It should be obvious that BP is by far the leading victim, but I’ve yet to see a single expression of sadness for the company and its losses. Indeed, the words of disgust for BP are beyond belief. FULL ARTICLE by Llewellyn H. Rockwell, Jr.
Source link: http://archive.mises.org/12630/feel-sorry-for-bp/
Feel Sorry for BP?
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This all has been just a nightmare. We treat our planet worse than..than anything. The present doesnt matter, the future does.
How do you think we’re going to have a good future, if we don’t act in the present moment? That’s all there is, is the present.
The odd thing is that there are at least two or three other companies that may have more culpability than BP in this case, and that if we can ever figure out what happened, it may be that this is an ‘act of God’ that simply could not have been prevented with the best, fully functional blowout preventer. It’s not like the oil industry isn’t the most regulated industry on the planet. (There is essentially not a single oil or energy-producing activity that can occur without either a Federal or state permit, and more often than not, permits from more than just one or two enitities.) Every rig in the Gulf has blow-out preventers, and are tested with high frequency. These tests show they have an exraordinarily low failure rate.
Meanwhile, government’s responsibilty, paid for with extra task-specific taxes on oil and gas, was to have a pre-approved plan and equipment in place to handle a spill in the gulf. They were supposed to have burn-off equipment in stock, ready to be used. However, the government failed to purchase this equipment, and has been quietly trying to get its hands on it since the ‘first day’ of the spill. This failure of the government WILL NOT be highlighted by the media, and the resulting loses to the coastal environment will not accurately be laid at the feet of the government.
The high cost of oil currently has one cause: government regulations, taxes, and impediments to both exploration and production. (This platform was an exploratory rig.) The price of oil is only going to skyrocket now, and that’s not even counting US dollar inflation. Meanwhile, China will have no compunction drilling for the same oil with even fewer safeguards.
The irony behind this though, is that if the event really was an “act of god” and unpreventable it suggests the offshore drilling is inherently unsafe. It would be far better for the industry if it’s proven to be a preventable mistake.
“The high cost of oil currently has one cause: government regulations, taxes, and impediments to both exploration and production. (This platform was an exploratory rig.) The price of oil is only going to skyrocket now, and that’s not even counting US dollar inflation. Meanwhile, China will have no compunction drilling for the same oil with even fewer safeguards.”
Is there any evidence that our offshore drilling will lower gas prices a significant amount? American oil companies already own land with 34 billion barrels of undeveloped oil, which is not being exploited because current gas prices are too cheap. U.S. oil production already peaked 40 years ago, and the oil we drill here is going to be put on the global market (it’s not like U.S. drilled oil only gets used in the U.S.).
I understand the principle of being against such regulations, but is there any study showing a significant change in gas prices?
How does ONE well blowing out show that the entire industry is inherently unsafe? That type of reasoning was struck down by a federal judge today. He argued, does the whole airline industry need to be shut down after one plane crash? All oil tankers like Exxon Valdez? All trains? All mines? That’s not a rational position to take.
On criticism, what is the equation vis-a’-vis the growing National Debt and deficits each year- to the economy— entitlements of 2.1 trillion yearly (beyond the grossly over inflated cost of Insurance companies, hospitals, pharmaceutical companies, etc.), and, PRIVATE BANK FINANCING the DEBT, (outside China’s Central Bank–and did the FED monetized our debt–by injecting US currency directly into China’s Central Bank where they turned around and purchase Treasury Notes: see: The New York Times op-ed article “The Great Wallop” by Nail Ferguson), RATHER THAN the FED being ordering to just print the 2.1 trillion dollars (as “an interrelationship”) for entitlements each year and inject it into the entitlements rather than make it as debt first (debt peonage), and them put the 2.1 trillion dollars into entitlements? What is the difference outside the Oligarchy of private banks benefiting first?
The following are few comments that I first tried to post here, and then copied to my blog / http://mises.org/Community/blogs/tokyotom/archive/2010/05/09/risk-shifting-bp-and-those-nasty-enviros.aspx. I can’t seem to find them here, so I am re-posting.
I see Stephan Kinsella has posted a response, here: http://www.stephankinsella.com/2010/05/09/tokyotom-on-risk-shifting-bp-and-those-nasty-enviros/
Lew, I largely agree with your criticism of government but some of your piece is simply confused.
