Sunday, October 14, 2007
The other day I was playing cards with a guy who sells security systems for a living. For $1500 or some other amount of money you could buy something with motion detectors, window sensors, passive notifications to police, etc. I mention this not because this business is in any way extraordinary but actually because it isn't. A producer offers some sort of product or service and the consumer decides if he wants it or not.
This is the way most business works, but there are exceptions and energy production is one (health care is another). In the modern bourgeois world, the consumer must purchase energy from those who have it to sell, and both parties know it. And this reality has very important psychological consequences. The equality between the producer and consumer is disturbed. The consumer (that is, you and me) has lost the ability to say no to the oilman or the power company and therefore feels in some unspoken way subservient and inferior. And frankly, we don't like it very much.
Most of us, most of the time, don't carry a thief mentality. If we want a bedroom set, or a blender, or a big screen TV, we understand that those things cost money and we have internalized that we have to pay whatever that cost is. But in a weird twist, energy is so valuable that we expect to get it for free. That isn't as strange as it sounds. As the cliche has it, the best things in life are free. The love of our families, the ability to enjoy yourself whereever you stand, friends who will cut you a little slack when you screw up, these things are priceless and free at the same time. But energy is not one of these things. The factors that produce energy are the same ones that produce a blender: rent on land, labor, industrial organization, return on capital, raw materials, etc. Simply put, all those factors must be compensated or else the end product goes away.
From here, the bourgeois energy consumer demonstrates a special case of what the psychologists call projection. We don't want to come to grips with the high cost of energy and our vulnerability to its scarcity. Instead, we try to take it out on the energy companies. They are routinely demonized for environmental insensitivity, price gouging, global warming, etc. No doubt some people really believe energy companies are really guilty of these things, but nonetheless the whole thing has an air of ritual theater. Oil company CEOs can be hauled before Congress and be made to grovel and power companies will make television ads extolling their environmental virtue. But the oil and power companies are going to get paid anyway. Recall, the factors of production must be compensated or the end product goes away, and we as bourgeois consumers will not accept the loss of our access to energy.
But even though oil companies still make money, the consumer's projection of energy production as "dirty" still has very important consequences. Mostly, we try to get by with as little energy production as we possibly can. Right now, some of the world's biggest problems (Iraq, "peak oil", etc) have roots in our unwillingness to compensate energy production just as we would any other business.