The New Deal dam project that professor Malamud is so proud of provided a few thousand jobs 80 years ago, but has spurred migration, farming, and development that is likely unsustainable and may ultimately be the biggest malinvestment in history. FULL ARTICLE by Doug French
Source link: http://archive.mises.org/13331/hoovers-dam-folly/
Hoover’s Dam Folly
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Hoover Dam has had many negative consequences and will have many more, but Glen Canyon Dam, further up the Colorado River, has the distinction of destroying what very well may have been the most beautiful place in the United States, if not the entire world. To get an inkling of what was buried by the waters of Lake Powell behind GC dam, take a look at the website of the Glen Canyon Institute http://www.glencanyon.org/
Excellent article, Mr. French. Few outside the Great Basin region have any idea about the important issues involved here. I think people who grow up outside of the desert Southwest think that all these dams and reservoirs – such as the “Central Utah Water Project” – have magically cured a desert region of its want for water.
Folly indeed. We shall see.
Doug,
I have often though the city of Las Vegas is unsustainable. Lake Mead seems to be a great metaphor for economic thinking. The Lake was originally created by the dam holding back the waters of the Colorado river. This created Las Vegas. But Bastiat was never consulted and people just never seemed to consider what was lost. Essentially, the Colorado river no longer runs to the sea. Here is a great article that describes the situation and the results of trying to turn a desert into a tropical paradise.
The decline in the level of water in Lake Mead is a clear indication that water being provided by the Colorado is already insufficient to support Vegas. The politicians of the city will continue to draw down the water and approve plans to install pipes at lower and lower levels without ever considering there is a limit. But this water has to be taken from someone and that means those downstream. When it was average Mexican fishermen it was easy but more and more it will become politicians trying to sustain the unsustainable. Those down-stream will fight those in Las Vegas and Las Vegas will fight with those up-stream.
But perhaps the worst consequence for all of this is that national politics will become entwined in the fight for water in the Southwest and all of the nation will be subjected to water restrictions that are forced on the people of the Southwest by the desert, but will be forced on the rest of the country by political hubris and grandstanding.
The malinvestment of the Great Depression is still with us pulling our greatest ideals down into the mud.
Sorry, link is http://www.counterpunch.org/colorado.html
Great article Dick; one could say that the Hoover Dam has led to the greatest environmental disaster in American History. Saddam draining the wetlands in Southern Iraq has nothin’ on FDR.
That seems like a very high number of deaths, even by the standards of 1930s construction projects. Only five workers died building the Empire State Building, for example. I saw a TV show which described how most of these 100 died. The tunnels were filled with carbon monoxide from vehicle exhaust and the truck drivers came down with CO poisoning and many eventually died. The contractors connived with doctors to give the cause of death as another, pre-existing disease in order to avoid paying any compensation to the victims’ families. Jobs were so scarce in the Hoover/FDR depression that nobody complained and they were able to easily fill every job opening with someone desperate for money.
The whole thing smells like the USSR, and the result could be devastation of that region comparable to the destruction of the Aral Sea.
What new economic and environmental disasters is Obama dreaming up right now, involving windmills, solar power and battery-driven cars?
So if greenies were to detonate a bomb and destroy the dam (though their reasoning is different) would they have (inadvertedly) done a great justice?
BTW: They needed the dangerous jobs? Since when did Libertarians give a rat’s about the children down in the coal mines dying of black lung disease over a century ago?
Which Libertarians were that? I want names, not your typically ignorant generalizations. Names, man, names.
Come on Franklin, it’s all informed libertarians. Don’t you know that the State, out of the goodness of their hearts came in and saved all American children from competing with adults in the market? We oppose their meddling, and for whatever reason that is it means that we don’t care what happens to any children.
The truly progressive must agree that the label children include anyone under the age of 30, over the age of 60, any member of a disadvantaged minority, or anyone meeting the state’s definition of disabled. Let us assemble an enlightened vanguard to allot the water, air, land, and sky to the new breed of supermen our programs are hatching.
Indeed people have said it was a choice for the children to work in the coal mines or face even worse poverty. Same too with the dam workers they made the chioce they didn’t have to work there.
There’s rampant time inflation and an ever expanding frame of childhood. Ignore the fully functioning sex organs, adult means whatever arbitrary thing they say it means. You can’ drink until your 21. Your not old enough to make your own health decisions at any age. Soon children will mean everyone, except government workers, and those they deem adults.
BTW: How are windmills, solar power and battery-electric cars environmental disasters? The economics are debatable, but environmentally? As opposed to coal power stations? As opposed to petrol-powered cars which also have lead-acid batteries in them? C’mon.
If there is a way to turn “clean” energy into an environmental disaster, government will find a way. In fact it’s pretty much guaranteed that everything the government does to help the environment will end up hurting it. The reason why is that governments always do what private individuals and businesses won’t do. The reason why people won’t do these things (windmills, etc.) without subsidies is that they are inefficient and unprofitable. The fact that they are inefficient and unprofitable means that among other problems they are a waste of energy, which could have been more efficiently used on something else. But governments don’t care about the environment and they don’t care about efficiency and profitability, they only care about winning elections and building empires of pork spending and patronage jobs.
So the next time you look at a “clean” hybrid car or a “clean” windmill, stop seeing and thinking only about what is in front of you. Think about the huge amount of energy that was wasted building and then prematurely scrapping a perfectly good older car, and building the hybrid car. Think about the working person whose money was taxed away so that this yuppie trendoid could get their shiny, subsidized hybrid car, and who is forced to drive a 12-year-old junker because they lack after-tax money to buy a new car. Think about the tremendous cost and waste of energy that went into building those inefficient windmills, and which must be expended in order to dismantle and scrap the windmills when the government inevitably runs out of money to subsidize them. Think about the opportunities lost due to precious capital being diverted into the windmill boondoggle by socialist governments.