1. “It should be obvious that BP is by far the leading victim, but I’ve yet to see a single expression of sadness for the company and its losses.”
BP is the leading “victim”? Victim of what/who? Sure, they’re a target (1) for all manner of evil people whose livelihoods or enjoyment of their property or common property are directly or indirectly affected by the spill, (2) for evil enviro groups (relatively well-off citizens who profess to care about how well/poorly government manages the use of “common resources” by resource extraction industries), and (3) for evil governments and politicians looking to enhance their own authority/careers. But these are all a consequence of the accident, and not a cause of it. Has BP been defrauded, tricked or strong-armed into drilling anywhere? Is BP the “victim” of its own choices?
Even if one concedes that some criticisms of BP will be unfair, how can BP possibly be cast as the LEADING victim – as opposed to all of the others whose livelihoods or property are drastically affected by this incident, which they had no control over whatsoever?
2. “The incident is a tragedy for BP and all the subcontractors involved. It will probably wreck the company”
The incident will certainly be costly for the firms involved, but the firms will survive the death of employees, and there is certainly very little risk indeed that BP will be “wrecked” by the spill. Far from it; it is unlikely that BP will even bear the principal costs of cleanup efforts, much less the economic damages to third parties that federal law apparently caps at $75 million.
Have you not heard of “INSURANCE”? A little thinking (and Googling) would tell you that BP (and its subcontractors) has plenty of it. To the extent BP is NOT insured, it has ample capability to self-insure, unlike all of the fishermen, oystermen and those in the tourist industry who are feeling significant impacts. Insurers will bear the primary burdemn, not BP.
3. “we might ask who is happy about the disaster: 1. the environmentalists, with their fear mongering and hatred of modern life”
Sorry, but this is perverse: enviros might feel that they have been proven right – and you might be annoyed that they can make such a claim – but they certainly aren’t “happy” with any of the loss of life, damage to property or livelihoods of the little guy (or of bigger property owners), or to a more pristine marine environment that they value.
“Hatred of modern life”? Surely any clear-thinking Austrian can see that, just as Austrians hate our modern kleptocratic, incompetent and moral-hazard-enabling government, many enviros are relatively well-off people who dislike how “modern life” seems to take for granted the way government-ordered “capitalism” enables a systemic shifting of risks from manufacturers to those downwind and downstream, and to all who enjoy what remains of commons or government-owned property.
Haven’t Walter Block, Roy Cordato, Murray Rothbard and others written about this? Or do “good” Austrians these days simply hate government, but love big corporations and banks, and the way government enables them to shift risks to the rest of us?
Your projection of happiness at damages to common resources/private property and hatred of modern life is especially perverse, given your own explicit recognition that government ownership/mismanagement of commons, and setting of limits on liability both skew the incentives BP faces to avoid damage, and limit the ability of others (resource users and evil enviros) to directly protect or negotiate their own interests. Why is the negative role played by government any reason to bash others who use or care about the “commons”?
We have seen Austrians – sympathetic to the costs to real people in the rest of the economy – rightly call for an end to a fiat currency, central banking and to moral-hazard-enabling deposit insurance and oversight of banks. In an April 9 post by Kevin Dowd on the financial crisis, we even had a call “to remove limited liability: we should abolish the limited-liability statutes and give the bankers the strongest possible incentives to look after our money properly” – but Dowd’s comments simply echoed in the Sounds of Silence. Why do you and others refuse to look at the risk-shifting and moral hazard that is implicit in the very grant of a limited liability corporate charter – not only in banking, but in oil exploration and other parts of the economy?
http://bit.ly/atelEr
4. “The abstraction called the “ecosystem” — which never seems to include mankind or civilization — has done far less for us than the oil industry, and the factories, planes, trains, and automobiles it fuels.”
Frankly, this is nonsense. Austrians understand that focussing on the “ecosystem” is often an unhelpful abstraction and distraction from the fact that there are competing and conflicting interests held by people in resources that are not effectively owned or managed. The Austrian focus is on how to enable those with conflicting desires to coordinate their planning, not to engage in some muddle-headed balancing of collective “utility” that says one powerful group of users is “right”, so other claimants should be scoffed at and chased away.
