The rule is that government control and regulation does little or nothing to solve the real problems at work, and in fact can have the opposite effect and undermine acceptable (or what society deems to be acceptable) levels of public good.
The example I've been using for years has been Marijuana. Since anti-marijuana laws have become stricter, demand has not abated at all. That much is common knowledge. But on top of that, the process of punishing marijuana use and cultivation - based primarily on weight - has had the perverse effect of focusing gardeners' minds on concentrating the potency of pot into smaller and smaller plants. The result is that today's pot is orders of magnitude stronger than the stuff Cheech and Chong used to smoke in their movies. A good old fashioned doobie filled with modern day kush from Humboldt county could literally last some people a year.
This has been the gardeners' collective response to (extreme) government control of their product. Now, a non-prosecutable amount of pot could still take care of all your smoking needs for at least a week- thus making skirting the laws effectively an ordinary experience for most users. The government plan to control or (ridiculously) cease, marijuana usage has backfired, and the only "good" to come to society is increased wealth extraction by government for the sake of enforcement, incarceration, and prosecution of drug offenses.* But in general, the government actions have made pot more popular, more potent, and now completely ubiquitous. Exactly the opposite of what the laws supposedly intended.
But you probably knew all that.
The new example I've discovered, which has been sitting right under my nose, is Oil:
Years of regulation and innovation have made us better at finding, extracting, refining, and using oil. Oil might be cheap compared to its true costs, but adding those costs in wouldn’t make it unaffordable. That gets to the bigger issue, which is that energy sources are only cheap or expensive relative to one another. And the anchor beneath our reliance on oil is that, at this point, there’s nothing to replace it. (emphasis mine)
It had never occurred to me before that the massive regulations of the oil market could have had similar effects in focusing the minds of oil execs to maximize extraction techniques and minimize price- just as the pot growers do (although, due to prohibition, the pot growers have some more latitude in not reducing price). If necessity is the mother of invention, being under continual duress for a product that enjoys unlimited demand will certainly create many leaps of genius to keep the supply lines running.
Many bytes have been spilled in recent weeks, paralleling the BP oil leak, reminding us that it was government regulation that forced BP to drill so far out into the ocean in the first place. And by and large, the oil companies have done a stellar job at safely extracting petroleum in extremely difficult environments. We have to assume that the technological innovation that helped them to do that led to cost benefits across the board.
In other words, the better they had to get at extracting oil (because of government controls), the better they got at extracting oil. And the better they got at extracting oil, the cheaper the oil would be per "unit." Just as you get more bang for your buck with modern pot, modern oil extraction techniques give oil companies better access to more oil.
One can imagine a parallel history in which pot growers and oil producers were left alone for the past 40 years. Their methods of cultivation would be much sloppier and less efficient. And while we believe there may have been more societal ills along the way, in the case of oil, it seems possible that a well guided alternative would have taken hold much more easily. The investment and the government-engendered technological innovation in the oil sector has created an industrial force that is extremely competitive. The same companies in the 70s were not nearly as fierce, and it is possible that they could have been more easily competed away today without the steroids they were forced to take to keep up with government regulations.
(One could also imagine a parallel history of relatively weak cannabis that had only a mildly disturbing effect on society over the past 40 years. For the general public to learn how to safely deal with the new super-strains will likely involve a steeper learning curve with more potential for disorientation and danger as we move towards a prohibition-free society. Should there be enough cases of pot-induced trauma in a hypothetically de-prohibited culture, we may even find a more virulent backlash from the government to re-schedule the substance, thus tightening the curve of innovation further.)
Some interesting things to think about as we ponder the oil spill just as "peak driving season" is about to begin. . .
*and if you're black you might add serving the cause of continuing 1950s segregation by other methods, namely incarceration.
No comments:
Post a Comment