Hence I said you can debate the economics. You’re concerned primarily with the economics not so much the environtmental aspects.
You’re concerned primarily with the economics not so much the environtmental aspects.
You goddam retard
No dingus. Read what O. Henry wrote. He’s against the economics of green technology because of the government’s involvment. That is a different thing from being against green technology because it’s “bad for the environment”. How can an electric car be worse for the environment than a petroleum car (presume current electric cars are the end-all-and-all of the potential for electric car development)? The petroleum car not only produce poisonous emissions but has a lead battery in it too. Believe it or not I do believe a quality nuclear power station would qualify as being environmentally friendly.
They are environmental disasters because they are unreliable forms of energy that take up more resources that they can give out. The windmills and solar panels are nothing but boondoggles that are imposed on the public through rent-seeking measures performed by none other than the group of energy producers and a few stupid environmental activists that will most benefit by such measures. Cheap and reliable energy, such as the forms provided by petroleum, are what build economic growth. Without economic growth, you will never have a clean environment. Since energy is the lifeblood of the economy, and that windmills and solar panels will never provide cheap and reliable energy, you will not have economic growth. I’ll state it once again:
No economic growth, no cleaner and better maintained environment.
Secondly, just to point out, electric cars use coal. Thirdly, the guys at the MasterResource blog handle these issues very well.
Depends on what the power station you happen to have use. If you plug to a nuclear power station then it’s all good. On the other hand, coal is good for quite a few hundreds of years more unlike oil.
Nuclear’s on the expensive side. It’s a source where the costs of federal subsidies are fairly deeply hidden. But it’s significantly higher than are either coal or gas generation. See this chart:
http://www.claverton-energy.com/killer-wind-graphs.html
You’ll notice that wind and geothermal already look very, very good on the cost scale. While on the horizon, heliostatic production may well be critical in providing electricity for urban and other high-density, high-use areas.
http://en.wikipedia.org/wiki/Solar_power_tower
The target rate they’re aiming for is 5.47 cents per kWh by 2020. This approach has some serious advantages, and we’ll be hearing more about it in the future.
The advantages to using a thorium based nuclear generator are (1) abundant sources of fuel available, (2) fission products can’t be used to make nuclear WMDs and (3) waste products decay in a short period of time, solving the disposal problem.
Meanwhile it’s obvious that we’ll continue to have a mix of sources for our electric power grid. Best not to think about putting all our eggs in a single basket.
Sorry, but allow me to quibble with some of your points:
1. “Cheap and reliable energy, such as the forms provided by petroleum, are what build economic growth. Without economic growth, you will never have a clean environment. …. I’ll state it once again: No economic growth, no cleaner and better maintained environment.”
Economic growth is not an Austrian objective, and is a consequence not of cheap energy per se but by people engaging in mutually beneficial transactions.
Further, Austrians generally understand that “economic growth”, as measured by GDP and as it is typically discussed, masks a considerable destruction of open-access commons and public capital (as well as private losses), and thus in part reflects the Broken Windows fallacy. I discussed this in part further here: http://mises.org/Community/blogs/tokyotom/archive/2007/09/28/too-many-or-too-few-people-does-the-market-provide-an-answer.aspx.
While economic growth (and increasing wealth) may help enable investments in a cleaner environment (the environmental Kuznets curve), peoples’ preferences and not economic growth is the driving factor. Even without growth, people will continue to invest in environmental improvement, for which the key is simple changes in institutional rules that enable polluters and consumers/property owners to defend their property and enforce contracts. We would see much cleaner environments in China and elsewhere in the world – the Gulf of Mexico included – if polluters were not sanctioned by states, and local communities had enforceable rights to fisheries, clean air and clean water.TT’s Lost in Tokyo http://bit.ly/8XETe4
2. The “guys at the MasterResource blog” are paid mouthpieces of our statist fossil fuel industries, and chase away and block libertarians; they offer useful libertarian-like critiques of alternate energy policies, but utilitarian defenses of fossil fuels:TT’s Lost in Tokyo http://bit.ly/9BGPsP
TT
“Economic growth is not an Austrian objective, and is a consequence not of cheap energy per se but by people engaging in mutually beneficial transactions.”
Tom: Finding ways to keep energy affordable and abundant is critical to the future of civilization. We will continue to use more of it every year than we did the previous year until we hit a wall, where a dwindling supply makes it more expensive to provide. This is a rather wider agenda than just the promotion of Austrian orthodoxy, IMO.
Also, it does seem to me that one priority we see in Austrian thinking is the prevention of price inflation, of the sort that erodes the value of the dollar or equivalent medium of circulation. And here, the one thing that would make the costs of virtually all goods go up would be the cost of the energy required to extract them from the ground, process or manufacture them and ship them to the retailer. Our life style is now deeply global and energy-intensive. I’d like my money to continue going as far as it does now.
Oddly, the great increase we’ve been seeing recently in Federal Reserve issues hasn’t affected prices in the least. The official inflation rate has been holding quite steady. And the obvious reason for that is that none of this new money is hitting the street. Instead it’s being held by the major investment banks as replacement reserves, to take the place of all the money they frittered away in the Meltdown.
So I would suggest that Austrians do have a vital interest in supporting newer energy technologies. They’re good for everyone’s bottom line.
“They [wind and solar] are environmental disasters because they are unreliable forms of energy that take up more resources that they can give out.”
Not so. Give us an engineering study that says wind and solar use up more resources than they yield. Clearly, they don’t. Plus efficiency increases are constantly being realized.
Such studies have been done with every energy source and potential source. I’ve seen no one reputable make such a claim about wind and solar.