And the “ecosystem” is what gives us air to breathe, water, food and a host of other things. Do you really mean to say these are relatively unimportant?
5. “the environmentalists went nuts yet again, using the occasion to flail a private corporation and wail about the plight of the “ecosystem,” which somehow managed to survive and thrive after the Exxon debacle.”
Seems to me your “facts” about the damage done by Exxon Valdez to the “environment” – including the small segments used by by man – and recovery/compensation are basically counterfactual:
http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill
http://www.alternet.org/environment/22260
Further, it seems you don’t have any real clue as to the escalating damage that man is doing to our shared ocean “commons”. These two TED talks might help open your eyes:
http://www.ted.com/talks/jeremy_jackson.html
http://www.ted.com/talks/sylvia_earle_s_ted_prize_wish_to_protect_our_oceans.html
6. Finally, like BP, you have understated the degree of the oil leakage; BP initially estimated 1000 bpd, but later agreed with estimates by others that the leak is at least about 25,000 bpd, with risks of an even larger blowout.
Here’s to hoping for greater insight and more productive engagement from LvMI.
A lurking hater of mankind
TokyoTom
Congrats!
Your comment to this crude oily article is one of the not many sane comments here.
I really enjoyed reading it.
Especially citation 4 is such (crude) nonsense. If the environment (which can not be accounted for in terms of money or gold) is the basis to our life. If we destroy it we destroy the whole chain of economic activity that depends on it and one of our biggest food production capabilities.
And btw money is just a tool not a moral value. This world is much more than can be valued in terms of money and gold.
Excellent response. The problem with folks such as Rockwell and Rothbard is that when the discussion centers about the environment, they more often than not start spewing OPINIONS, not FACTS. Rothbard’s article in response to the Valdez disaster was insulting as well: “Well, hell, maybe a coating of black on blue waters provides an interesting new esthetic experience; after all, once you’ve seen one chunk of blue water, you’ve seen them all”. This comes off as some sort of right-winged lunatic diatribe that will not help to advance the libertarian cause. They might as well start criticizing “Jesus freaks” and Billy Graham for their ridiculous pro-life stances.
If the authors on Mises would instead expend their energy in formulating solutions on how libertarianism and environmentalism can co-exist, instead of attacking them, then maybe they’ll be taken more seriously.
It’s no secret that Lew Rockwell is in need of an editor. His blog could use some fumigation, as well.
http://www.lewrockwell.com/shaffer/shaffer149.html
http://tomgpalmer.com/2004/09/25/gary-north-lew-rockwell-and-the-politics-of-stoning-heretics-and-homosexuals-to-death/
http://www.lewrockwell.com/orig11/singer-r1.1.1.html
Environmental Loss != Economic Loss
The two cannot be equated on any scale. I’m surprised that a libertarian can put a ‘price on life’, be it human or animal.
“The loss of fish and marine life is sad, but it is not as if it will not come back: after the Exxon Valdez disaster, the fishing was better than ever in just one year.”
That’s right, all other living beings on this planet are expendable and humans have the right to lord over them. We kill them by spilling oil into their living domain, but there’s no need for any ‘environmentalist’ to rehabilitate or fight for clean-up. The government will take the compensation from BP, but unless there are a few environmental activists around to ensure that this money is spent wisely, no real disaster management work gets done because marine creatures are ‘expendable assets’ which will be replaced anyway.
“The main advantage to the environmentalists is their propaganda victory in having yet another chance to rail against the evils of oil producers and ocean drilling. If they have their way, oil prices would be double or triple, there would never be another refinery built, and all development of the oceans would stop in the name of “protecting” things that do human beings not one bit of good.”
Oil is inherently priceless. The cost of oil reflects the production and transportation costs. If the cost of oil doubles or triples, more efforts would be taken to develop alternative fuels. Also, there is no substance to the stand that offshore drilling is keeping oil prices at their current level.
“I’m surprised that a libertarian can put a ‘price on life’, be it human or animal.”
Sure we can. For instance, duck breast magret goes for about $28 a pound, if you buy in bulk. Animal life is by no means priceless. The idea that it is priceless is ludicrous.
