[This exploration into the theory of regulation was inspired by the role of the mixed economy in the rise and fall of Enron. The analysis applies to many current issues, such as the negative environmental effects of the supply/demand for used batteries, the lead story in today’s New York Times.] 

Political economists have long recognized the challenge of getting regulation right in a mixed economy.

“A scheme of state interference for the attainment of some social or economic benefit,” stated Hubert Smith back in 1887, “will in general succeed or fail according as it is able or unable to cause a change in the nature, habits, and disposition of those whom it affects.”

A century later, regulatory economist Sanford Ikeda reached a like conclusion:

Interventionism is really a process of entrepreneurial adjustments in both the private and public sectors, where these adjustments tend to be both unanticipated and undesirable (from the viewpoint of the interveners) owing to radical ignorance, complexity, and dispersed information.

Michael Mann: “I gave up on Judith Curry a while ago. I don’t know what she thinks she’s doing, but it’s not helping the cause.”

Phil Jones: “I’ve been told that IPCC is above national FOI Acts. One way to cover yourself and all those working in AR5 would be to delete all emails at the end of the process.”

The above emails are representative of the sickly fare of a group of physical scientists who set out to change the world from one of open-ended economic growth to one of economic constraint via international carbon planning. The good news is that the Intergovernmental Panel on Climate Change (IPCC) gatekeepers have once again been exposed by the e-mail release of last week, now known the world over as Climategate 2.0.…

“It’s time to move the debate past the dogmatic view that carbon dioxide is evil and toward a world view that accepts the need for energy that is cheap, abundant and reliable.”

– Robert Bryce, “Five Truths About Climate Change,” Wall Street Journal, October 6, 2011.

“Every [energy] policy objective should be viewed through the lens of affordability.”

– John S. Watson, Chairman and CEO, Chevron Corporation
Remarks at the Peterson Institute for International Economics, Washington, D.C., October 19, 2011.

Chevron CEO John Watson delivered a major address last month in Washington, D.C. that reorients energy sustainability from controversial neo-Malthusian notions toward consumer affordability and reliability. As such, it marks an end to the ‘apologetic’ era launched by BP’s John Browne in his 1997 Stanford University speech, which proclaimed that fossil fuels were problematic in relation to anthropogenic climate change.…

The first of two rebuttal phases of the ECONOMIST’s online debate on renewable energy is up. My opening statement focused on energy density by resurrecting the timeless wisdom of William Stanley Jevons. My rebuttal below (against Matthias Fripp of Oxford University) expands the energy density argument to stress that environmentalists must reconsider (not assume) climate alarmism to stop the assault of government-enabled renewables on the environment.

With growing grassroot opposition against industrial wind parks, the supply-side strategy of forced energy transformation is in real trouble. Wind power is not much of a supply source, which raises the question about why anti-fossil-fuel types have not embraced nuclear power.

To play devil’s advocate, is the real strategy of anti-industrialists to purposefully restrict supply to force conservation via high prices? Is the real enemy cheap energy itself?…