Corn-based ethanol is another story. Some studies show it costs more energy to produce such fuels than they provide to the user, on a therm-to-therm basis. Others show just a very slight gain. But it’s apparent that with corn, what you really have is a government boondoggle, a gift to the corn farmers. It’s not as good as gasoline, it costs more, and we pay up the nose in subsidies.
“The windmills and solar panels are nothing but boondoggles that are imposed on the public through rent-seeking measures performed by none other than the group of energy producers and a few stupid environmental activists that will most benefit by such measures.”
The petroleum industry enjoys massive subsidies and tax breaks, always has. Wind and solar, just getting started, need some breaks just to get on and stay on the playing field. Such subsidies, like all government inducements, should be both small and limited in duration.
In fact what we really need, so we can see the actual cost of the fuels we use, would be to eliminate ALL subsidies– on oil, gas and coal, and then on the newer technologies. Then the energy industry would be forced to readjust pricing massively, and solar wouldn’t look too bad. Our taxes would go down a bit while energy costs would soar, based on their actual cost of production. But at least we could see those costs directly. There’s really no need for the government to guarantee continuing huge profits in established industries that already enjoy the highest profits on earth.
I would start by rescinding the oil depletion allowance. If I start my career with a finite source of labor (the commodity I have to trade) no one gives me a depletion allowance on my remaining working life. So why then should that be the case with oil in the ground?
Especially when the company in question doesn’t OWN the oil in the ground. Extractive industries should instead be paying a proper royalty to the owners of the property they drill on (in most cases, the United States), as they are removing a resource they don’t own.
“Cheap and reliable energy, such as the forms provided by petroleum, are what build economic growth.”
Everything you can make a buck on builds economic growth. Gambling and prostitution both yield economic growth. But what distinguishes oil is that it’s a declining resource. Every year we have less and less of the cheap stuff. That leaves our reserves of the expensive stuff: tar sands, oil shales and ultra-deep sea fields. And they in time will also decline.
So we know that oil-based products are going to be increasing in cost. And we also know that as the general prosperity spreads around the world, demand will be increasing. It won’t just be the rich Americans and Europeans, it’ll be the Indians, Indonesians and Africans who will also want to drive around in fat SUVs, and use synthetic fertilizer in massive quantities to feed their people. Crunch all that data and you’ll find that an insistence on thinking oil alone will cure the world’s problems is short-sighted.
That’s why we need to be looking further afield at new technologies. Tidal’s good, as is thorium-based fission. The world’s coming nine billion customers (by 2035 or so) will not be happy if all they have to burn is oil, along with the more abundant coal and gas. Auto fuel will go to ten bucks and beyond. And at some certain point become unaffordable.
The Hoover Dam created a lot more jobs than the few thousand. All of the industries and development in the SW is a direct result of the water and electricity the dam provided. The same applies to the Columbia River dam system.
I agree that water is a growing problem and must be addressed, but I wouldn’t go as far as to blame the dam. If you want to blame someone, blame all of us that enjoy fresh produce and refuse to buy canned fruit. Or all of us that maintain 10,000 square feet of lush green fescue.
The real problem is that all of us don’t pay the market price for water. My water rate in Nevada was set at $65 a month and now it is $300 a month. Guess what, we are cutting our water usage as well as our other utilities in order to offset the water increase.
Getting back to the dam system, society got a great return on those investments. It is too bad that Obama failed to learn something from it instead of pouring money into unemployment compensation.
Greg,
While your point is valid, I think the true number of “jobs created” would be found by discounting the amount of jobs which would have been created otherwise (over the years, not necessarily during the Great Depression).
great point; what greg doesn’t look at is the cost of those 50 million people moving to the SouthWest. What would the the state of the once-great cities in the MidWest be right now? What is the cost of abandoning a building in milwaukee and building a new one in SoCal?
Would Omaha-Lincoln have a population of 2 million right now if the Hoover dam wasn’t built?
What about the Front Range? Would we have seen the massive growth in Denver-Fort Collins-Colorado Springs occur 30 years earlier?
moving 50 million people and the jobs their attached to across the county isn’t free.
Plus, as French pointed out, its unsustainable.
What would the the state of the once-great cities in the MidWest be right now? What is the cost of abandoning a building in milwaukee and building a new one in SoCal?
Oh, puhleeze. If that building in Milwaukee had been abandoned because taxes were lower in Carolina, I suppose you’d be worrying about the impact of low taxes.I certainly don’t believe that Hoover’s and Roosevelt’s grand public works projects increased aggregate demand and pulled us out of the Depression, but are we really all environmentalists now?
Listening to a bunch of Libertarians whining over the ecological damage of a magnificent piece of engineering that opened 1/4 of the country to settlement is not unlike watching Conservatives who’ve just discovered the power of Saul Alinsky’s rules.
“The real problem is that all of us don’t pay the market price for water.”
Bingo! Without the market pricing that would enable calculation, many more malinvestments have and will be made, compounding the problem. The one thing that you never hear of as a solution to the problem of water is transferring it into private hands where pricing could regulate demand rather than legislation.
Can anybody provide a link to Austrian views on water rights? I live in Colorado here and we ‘own’ the headwaters, yet have water shortages because it all goes to California and Vegas.
I used to live in the cesspool known as Las Vegas, and I remember there was talk about building a massive pipeline/system of reservoirs from the Great Lakes to the SouthWest; the Great Lakes is the largest supply of fresh drinking water on the face of the earth (22% of global fresh water supply). Michigan vetoed the idea, saying that it is a state treasure. When Colorado shuts off the water supply to support its own development, SoCal will have to buy water from Michigan and desalinize — the price of water there will reflect the availability of resources there.
The states are each allotted an amount of water by government fiat. These waters are then “scalped” in the secondary market. Vegas has a very small fiat percentage and is buying all available water in the secondary market. This is what drives up the price and is the good news. Colorado has the first chance to retain or divert the water, but is otherwise at the mercy of the political influence markets or the economic markets.