“Oil is inherently priceless.”
I think you mean it has no inherent price. “Priceless” means that people would pay any price for it.
“The cost of oil reflects the production and transportation costs.”
No, the cost of oil reflects the balancing of supply and demand. Production and transportation costs have to be covered for suppliers to exist, but that is not all there is to it.
“If the cost of oil doubles or triples, more efforts would be taken to develop alternative fuels.”
Yeah, so? This means that the cost of oil should be artificially increased, simply in order to encourage more politically correct energy sources?
“Also, there is no substance to the stand that offshore drilling is keeping oil prices at their current level.”
All supplies of oil, including offshore oil, contribute to keeping oil prices down by increasing supply. Getting rid of offshore drilling would reduce the supply of a commodity, which would definitely increase the price. Your knowledge of even the most basic economics is abominable.
Many lefties would be libertarians if not for the economic ignorance, as many righties would be libertarians if they thought about anything other than themselves.
Obviously, Kashyap and TT are having a negative reaction to Lew’s rhetoric about ecosystems. I think Kashyap meant something like “how can you put a price on an entire link in an ecosystem”. You can’t (and I don’t think that even conservatives like Russ or Rush Limbaugh want to actually go about willy-nilly destroying them. They sincerely think they aren’t being destroyed, I think that’s the disconnect, TT). Enlightened libertarians are very concerned about pollution, that’s one of the reasons they want to eliminate the most wasteful entity on the planet: the State. Let’s start off by yanking away Russ’s security blanket, the overseas U.S. military: they have never been attacked unprovoked and yet, in their American mania for the pursuit of personal security through idiotic means they use more oil than a lot of entire countries do pursuing life.
(And the resultant rotten wars in the Middle East are a great cause of the higher oil prices)
It *is* terrible that the U.S. government and one of its junior partners in corporatism caused this disaster in the Gulf, Kashyap. You *are* correct, this disaster is bad for the economy. Lew was mainly addressing the pervasive and truly suicidal anti-business mentality, of course.
…not to mention the waste of state-subsidized petroleum, rife in the middle-east, venezuela, and anywhere oil has been nationalized. the real gas-guzzler accusation is best leveled at government.
The necessary condition for the existence of prices (i.e., exchange ratios) is ownership. Value and price are not the same thing.
The government has a horrible record with “environmental protection”. Federal lands have been used to test nuclear bombs, for over-grazing by livestock to the point of environmental degradation, and they have artifically lowered input costs/subsidized production which allow the overuse/abuse of lands for farming purposes, etc. Private property, with no government intervention, is kept up because property owners have incentives to maintain their land/property, and the owners will not tolerate degradation by someone else.
“Environmental Loss != Economic Loss The two cannot be equated on any scale.”
What you fail to realize is that every action that a human being takes is the result of an economic calculation. Everything has a price, relative to each person’s subjective value. As an example, would you give away all of your possessions if it meant that you could save a single fish that would otherwise be killed by the oil spill? Ten fish? Ten thousand? As a dutiful environmentalist, I am sure there is some point where the amount of wildlife saved will give you a psychic benefit that is greater than the benefit you receive from having all your stuff. The main problem here is one of information, as it is nearly impossible to predict who or what will be effected by the spill, but to merely throw up our hands and declare that the damage is astronomically high and outweighs all possible human interests is lazy, alarmist, and hypocritical.
“The government will take the compensation from BP, but unless there are a few environmental activists around to ensure that this money is spent wisely, no real disaster management work gets done because marine creatures are ‘expendable assets’ which will be replaced anyway.”
I assert that the presence or absence of “a few environmental activists” will have no bearing upon whether or not the money will be spent “wisely”.
“The cost of oil reflects the production and transportation costs.”
This statement is a common fallacy. To see why this is false, here is a quick thought experiment: An entrepreneur develops a new process for refining oil that cuts the total production cost to one-fourth, but only half as much fuel is produced from a given volume of oil. If all producers switched to this process, cutting their cost by 75% to produce half as much fuel (making the production cost of a given quantity of fuel half as much), what would happen to the price of fuel? Your statement, quoted above, says that the price should go down.
