Comments for Energy independence at http://www.adamsmith.org , comment 1 to 8 out of 8 comments http://www.adamsmith.org Thu, 08 Jan 2009 17:39:09 +0100 FeedCreator 1.7.3 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-894 Current (strange name), You make some valid points in paragraph 2 but although trade interdependence does, indeed, help achieve a sort of 'peacemaking stalemate', it does not follow that just because a country has vast oil or gas wealth, it means that they will necessarily be dependent on "the rest of the world for other goods". The Middle East is, indeed a classic example of a petro-economy but it does not produce much else because it is politically unstable and lacks the resources to produce much else. Who was it that welcomed the day we no longer needed their oil as that would be the day the Middle East returned to the sand? It may well be that Russia imports a lot but as it is China and the East that produces most consumer products, it is entirely feasible that Russia will keep the East on side whilst screwing the West. And wealthy states that are also intelligent use their wealth to build up their domestic economies. The problem with your argument is not that it is entirely wrong, because in principle it is right, but that it does not allow for political and economic realities. The fact remains that there is an imbalance in the balance of power when it comes to energy. At the moment, we need Eastern energy more than they need our markets, and as they get richer, they will develop their own trade alliances, leaving us in the cold. We need to wise up. Global market economics should remain an objective but it must be tempered by intelligent analysis of Global politics. As Professor Niall Ferguson said: 'the story of the 20th Century was not one of Western triumph but Eastern resurgence and the decline of the West', or words to that effect. - Arthur Mon, 01 Sep 2008 14:23:37 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-890 I'm quite sure that Mr. Worstall also understands how government can distort a market. That's the situation here in the U.S. We can produce more energy over here very efficiently -- silly environmental hysteria (and millions of dollars in environmental campaign contributions) has prevented that. If energy "independence" is the fig leaf that allows the left to row back on their no-drilling pledge, then I'm happy to sign on. - Craig Sat, 30 Aug 2008 22:56:26 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-889 Tim Your question about subsidising prune production to cut imports of bananas is discussed, hypothetically, in a piece I quote on Lost legaacy: Matthew Hisrich writes in Pal-item.com: ‘From bananas and prunes, lessons for an election year’ (30 August) Of course, it's nonsense. It's what politicians do. Including using trade sanctions as a weapon of pressure. - Gavin Kennedy Sat, 30 Aug 2008 21:41:02 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-887 Arthur, I think the political situation backs up Tim's comments. If things continue as they are then due to their oil wealth the middle east and Russia will remain dependent on the rest of the world for other goods. They are currently huge importers of almost everything except petroleum products. They may be able to control oil supplies, the rest of the world can control those imports though. If they target the rest of the world economically, or politically then the rest can retaliate. So we have peacemaking stalemate. If the "oil independence" push is successful then those countries must become more self-sufficient themselves. This will mean they will be no longer any stalemate. The middle eastern countries that would dearly love to support anti-american terrorism will be able to freely do so, it will not longer be the murder of customers. Read Ludvig Von Mises on The Economic causes of War http://mises.org/story/2949 - Current Sat, 30 Aug 2008 17:23:31 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-886 First ,I agree with the points made above by Arthur. Second, I can remember other US politicians saying the 'energy independence' mantra - "not one further barrel of oil" etc - back in the 1970s during the aftermath of the 1973 Middle East War - so these words are not exactly new. - Steve Giess Sat, 30 Aug 2008 14:40:04 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-885 Well said Mr Worstall. (Is it sad that I got excited over this post?! Also is it wrong to chuckle at the irony of so called 'progessives' actually being luddites?) - Vindico Sat, 30 Aug 2008 14:35:58 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-884 Of course, you are right about economics: trade increases wealth. But you are not so right about politics. People do strange things and if some reports are to be believed then Russia is embarking on a policy of extending international power through the control of their energy resources. What is the point of one country playing by free market rules when the other country does not? I love the ASI but nearly every post crowds out all other factors except those found in the economics text books. The world is a little more complex than that. The question is simple. If a country is entirely dependent on another country for an essential resource then what does that country do if the supplying country distorts the market by using that resource as a tool of power politics? In an ideal world it might be desirable to adopt complete free market economics but in a real world this is just naive. - Arthur Sat, 30 Aug 2008 13:28:46 +0100 http://www.adamsmith.org/blog/economics/energy-independence-200808301975/#comment-883 I could be wrong, but I think the thing is this; firstly, they don't realise intellectually the folly of what they're doing, secondly, they place a value on energy security given the issues which seem to arise from it - petrol costs, oil issues in the Middle East, etc. When you can't see the folly of it and you can see advantages, then it makes sense. The other issue is the behaviour of the Governer for suggesting this. Either he doesn't understand economics, in which case he is not qualified for his position, or he does but he's saying this anyway to be popular, in which case he should not be in his position. - Toby Sat, 30 Aug 2008 13:02:01 +0100