BTW Vegas is a cesspool only for the lazy and unskilled, who always slink back to Socialist Slave Pens like Detroit when they discover the lack of wealth transfer here. Vegas is a true haven for capitalists and persons of ability like myself. Say Hi to Michael Moore, who has never built so much as an outhouse yet, I hear the average price of a home in Detroit is $7,000. Capitalism, FTW!
I understand how the water is currently divvied up, but how SHOULD it be divided, based on Austrian economics?
Vegas is a cesspool precisely because it is filled with the dregs of society: convicts, high-school dropouts, druggies, compulsive gamblers, etc etc. Most of the city’s residents are losers who failed elsewhere, but can make a decent living parking cars.
When the majority of a city is comprised of rude, mean people with no skills or education and a penchant for crime, why the hell would anybody else want to live there?
I would say that Las Vegas is the most free market oriented city in the US. If more cities followed Las Vegas’s example sans Casino, they would be much better off.
Check out City Center. That’s the future. Try to build that in New York. The permits would take you 10 + years to get.
@Hayek’s Heroes Another keystone of Vegas and all Sunbelt success, beside the good weather and cheap air-conditioning, is the right to work. At will employment is a crucial necessity. Once your best workers start leanin on pie-eyed uncle Sam to get out of providing a days work for a days pay, the fat lady at xyz welfare scam office never stops singing and capitalism is over. @ Nick I believe all Austrian decisions are made in a dispersed fashion through prices. Anything arbitrary, planned, or hierarchically rationed is just stupid socialism, which the rust belt is using. PennsylMichiOhilinois always fails in competition against Sunbelt dregs of society, convicts, high-school dropouts, druggies, compulsive gamblers, losers who failed elsewhere, rudes, meanies, unskilled, educationless, and crime penchanters. Mises got game!
Even Henderson is gong down the toilet. I lived in the NW Corner of Town (Centennial) and it was decent — perhaps the only good place to live there left is Summerlin…
Still looks good from my gated and patrolled community.
Give me ancient lands, your storied pomp!” cries Nick with silent lips. “Keep your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Return these, the homeless, tempest-tost to your wretched cesspools. I post my no vacancy sign upon my gleaming aluminum mobile home door!”
Seriously, for most tourists Vegas Strip or Bourbon Street is indistinguishible from Beverly Hills. Who cares about the giant shantytowns in the sewers and soup kitchen Agora of the professional victims? I always throw the carboard sign guy or tweaking valet a twenty and then quickly roll up my tinted window.
Austrians Schoolers are not dividers. Even if they come into power in the US they are adamant about the power of their ideas, not their skill in applying state force. They strive to act identically whether powerless or all powerful, and seek only to dimish suffering and increase happiness through protection of private property, fostering of freedom and labor specialization, promotion of peace, and establishment of equality of all before the law.
How long did it take to pay off the Hoover Dam, and what was the actual final total cost?
thanks doug for the good article and taking a stand that is often overlooked by Libertarians.
Infrastructure built by the state is not a “natural” occurence and is a direct barrier to a real free market. Infrastructure is nothing more than the physical manisfestation of fiat money policy and supply side economics. Build it [with taxpayer dollars of course} and they will come.
When we “demand” to have water, demand to have access and transportation, demand products, our neighbors, near and far will fill that demand. That is a free system. When we are told that we need it and instructed to pay for it, with the proceeds directed to whoever the state wants to benefit, we have what we have today, a planned economy and a controlled populace.
Las Vegas is the perfect example of a hedonistic version of a perfectly socialist city. Without blatant socialism, Las Vegas is a pile of blown sand and Lindsey Lohan needs a new place to party. All the socalled great capitalists that call the shots in that town, such as elvis headed Donny Trump are no better than the local hobo sleeping in the government shelter. Their government benefits just afford them better digs.
So you are a libertarian nanny? WTG. American cities are all dens of gratification which are propped up by socialist infrastrure. Transoceanic ships builders. Fiat Bridges that cross the great American rivers. Centrally planned transcontinental railroads. They fancy themselves sovereign consumers but then despoil their thrones by ogling drunken teenage girls with breast implants like Lindsey and admiring rhinestone wearing redneck crooners like Elvis who singlehandedly had more casual sex with more cuties than all the Egyptian Pharoahs combined. Dirty Hedonists all of you. Libertarian nannies are here to remind you the goal is to maximize the quantity of production regardless of whether its wanted and prosperity arises not from division of labor, but from division of all social obligations whatsoever.
that’s good! division of social obligations! very true.
the real goal is that there is no goal, at least no “social” goal. or, no goal that one has the power to enforce upon the other.
but, just don’t think we will see that day, but never know!
Thank you, Mr. French, for this article.
I did actually go to see Hoover Dam. Part of the reason was that there was no gold mine tour on my last day in Las Vegas.
An audio runs on the observation deck, stating — amongst other things — that now “we” could do anything. Well yes, now “we” even believe we can control the climate.
The question that springs to mind is that now that we have Hoover Dam, what do we plan to do about it? If the plan entails anything besides just continuing on with it, I’m thinking the residents of Greater Las Vegas might have a problem with that. They have their money and lives invested in the status quo now.
So it’ll stay the same, until in time unsustainability takes its toll. The next question is, will we be throwing up another Hoover Dam any time soon?
The answer to that one is NO. The 1930s are very over, and with them all those giant hydroelectric projects we used to see. Dams now are being decommissioned just as fast as they can be. So this discussion is pretty much just idle chatter.
I think you’re missing the greater point, which is a general criticism of these type of public works programs.
You think this guy missed the greater point? You think the Pope is Catholic? That’s all this guy does, sometimes at great effort.
