Sunday, March 17, 2013

Benjamin Franklin was right

When representing American commercial interests in London during the 1760s, various English politicians and merchants approached Franklin to ask him how they could more effectively tax the colonial sugar/molasses and rum trade.  Franklin would chuckle and explain to them that what they were asking was essentially impossible, because every penny they succeeded in extracting in taxes from American shippers, merchants, and distillers would be taken back from them in the form of higher prices charged to English buyers.

Franklin's logic is apropos to the concept of taxation removing surplus energy from a system.  (I first encountered this concept in the work on Manuel de Landa, but I do not know if it is original to him or not.)  Essentially, if a large non-linear system (like the Atlantic trade in the 18th century) is producing a large enough energy surplus (which means that the level of profit is such that it does not distort the system's balance), governments can successfully "bleed off" some of that energy via taxation.

Franklin was effectively arguing that the colonial/imperial trade in slave, molasses, and rum only generated enough surplus energy to support the one-cent-per-barrel "tax" that Americans were willing to pay in bribes to avoid British customs agents, but not enough to pay the three-cents-per-barrel tax the British wanted to collect.

This is a pretty good analogy to the push for "green energy" in the United States, because we far too often fail to acknowledge that we exist in a global economy, and that changes we make are then reflected (often in counter-intuitive ways) in the rest of the world.

Case in point:  as the push toward "clean" or "green" energy reduces US consumption of coal, guess what's happening?  Rather than roll over and die as our progressive friends no doubt expected, the coal companies have simply found new markets:

Ready for some good news about the environment? Emissions of carbon dioxide in the United States are declining. But don't celebrate just yet. A major side effect of that cleaner air in the U.S. has been the further darkening of skies over Europe and Asia. 
The United States essentially is exporting a share of its greenhouse gas emissions in the form of coal, data show. If the trend continues, the dramatic changes in energy use in the United States—in particular, the switch from coal to newly abundant natural gas for generating electricity—will have only a modest impact on global warming, observers warn. The Earth's atmosphere will continue to absorb heat-trapping CO2, with a similar contribution from U.S. coal. It will simply be burned overseas instead of at home. 
"Switching from coal to gas only saves carbon if the coal stays in the ground," said John Broderick, lead author of a study on the issue by the Tyndall Center for Climate Change Research at England's Manchester University.
Read the whole thing and discover an important truth:  predictable cause-and-effect does not work in the top-down management of non-linear systems.

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