In reality, diminishing supply or increasing demand is what causes prices to increase. The market will clear at a particular price. If a firm cannot cover its costs at that price, it either takes a loss or leaves the market. If enough firms leave, the price will rise in response to the reduced supply, making oil production profitable again for those firms who hold out. By the same logic, when revenue exceeds costs, it creates an incentive for more producers to enter the market to cash in on the profits, bringing supply up and reducing the clearing price. Basically, you have the relationshop almost exactly backwards. The price of oil, as determined by supply and demand, is what determines how much cost firms can bear in the production of oil.
Alternative fuels act as substitutes for petroleum-based fuels. Just like oil, the supply and demand of these fuels determines the price point. At present, all of these fuels have a lower supply and higher cost of production than petroleum fuels. This means that unless the demand for them increases, production costs go down, or the price of oil goes up, it will remain unprofitable to produce them.
A laissez-faire economists looks at this situation pragmatically. If the cost of something is higher than the revenue, you simply don’t produce it. To do so is to destroy wealth and squander scarce resources. To the statist environmentalist, such an attitude is intolerable. This leads to various schemes to manipulate one of the factors I mentioned above. People are encouraged to pay more to buy alternative fuels to “save the planet”, they call for government subsidies to shift the costs of production elsewhere, or they try to limit the supply of oil. Subsidies are a particularly insidious choice, because they can create a huge amount of waste that is effectively invisible. The first option is the only one compatible with libertarianism, though the astute observer will note that it will not be easy. The third option will directly harm consumers of petroleum and industrial production in general.
I get a sense of desperation from mises.org these days. Most of this essay is obviously bunk, and that’s fine, but I suspect it was written to deliver this payload:
•the environmentalists, with their fear mongering and hatred of modern life, and
•the government, which treats every capitalist producer as a bird to be plucked.
It was time for a few shrill bullet points of mindless sloganeering. The mantra quota needed to be filled.
A useful post might ponder ways that in a fully deregulated society, a company would never be so stupid as to go operational without a plan for the most fundamental failure – loss of control at the wellhead. BP is still flailing around like the idea never occurred to them.
It should be obvious that this is an inefficient way of conducting business. So inefficient that it would be nice to somehow check that operations of this scale are not executed by abject morons, and if I’ve ever seen the three stooges, it was those clowns that ran the companies sitting in front of the House panel.
I would get the impression of a sense of desperation from Ackerman if I hadn’t already read hundreds of his mindless posts. They are mostly bunk, and that’s fine, but I suspect he writes them to deliver this payload:
He’s a real cutie-pie and incredibly brilliant.
It was time for a few off-the-hip ramblings. The drivel quota needed to be filled.
- – - – - – - – - – - – - – - -
Lew can write an article about anything he cares to, Einstein. This one was about the anti-capitalist mentality (and it *is* a real thing). *You* write one about how these corporatist stooges belong in front of the corporatist stooges who got stooges like you to vote for them.
Quite frankly, I think it’s more aggravating that the Lew Rockwell crowd thinks it’s qualified to rebuke conventional medicine, because they denote AM as being libertarian and AMA/FDA as being the spawn of Satan. This dogmatic article isn’t any surprise either.
that the ama has a spiked tail, cloven feet and a pitchfork indeed doesn’t make it the spawn of satan.
We’re aggravated that orthodox views (pro-government intervention) on everything dominate. That every failure in a society that is now government regulated beyond belief is invariably attributed by the press and the hordes to “not enough government regulation.”
He’s aggravated that the unofficial and unorthodox still get to make little peeps.
His side will continue to steal our money with ever diminishing returns (as this institute shows through history and theory).
I’d like to hear his definition of “dogmatic”.
“We’re aggravated that orthodox views (pro-government intervention) on everything dominate. That every failure in a society that is now government regulated beyond belief is invariably attributed by the press and the hordes to “not enough government regulation.”
He’s aggravated that the unofficial and unorthodox still get to make little peeps.
His side will continue to steal our money with ever diminishing returns (as this institute shows through history and theory).”
My “side” takes issue with sophistry; be it the critics of AE who don’t know their capital theory, or the armchair doctors with an a priori axe to grind.
“I’d like to hear his definition of dogmatic.”
