Industrial Policy Is Just Another Anti-Progress Variation Of Tariffs

Interior secretary Doug Burgum deters progress when he halts wind projects in New York, all the while requiring review of all wind project permits issued during the Biden administration. The previous comment isn’t the championing of wind power, but it is a comment that industrial policy is most harmful for freezing the present in place. Industrial policy is anti-progress sister of tariffs.

To understand why, it will be said up front what’s hard to deny, that oil is presently the most crucial commodity in the world. Without it, life as we know it would become incredibly primitive in an instant on the way to unrelenting drudgery.

To say that oil and its byproducts power us around by train, car and plane goes without saying, at which point it’s easily forgotten how much automation of nearly all aspects of production has been driven by oil, not to mention all the produced products in which oil and its byproducts are yet again a driving force. We quite simply can’t do without oil right now.

Just the same, it’s too easily forgotten that “now” in the world of a commerce is a look into the past. Oil looms large here. How soon we forget that less than two centuries ago no one demanded the extraction of the crude that was bubbling up before our eyes around the world. In other words, what was visible to so much of the world was hiding in plain sight as the most transformative, economy and life-enhancing commodity the world has ever known. The simple truth is that oil’s genius as a driver of progress had to be discovered.

As the great George Gilder reminds us repeatedly, wealth is knowledge. And massive amounts of wealth were created in concert with the discovery of oil’s endless uses as an industrial commodity. Still, it wasn’t always a known. Wind power is no different. There’s the known and unknown with it.

We have a sense of what it can do, but we don’t really know yet. Which isn’t a call for government subsidization of wind power. Governments are by their very name constrained by the known, or what they think should be known, while market actors are in the process of discovering what’s not evident. Much as oil once sat cruelly unused, it’s possible that wind and all manner of other existing or would-be energy forms hide in plain sight.

It brings us back to the Trump administration. What bills itself as free market is doing markets a disservice with industrial policy meant to pick the energy winners of today and tomorrow. The reality is that tomorrow is an unknown exactly because the U.S. is full of industrious individuals searching for intrepid investors eager to back the impossible that will make the energy present appear primitive relative to what will be.

Will the energy future be defined by wind in the way that oil defines the present now? There’s no way of knowing the previous question anymore than it was possible to know in the late 19^th century if oil would be the progress story of the 20^th century, and beyond. And if anyone doubts the previous assertion, they need only contemplate the immense fortune of John D. Rockefeller. If the path he was on had been conventional wisdom, then it’s safe to say we would never have heard of Rockefeller.

In commerce, the present is invariably a look into the past. The ambitious ensure this. Since we’re so eager to progress, it’s necessary that the Trump administration does not shower government favor on any specific economic outcome, but instead gets out of the way so that ambitious people with different visions can determine what’s ahead.