JFC: The Tennessee Valley Authority brought cheap, abundant electricity to poor subsistence farmers numbering in the millions of homes. It also brought employment, not just in dam building and construction but in a greatly expanded demand for radios, lighting fixtures, refrigerators, etc. Convince me it was the wrong thing to do, and that the people of Tennessee, Alabama, Georgia, in fact everywhere from northern Mississippi to the Virginia panhandle should have just stayed poor and in the dark, out of touch with the world at large and with no ability to make money in a cash economy other than hitch hiking into some city.
It’s a specious argument. Let’s pile on one other point: aluminum. We didn’t have that industry before cheap, abundant electricity came along. So while Alcoa made a decent gain, the more important fact was that we won the war with our ability to produce fleets of aircraft in a twinkling.
Yeah yeah. Nothing the government does is ever any good. It can’t stimulate the generation of wealth. And so on, I know the refrain. Just, for once, look at all the evidence. Government investment created the America we now live in.
We don’t like the America we now live in (or the world it dominates, so please give *that* tired refrain a rest), we’re not zombies. Government does not stimulate, it redirects, and always with nasty unforseen side effects. You have only begun to see them. 9/11 was romper room.
(and, stooge, that’s not a threat, it’s a prediction of what millions of your State’s victims are going to do after your economic “science” completely brings this country to its knees. I want to make that perfectly clear, your being either incredibly dense or shamefully dishonest, I’m not sure which)
“We don’t like the America we now live in (or the world it dominates, so please give *that* tired refrain a rest), we’re not zombies.”
What? You don’t like America? What on earth, then, are you doing here?
I like America… and I’ve been around the world enough to be able to make a decent comparison. I think I owe this country my best efforts at making it better. It does, obviously, have a long way to go from the low point to which it has slid.
But I’m not ready to give up on it. I’ve seen how things work in other places. You can lose enough ground in a generation to require a century to build back. And the quickest way to do that is to throw out the baby with the bath water.
I do enjoy your throwaway anti-science line, “..what millions of your State’s victims are going to do after your economic “science” completely brings this country to its knees.” I think I see you more clearly now. It’s all them pointy headed scientists who think they know better’n ordinary folks telling us what to do. Better off iffen we just go back to the Bible and prays a lot. Damn edjimacated city people. They’ll be the death of us honest folks!
Still, I persistently require some sort of evidence before I choose to believe in extremist theories about how the world works. Remember, I’ve already seen quite a lot of how it works already. And your theories don’t fit my facts.
You are just an embarrassment, as a human. Read it, or not, who cares, none of this is really for a momo like you, anyway:
http://nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-lecture.html
And you admit the country has fallen to a low point, do you like that? What on earth is wrong with you? Why you are so clueless here is because I know the difference between the country and the State.
The conversation, for you, rarely rises above the level of personal vilification. Nonetheless, I’ll treat your comment as though it were a serious one.
The scientific method works in every area one chooses to apply it. And certainly one can make the case that it’s superior to the other popular method, that of just having faith in those things one’s betters assure one are the case. Whether it’s the Church, Marx or Mises, I’m of the school that these apparent truths are too important to be taken merely on faith alone.
So can the Method be readily applied to the economic sphere? Certainly. We find it a little harder to model economic reality to create experimental avenues of inquiry, as we can with physics or chemistry– but we can indeed extrapolate from what we see, as in astronomy. And the first thing we see is that this is a sloppy realm, like any sociologically oriented study, because it involves human behavior. We humans don’t always behave in predictable and rational ways– while atoms react, reassuringly, the same way every time.
So an insistence on certitude in such a field is prima facie off base. We can’t reliably predict economic outcomes. But we can do a fair job of finding out what has gone on in the past. And if we find it suboptimal, we can test other ways of configuring the experiment, to see whether the outcomes are preferable.
Change of subject: American commerce and politics have fallen to a low point over the past thirty years from mismanagement. And from a loss of confidence on the part of the public that our way of life can still be changed for the better. So opportunists who want to tear down the government for reasons of personal gain have gamed the public deftly, convincing many of us that it is beyond hope and should just be retired. Here I point to people like Grover Norquist or Karl Rove, not to your illustrious self. But it’s a trend I see as only being able to complete the process of misgovernment, and not anything leading us toward the light.
We may see your dystopian future sooner than we’d like. Because it’s undeniable that the more people like you work toward dismantling the government, the worse it becomes. And one can see that in time it could conceivably arrive at the point where it serves no fragment of society well– much less the whole. If that day ever comes, it will be everyone’s loss.
Any conversation with you on this site rarely rises above the level of idiocy, because YOU DON’T KNOW WHAT YOU’RE TALKING ABOUT. I’m about the only one nutty enough around here to have any extended conversations with such a fool, sorry you’re stuck with me. And what the hell was your last post? Because it’s wildly wrong that makes it not “personal vilification”? But at any rate, yes, I looooooo-ove to personally vilify arrogant, dishonest, Statist jackasses. Guilty as charged. But that’s not all I do, and you know that.
Did you read the link? Is this your bumbling response? I would never be able to tell if it was or not.
Now let me get this straight: Karl Rove and *not* people like me tore down the government by massively growing it (albeit not in ways that you like, although your agent in the White House today does almost nothing to reverse any of it). Of course people like me didn’t do this, we were screaming against it the entire time, to no effect, of course. Then two seconds later it *is* people like me who dismantled was is now the mightiest State edifice in history and is still growing. Gotcha. Putz.
And you saw it here first, folks, the lefty mind in its full glory: when it all comes completely off the rails, they’ll fully blame the people who were warning them for decades. Like a backwards cargo cult. Beautiful.