A chow dispenser for puppies.
Alright doc, what dog do you have in the hunt? Where *do* you stand? In your opnion, do people have the right to hear the theories of quacks and even to consult quacks?
This looks like an elaborate straw man you’ve built against the “Rockwell crowd”, I guess I don’t have the time to unravel it right now.
Your defintions of “sophistry” and “dogma” are certainly unorthodox. I don’t care for that with English.
As always, concerns or objections are greeted with petulant zealotry on the Mises blog/forum. Ironically, there is a lack of knee-jerk bigotry at the oh so despised LL blogs. Personally, I think it reflects well on them, if you get my saying.
Yeah, thanks for answering my questions. No, I don’t get what you’re saying. So whatever other blogs you go to, you call them dogmatic bigots and idiots and then they join you for a chorus of Kumbaya? Good on ya.
What if BP is lying ? How will that be corrected in Rockwell’s imagined utopia ?
The ecosystem has done less for us than the oil industry??? Are you for real? What about your ‘food’, and that little thing called ‘oxygen’. Not to mention the fossil fuels (that’s fossilised organic matter y’know) that are, yes, a product of the ecosystem. Seriously.
He said, the “abstraction called the ecosystem, which never seems to include humans and civilization.” In other words, he’s talking about the purist “conservationist” sense in which modern environmentalists think of the ecosystem as some thing that is always destroyed by humans and would be better off if we didn’t exist at all.
It should be obvious that he didn’t mean the actual ecosystem in the real sense, as something that has some power to recover and is constantly under change from all forces that are apart of it, which does include humans and civilization.
It would truly be ridiculous if he did think that the ecosystem was not something that was important, but that’s definitely not what he meant and I think that was rather clear.
has anyone that posts here been to the gulf area to actually view the spill or gush???
Fisherman’s wife breaks the silence :
http://www.youtube.com/watch?v=_HSQiryMWr8&feature=player_embedded
So how long till Lew publishes his next moronic piece?
Hey Llewellyn, I’m going to bash your skull open with a goddamn rock and fucking eat what falls out. Hope it hurts.
It’s more than a little disappointing – given how serious the economic damage being wrought by the BP situation is, and the role of government and BP in the genesis of the problem – how unproductive this thread has turned out to be.
Here is more information and analysis for any interested Austrians out there:
My related blog posts (including comments on/links to posts by Sheldon Richman, Kevin Carson, Ed Dolan, Matt Yglesias, Scott Sumner and Shawn Wilbur) can be found here: http://mises.org/Community/blogs/tokyotom/search.aspx?q=bp
Roderick Long has links to various posts by others (Carson, Richman, plus Darian Worden, Gary Chartier, Alex Knight) here:
http://aaeblog.com/2010/06/08/roundup-on-bp/
My posts on fish and ocean drilling are also relevant:
http://mises.org/Community/blogs/tokyotom/search.aspx?q=fish
http://mises.org/Community/blogs/tokyotom/search.aspx?q=ANWR
Regards,
Tom
Mr. Rockwell,
Respectfully your grasp of environmental problems seems tainted by your belief that we are all hapless victims of the state and/or collectivist democracy. If my neighbour is a psycopath and he calls me up one day to tell me my house is burning, I check to see if perhaps, today he is not being evil and is just pointing out something he observed. Just maybe, my house really is burning.
Environmental issues are real problems, it is disturbing to hear environmental concerns critized by otherwise logical people on the basis that the government sees the environment as something to be protected. Is that simplified libertarianism? If the government says so, its wrong, believe the opposite? You guys could save A LOT of typing if that’s the case.
On a related note, not everything a company does is correct, the entire idea behind a free-market is that the many, many, many, dishonest, ineffective, unethical companies will be rooted out by people’s freedom to choose. IT DOES NOT IMPLY THAT ALL COMPANIES BY SHEER MERIT OF BEING PRIVATELY OWNED ARE ETHICAL OR EFFECTIVE OR BENEFICIAL TO SOCIETY! If we are to feel sorry for BP, since they provided us with old furtilizer to burn and enough intervention of their own into our freedoms, we ought to feel sorry for the too big to fails too, they after all provided us with all that easy credit.
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