it is true that money has financed the Jihad. It is true that it has helped corrupt several of our institutions, it is all true. I'm quoting his argument, not because it is particularly weak, but because it is particularly strong. But I must part ways with him when he writes "every attempt should be made." No, every attempt should not be made. We should not wage a sacred war against oil. We should instead ask the following questions:

a) What's the benefit?

b) At what cost?

c) What are the alternatives?

At first look, it seems silly to ask "what's the benefit?" The benefit appears straightforward: a reduction in wealth of oil-producing States, including the Muslim States that finance Jihad. That is the stated benefit. A crucial question is left unstated; what reduction can we reasonably expect? And that, is not a question of moralizing, but of economics. We can expect a benefit–again, a reduction in profits for the Muslim States–directly proportional to the price of the new source or sources of energy. That is, if find a very cheap source of energy, we can expect a large benefit, if we find a source of energy that is comparably to the price of oil, a very slight benefit, if we find a source of energy more expensive than oil, then we haven’t done much. In that context, calling for a "Manhattan Project" is misguided. The Manhattan Project was a massive engineering project. What we need is an economic solution. Those are harder to come by.

Let us move to the least considered question in discussions of public policy: at what cost can we expect the benefit? Fitzgerald speculates "hundreds of millions of dollars." But that's all that is, speculation. There are also costs that are not usually seen when discussions of this kind get started. For example, a popular "solution" involves reducing oil consumption in the United States by government fiat, usually by making it harder for people to buy trucks and SUV's. All fine and good, except that would damage skilled workers and farmers who need them, and would make it harder for people to have large families. (And we already have a scary demographic problem.) I even heard a leftist dreamer on TV asking for the introduction of bicycling, which would reduce the productivity of American workers. (By making it nearly impossible to hold more than one job when they need to, or by reducing the distance from where they can accept a job.) The dreamer was asking for poverty.

This does not mean we should hunker down and hope for the best. (Although that should be part of our strategy.) There are alternatives out there we should be pursuing. Among these:

* Hunker down and hope for the best: Well, not exactly. I mean, let the free market do its thing. It is emotionally painful to not do something as politicians are fond of saying. But as Thomas Sowell writes

Some ideas seem so plausible that they can fail nine times in a row and still be believed the tenth time. Other ideas seem so implausible that they can succeed nine times in a row and still not be believed the tenth time. Government controls in the economy are among the first kinds of ideas and the operation of a free market is among the second kinds of ideas.

Let individuals make their own buying decisions, let "greedy corporations" invest in research and development. We are going to be fine.

* Open up drilling across the United States: Not only in the Arctic National Wildlife Refuge, but along the Florida Coast as well. Let's get our priorities straight on this issue.

* Allow nuclear plants to be built: That is an energy source that is already competitive, and we are not exploiting. Again, let's get our priorities straight.

* Repeal laws that create driving: I'm thinking specifically about "open space" laws, and other ordinances that make it hard to afford housing near major cities. (If people could afford housing in cities, they wouldn't drive two hours each way to their jobs, as it happens now.)

* Stop the government monopoly in so-called Public Transportation: People don't use public transportation because the cheap option (buses, trains) is usually inconvenient and the convenient option (taxis) is always expensive. End that, and new, economic services will be built.

Finally, let me be clear once again: the oil money that flows to Muslim countries is a problem. But that is not a reason to throw reason out of the discussion. There are serious, perhaps prohibitive costs in the radical solutions being advanced to solve this problem. We should concentrate instead on gradual, more fruitful ways of alleviating the problem.

And let's not forget, there are other ways of fighting Islam.

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Posted by Ruy Diaz at August 19, 2005 5:33 PM

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