Well yes, I think it’s personal vilification and not rational argument when you say things like “You are just an embarrassment, as a human. Read it, or not, who cares, none of this is really for a momo like you, anyway..” etc. It does not add to the content of the conversation. Nor does it bolster your case.
And yes, I did read the speech Hayek gave to the Nobel Committee. That’s what I commented on. I found it to be purposely misleading, and offering a distorted twist on every topic he covered. For instance:
“It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences – an attempt which in our field may lead to outright error. It is an approach which has come to be described as the “scientistic” attitude – an attitude which, as I defined it some thirty years ago, “is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed.”1 I want today to begin by explaining how some of the gravest errors of recent economic policy are a direct consequence of this scientistic error.”
This characterisation (“a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed”) is a purposeful distortion of an understanding of the scientific method that Hayek, an educated man, certainly must have understood full well. I don’t think he was just ignorantly huffing and puffing. The method of formulation of a testable hypothesis, the search for related evidence, whether supportive or tending to disprove, and the formulation of experiments designed to elucidate the truth or falsity of the thesis, is perfectly applicable to the field of economics. He’s just blowing smoke in the faces of his presumed detractors.
And here:
“The theory which has been guiding monetary and financial policy during the last thirty years, and which I contend is largely the product of such a mistaken conception of the proper scientific procedure, consists in the assertion that there exists a simple positive correlation between total employment and the size of the aggregate demand for goods and services; it leads to the belief that we can permanently assure full employment by maintaining total money expenditure at an appropriate level. Among the various theories advanced to account for extensive unemployment, this is probably the only one in support of which strong quantitative evidence can be adduced. I nevertheless regard it as fundamentally false, and to act upon it, as we now experience, as very harmful.”
So he admits there is supporting evidence, but as there must always be some niggling factor left unaccounted for in the evidence, no matter how voluminous it may be, we may never know anything at all based on mere evidence. THEREFORE: his unsupported assumption that “I nevertheless regard it as fundamentally false, and to act upon it, as we now experience, as very harmful” must be regarded as eternally true on the face of it. He need offer no evidence, and in fact would weaken his case if he ever DID offer evidence. Because evidence itself is suspect. It’s the mid-20th century European philosophy of unreason, all over again.
Such unmitigated crap. If the Committee awarded the man a prize for this kind of tripe, nothing has changed from then to this past year, when “man of peace” Obama won a similar award. Even the Grammies have more integrity.
And as for the events of 2001-08, I distinctly did NOT hear any voices on the extreme right warning us of creeping Big Government under Bush. I was monitoring the libertarians at other sites. ALL were adamantly Republican and pro-war. All ignored spending increases and thought tax cuts were a valid approach to making things better. None gave the slightest thought to budgetary problems being created– in fact they were all as highly resistant to my comments in that area as you are today.
The only dissenting voices to be heard back then, when the war drums were starting to beat for our current Crusade, were those of a handful of old hippies and peace marchers. You weren’t there. I’d have noticed the support from another camp immediately.
You can’t read the simplest post and recount the information correctly, yet you can skim Hayek’s Nobel Prize Lecture, write a post of at least 300 words (albeit a moronic one, I’ll grant you) in 27 freaking minutes and then come back an hour later and call Hayek “unmitigated crap”. Ladies and gentleman, check this guy out: the world’s biggest asshole.
I just freaking said I love to vilify you, why do you start your latest post the way you did? God. What “case”? You are a joke, I’m laughing at the world’s biggest asshole.
To your sad delusions about your incredible anti-war credentials, which I answered here already:
http://blog.mises.org/13341/police-state-usa/#comment-703765
…this is the only real anti-war person in D.C. that I’m aware of, love to know of any others:
http://www.youtube.com/user/mpolzkill#p/f/21/wZtPzOukjZA
You can also find a lot of great “master race” music on my channel, and if you go way back through my comments, before the last election, you can see me trying to explain (to other zombies like you) who your ex-man crush really is. Till next time, chump.
I need to correct myself, I agreed too hastily to what you claimed. “Vilify” implies defamation. I haven’t said anything untrue about you. I should have said: “I love to excoriate you, you condescending heap of parrot droppings.” Thank you.
JFC: I certainly AM missing your point. If your philosophy has no practical application, what good is it? The question is, as it always has been, where do we go from here?
Elsewhere on this page I describe the very positive effects of that old regional development program, the TVA. There is no one who can deny the great benefits this conferred on a poor, rural subsistence population back in the 1930s and 40s. So the existence of this program alone disproves the idea that for some vague set of reasons, government can never by its nature contribute to any sort of economic growth. It can. Because it did.
Nor would the corollary belief serve any purpose, that private fields of economic activity always generate a superior economic good. I would point to the countless trillions in concentrated wealth that have been extinguished in the meltdowns of 2001-02 and 2007-08. These two great surges in wealth destruction directly followed earnest ideologically driven programs of financial-sector deregulation. So the case can easily be made that the ABSENCE of governmental controls made such reckless wastes of wealth possible.
When we extrapolate from the broadly general to the specific, we find that no one size fits all rule is adequate to describe all economic activity. And certainly not the one that prefers either government programs over privately initiated ones, or private ones over public ones. There’s just no good universal rule out there, waiting to be discovered. IMO.
But please show me one if you think you’ve found it.
Broken Window Fallacy!
You are recognizing the seen benefits and ignoring the unseen costs. Where would those resources have been spent if there wasn’t a TVA? And all the subesquent development in that area — where would those resources have gone if not for the TVA?
With the Hoover Dam, you would have probably seen more development and less decay in the Midwest, and West Coast Development would have been pushed further north into the Bay Area, Sacramento, Oregon, and Washington. The largely undeveloped Oregon Coast would be more developed., for example. And the Bay Area and Sacramento would probably be continious.
