Business & Technology

The market myth

Wherein I ramble on about markets and regulations

If I could persuade everyone in America to read a single paragraph, it would be the second 'graph in Dean Baker's new piece in the Boston Review: "Free Market Myth." Here it is: In general, political debates over regulation have been wrongly cast as disputes over the extent of regulation, with conservatives assumed to prefer less regulation, while liberals prefer more. In fact conservatives do not necessarily desire less regulation, nor do liberals necessarily desire more. Conservatives support regulatory structures that cause income to flow upward, while liberals support regulatory structures that promote equality. "Less" regulation does not imply greater inequality, nor is the reverse true. God yes! As Baker points out, this kind of framing puts conservatives at a huge advantage. Americans are suspicious of the vicissitudes of capitalism, but they're even more skeptical about the competence of government. If you can claim you're arguing for "less government intrusion," you've got a big head start. Even more irksome to me is the extent to which progressives and environmentalists cede this framing to conservatives -- indeed, help reinforce it! I can't count how many times I've heard people on this site and elsewhere railing against the "free market" and how it's brought the world to the brink of ruin. Argh. The problem not some inherent moral valence of markets -- no such thing -- but the actual practices of actual people who structure markets to benefit those with power at the expense of those without (and those yet unborn). There are no unstructured ("free") markets. The very term "free market" embeds the myth of a Platonic market free of government involvement. (It's a species of the "noble savage" myth -- the noble market.) But there is not and could be no such thing. Markets are human institutions created by human decisions and maintained by collectively agreed-upon frameworks.

Another step forward

Dynegy pulls out of coal-fired power plant partnership

Today Dynegy announced the dissolution of its partnership with LS Energy, formed in 2006. The goal of the partnership was the construction of up to eight new coal-fired power plants -- as part of its dissolution, Dynegy has abandoned plans for six of the eight. Here's the key bit from the release: "The development landscape has changed significantly since we agreed to enter into the development joint venture with LS Power in the fall of 2006," said Bruce A. Williamson, Chairman, President and Chief Executive Officer of Dynegy Inc. "Today, the development of new generation is increasingly marked by barriers to entry including external credit and regulatory factors that make development much more uncertain. In light of these market circumstances, Dynegy has elected to focus development activities and investments around our own portfolio where we control the option to develop and can manage the costs being incurred more closely." One of those "factors" that has made the development of new (coal) generation "uncertain" is called grassroots organizing. Along with its nonprofit partners, the Sierra Club organized a campaign targeting Dynegy, with protests and rallies that drew unwelcome attention to its plans. Another little piece of good news in the anti-coal fight.

Not so cheap when you have to clean up your own mess

Stiffer regulation of coal ash would cost the industry billions

If I've said it once I've said it, oh, around eleven kazillion times now: "coal is cheap" because the coal industry externalizes costs. Take, for instance, coal ash. It contains several substances that are classified as toxics individually, but the ash itself isn't thus classified. That means it can be stored in enormous pools with no liners, behind earthen dams that, as the disaster in Tennessee illustrates again, periodically fail. What would happen if ash were classified as toxic? The answer can be found in this stellar piece from Bloomberg. Increased regulation would bring costs to upgrade or close more than 600 landfills and waste ponds at 440 plants nationwide. While the Environmental Protection Agency put the price tag at $1 billion a year in 2000, power generators predict the cost would be as high as $5 billion, said Jim Roewer, executive director of the industry-funded Utility Solid Waste Activities Group, in a telephone interview. Why so costly? An EPA report in 2000 found a quarter of retention ponds and 57 percent of landfills lacked liners to prevent pollution from leaking into nearby water supplies, though the 2007 follow-up study found such controls more common at newer sites. So much for cheap. Also note this macabre/hilarious bit:

Brit's Eye View: Wise after the event

The insurance industry is making strides on climate, but has further to go

After another year full of unpleasant surprises, you’d think the insurance sector would be ratcheting up its response to big risks like climate change. The U.K. industry has about $15 trillion of assets under management, …

The de-greening of America and China

How the U.S. and China can help, not harm, each other

So this is how it worked: Instead of greening our manufacturing base, amping up our recycling system, and competing on the basis of better production technology, we shipped our production to China, which is busy …

Coal blogging is fun!

Coal front group sets up ‘Blogger Brigade’ to fight reality

Originally posted at the Wonk Room. The coal industry is attempting to organize bloggers to promote their false “clean coal” propaganda. The Reality Coalition, a group of national environmental organizations, have begun airing the message …

Goodbye to the clamshell?

I rarely buy be-clamshelled merchandise any more, but I remember it with horror, so this seems like excellent news:

Obama says trade agreements must protect environment

Any trade agreements signed by soon-to-be-President Barack Obama must “[preserve] the planet we all share,” the president-elect declared Friday. Chief trade negotiator nominee Ron Kirk concurred: “[A] values-driven agenda that stays true to our commitment …

Umbra on eco-friendly detergents

Dear Umbra, Like a good guilt-ridden liberal, I’ve switched to supposed earth-friendly dish detergent. And, on the basis of previous Ask Umbra columns, I don’t rinse my dirty dishes before putting them in the dishwasher. …

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