The Skunk at the Rent-Seekers’ Party
The March 26 edition of The Wall Street Journal has a special section titled “Environment” presenting excerpts and features from the Journal’s latest ECO:nomics conference. While the opening essay by John Bussey [subscription required] tells us the green bubble has burst, the rest of the section presents the usual pleas for more subsidies and regulations from the Baptists and bootleggers of the renewable energy movement.
According to Bussey’s opening essay, the annual ECO:nomics conference brings together “top entrepreneurs, thinkers, companies, investors, and environmentalists who define the intersection of business and the environment.” That’s only partly true. He left out the part about the “top entrepreneurs” being those who are most successful at winning government subsidies or benefiting from regulations that handicap their competitors.
The “top … thinkers” at ECO:nomics are only those who unquestioningly embrace the latest myths and hype from the environmental movement. Most corporate CEOs at the conference are just trying to paint themselves and their firms a fashionable shade of green to please the liberals in their public relations departments. And the environmentalists who show up are of the liberal/Democrat/alarmist stripe and rarely or never of the free-market variety.
Many years ago, economist Bruce Yandle (himself a pioneer of free-market environmentalism) coined the phrase “Baptists and bootleggers” to describe the unholy alliance of true-believers in an apparently noble cause and those out to make a buck off the laws and programs adopted in the cause’s name. The classic example is the Baptists’ campaign to ban alcohol and the huge profits delivered to bootleggers during Prohibition and later in “dry” counties and cities. Today, the best example of Baptists and bootleggers is the partnership between radical environmentalists trying to ban fossil fuels and the renewable energy industry eager to sell its over-priced, intermittent, and unreliable products.
Nowadays economists refer to bootleggers as “rent-seekers,” defined as individuals or parties who profit off rules and regulations that limit competition and consumer choice. And instead of referring to true believers as Baptists, who after all may be entirely right in their religious beliefs, we might follow the example provided by the Soviet Union’s KGB and call the true believers “useful idiots.”
Anyway, once a year The Wall Street Journal hosts a garden party for the useful idiots and rent seekers and then prints a series of puff pieces about the folks who attend. It isn’t good journalism or even entertainment, more like a very boring People Magazine feature about the speeches delivered at a PETA fundraising event in Beverly Hills. This year’s edition generated full-page ads from Shell Oil and FedEx and a few smaller ads, which one assumes is the main measurable output of the endeavor.
This year’s write-up, though, reported a skunk at the party. Bussey’s brief opening article contains these marvelous lines:
“Large parts of green-tech investment look like the torched and salted fields left behind by Roman conquerors; barren, lifeless – and bereft of a return on capital. Put another way: In some areas, if you aren’t already investor road kill, you’re likely the hedgehog in the headlights about to join your maker.”
After saying not all is lost, he returns to the story about the skunk:
“But it was undeniable that waning investment in the green side of the energy spectrum was the other dominant theme. A range of factors have [sic] scared off capital: poor returns on existing investments; the failure of big solar efforts like Solyndra; shrinking government budgets; the impact of state-subsidized Chinese competitors; and indeed, the advance of cleaner shale gas, which has undercut momentum toward some alternative energy sources.”
It’s a nice list, but he might have added that 16 years without any global warming, the collapse of foreign carbon trading markets, the Climategate 3.0 and Fakegate scandals, the rise of “energy poverty” as a major political issue in Europe, and growing skepticism about the ability of scientists to predict future climate conditions all have damaged the standing of the useful idiots at the conference, causing rent seekers to look for other targets to whom to attach themselves.
Might this be the last ECO:nomics event? One can only hope so. But human nature being what it is, another event will quickly take its place. The Wall Street Journal’s advertising department is surely making plans for the next big thing. A suggestion: How about something to do with investing in real businesses producing viable products?
[First published at Somewhat Reasonable.]