SoCal also steals water from the North, which propted calls for splitting the state in the early 1990s.
http://www.water-ed.org/watersources/
Your theory calls for speculation. And if we point for comparison’s sake to every period in American history that has NOT seen something like the TVA project, we find that the money during such times mostly accrues to the banks.
That’s pretty easy to verify if you open an economic history book. This (the 1930s and 40s) is almost the only period in our two centuries where the money invested has gone toward doing something good to advance the development of a poor region of the country.
michael, I’ll let you have the 2001-2002 and 2007-2008 when you start explaining how there was no government interference in the market before that, which you know you can’t do.
And no one here is denying that those who get the money the government steals or makes through counterfeiting are poorer in real terms. The point is that everyone else is poorer in real terms and were less able to do what they wanted to do because of it.
There was no government interference to speak of during the 1920s, up to Hoover’s exit. And the end result was to leave us mired in stagnation, with no money either in the banks or on the street. Speculators had ruined things for everyone, gambling on margin.
Then beginning with Roosevelt, we built the foundation for our best period of broadly distributed prosperity. Rich and poor alike were well served. Starting with a generous booster shot, the money started flowing again… which it did NOT during all the time laissez faire capitalists were urging us to just leave it alone, saying that given more time it would come back on its own. But after four years (1930-33) it had yet shown no signs of reviving by itself.
Those are facts we derive from direct evidence. As Robert Reich describes it,
“America emerged victorious from World War II, already having survived the Great Depression, with both its economy and its democracy in good working order. Then it experienced unprecedented prosperity, widely shared. It was not quite a golden age– women and minorities were still relegated to second-class citizenship, and communist witch hunts scarred politics– yet every income group and social class gained ground, inequality of income and wealth declined, and a far larger middle class emerged.”
The truth of his words can be demonstrated in as many pages of charts of economic performance as you choose to look up. To tear down that body of knowledge, you’re just using some body of theory from a schismatic group of renegade economists.
We are most of us getting poorer in the more recent period, 1982-present, because income inequality has been growing. That is, a tiny sliver among us, the top one-half to five percent, have been growing immensely richer, while the mass of us, measured in terms of our buying power, grow very slightly poorer with each passing decade– or at best just see no growth at all. Again, please look this up in the econometric charts. I would feel better if you did.
I have taken the time and trouble to very seriously consider the points being advanced on these pages. And I’m seeing very little I can actually “take to the bank”.
“There was no government interference to speak of during the 1920s, up to Hoover’s exit.”
really ? check again
Taco: Harding, Coolidge and Hoover were all do-nothing, laissez faire presidents, inclined to let both business and banking have their own heads without constraint. No meaningful regulation occurred under any of those administrations.
http://www.enotes.com/1920-business-economy-american-decades/government-business
Should you disagree, give me some citations.
http://mises.org/rothbard/AGD/chapter7.asp
Your article doesn’t describe anything much in the way of concrete programs on Hoover’s watch. As president, he may have thundered and pounded the pulpit, assuring the public that he had some sort of program to end the Depression. But about the only accomplishment during his tenure was to wait from October, 1929 to January, 1932 before he even got Congress to approve creation of his Reconstruction Finance Corporation, designed to make emergency loans to illiquid companies in the princely amount of $500 million (with authorization to expand to a cap of $2 billion). It failed to start funds flowing again.
There is evidence that had the program been allowed to expand well past the $2 billion, it might have done a lot of good. But it was too little, too late.
It also suffered from precisely the same malady that afflicted our more recent Troubled Asset Relief Program:
“Democratic politicians argued with some justification that federal assistance was going to the wrong end of the economic pyramid. They believed that recovery would not occur until the people at the bottom of the heap had their purchasing power restored, but the RFC poured money in at the top. To many Americans, the Reconstruction Finance Corporation was viewed as a relief program for big business only.”
http://www.u-s-history.com/pages/h1523.html
But you’re right, it’s not as though he did absolutely nothing. He just failed to do enough to make any difference:
“Hoover rejected the Coolidge-Mellon imperative to keep the federal government out of active participation in the economy — a plan that worked well during prosperous times, but not during a major depression. Hoover first stressed voluntary action by business and labor to keep the economy functioning, but the continuing deterioration of conditions forced a change. Hoover allowed the government to become the source of funding for construction and relief programs, but he rationalized this departure by developing self-liquidating programs and having state and local authorities administer them.
“Finally, at the end of his administration, the formerly confident Hoover was a beaten man. He had been overwhelmingly defeated at the polls, unemployment continued to soar and the nation was stilled by a major bank crisis. As he waited for Franklin Roosevelt to take office, Hoover was tired, bitter and out of ideas.”
” They can’t print prosperity…”
just printing wont bring prosperity but spending what you print might, right??
i thought i saw info at hoover dam that said it paid for itself many years ago.
dam building has been going on for many centuries because it works for people and beavers.
“”Gentlemen, you are piling up a heritage of conflict and litigation over water rights, for there is not sufficient water to supply the land.”
– John Wesley Powell (explorer)”
this doesnt mean much. and i dont know if it is even a true comment. for 2 people there may have been plenty of water.
” and more water won’t magically appear if they dam a river.”
this is sort of duh. water wont magically appear but it much can be stopped from flowing to the sea and stored and maybe mitigate flooding some areas. also provides for new recreation from what it takes away. ie, boating and swimming where you dont hike anymore.
some keynesian stuff may be bad and some may actually be a benefit. the hoover dam itself may have just been a benefit.
beavers ain’t keynesians. production comes before consumption.
Hoover Dam produced jobs, produced electricity and produced Las Vegas and southern California. It’s responsible for a lot of new wealth that didn’t exist before.
Hoover nee Bolder Dam paid for itself years ago.
so did the fed.
Besides those other things being unsustainable(farming,development,etc.), what of the upkeep? As money dries up along with the water I can see this monstrosity becoming a literal disaster waiting to fall apart.
Holy Molly,
I was in Vegas a little over a month ago after touring the Ag part of California, and took the Dam Tour (The $30.00 Tour). I kept thinking the whole time, something I wouldn’t have done 5 or more years ago, about this being a “Engineering Feat of Socialism”. I remember in one of the rooms they had all the propaganda jollying up the Dam as the Great Savior. And there was an illustration of I believe 3 people and there viewpoints about the Dam project. They had the two Statist types decrying it as, obviously (A Great Savior) for the Southwest, but they had one fellow very skeptical about it, saying something to the effect that he felt sorry for those people there, but it wasn’t the govt’s place to undertake such a project. I kept thinking that he was a person of the Old Right or Classical Austrian. Maybe a Henry Hazlitt or LVM type.
Thanks Mr. French for this article. I kept wondering if anyone would hit this topic, especially after my visit there. Thanks again.
Useful article, Doug; thanks!
However, it seems to me that you missed two important topics:
- ongoing and expected climate change is already exacerbating the problems invited by the dam and the economically irrational water pricing arrangements that are setting us up for a fall:
http://mises.org/Community/blogs/tokyotom/archive/2008/05/14/bad-news-and-needed-institutional-change-climate-change-water-and-water-rights.aspx
- the vast theft of water from downstream users and damage to the Colorado delta (damage done to interests of Indians and Mexican just never seemed to enter into FDR’s calculus).
Finally, let me note briefly that there are useful libertarian discussions of Western water rights by (i) the free-market group PERC.org in Montana (founded a few decades ago by John Baden (a Mont Pelerin member) and Terry Anderson (Hoover Inst): http://bit.ly/brrZvh (and (ii) by Case U law prof Jonathan Adler: http://bit.ly/beC8Pz
Regards,
TT
There’s a joke by Woody Allen. My parents were reformed Jews. Really reformed. They were Nazis.Tom, tomodachi, why don’t you drop the pretense?You are as much a libertarian as Woody’s parents were Jews. You attack and uproot capitalism at its very heart, due to this emergency, and that inequality. What use are your musings and a billion more just like you to anyone, you lasso and unhitch the steed of entrepreneurship and put in its place your beautiful trojan horse of recyclable driftwood which takes us… NOWHERE!The only equality that can be offered is for all to be treated the same under the law. Rich man poor man men of all race and circumstance. Indians and Mexicans have the same remedies as the rest. The trouble most likely is the very top of the pyramid where the top Indians and Mexicans screw over all the rest. Govt calculus only gives vague answers that have no real world application. Read Mises Economic Calculation Problem and understand that nothing you concoct works until the dictator’s lash whips us while we push your wooden Trotskyite horse down the Road to Serfdom and they ride inside.
AJN, your God-like ability to read past people’s words and into their very thoughts — where does it come from? Aaah, since you passed the Pearly Gates?
French’s argument is weak. He did not even do a cost benefit analysis. A better argument would have been if a private company built and managed the dam, the results might have been much better.
That would, of course, call for speculation. No matter the source of funding, a given project design may either be a money maker or a money sink. There’s no general rule on the profitability of a given plan due to its source of funding.
He DID mention malinvestment. Where would the resources that built Southern California, Las Vegas, and Arizona have gone if it weren’t for the dam???
You’re forgetting your Bastiat.
“Where would the resources that built Southern California, Las Vegas, and Arizona have gone if it weren’t for the dam???”
So, Nick, are you saying that NO investment can be evaluated as being a good one, because we’ll never know whether there might have been a better one? That approach would seem to tell us we can never hope to quantify anything.
Hoover Dam was a “dam” fine investment because it performed incredibly well for us. It created a stomping ground for millions of wealth-creating individuals. If the money that built that dam had instead gone into, say, Czarist Russian railroad stocks, it would have been a total loss.
There is plenty of water in the sea for all the land of the earth to be settled. It can be done very economically with dual use nuclear plants that use the heat of nuclear reactions to boil sea water into fresh water and another pool of water into steam for an electricity turbine.
The Malthusian resource concept comes from the era before mass conversion was known. The chemical energy we see around is, in fact, constantly melting away. But a far more powerful force is pumping more down to our level of the system. By harnessing nuclear energy our supply of biological materials is only limited by the quantities of the constituent elements. H, C, O, N, P, K and all the good stuff mixed and matched into whatever we need. The fruits are even great combined with genetic engineering.
On a lighter note, this could be an alternative to legalizing weed to save the California economy:P
The Malthusian concept is that if you double the food supply yet the population doubles then you’re back to square one.
MICHAEL: “The next question is, will we be throwing up another Hoover Dam any time soon?
The answer to that one is NO. The 1930s are very over, and with them all those giant hydroelectric projects we used to see. Dams now are being decommissioned just as fast as they can be. So this discussion is pretty much just idle chatter.”
OMG, The Army Corps of Engineers, The Department of the Interior, The Bureau of Reclamation (WreckTheNation) remain filled with many thousands of bureaucritters scampering around their offices and the country who thrive on building dams and coming up with other PLANS and diagrams on how to spend OPM (sounds like opium, is equally addicting, stands for other people’s money), acquire more power and prestige, and ensure their own welfare. If you think their dam-building days are over, you fail to understand the bureaucratic mind and the bureaucratic method.
MICHAEL: I live in Tennessee. TVA was and still is a blot on this area’s history. Lots of poverty and, worse yet, government dependency can be traced directly to TVA–if you haven’t been brainwashed into thinking the New Deal saved America from the Great Depression. If it wasn’t for Hoover and Rooosevelt’s adoption of Keynes’ insane–he was insane, you know, or would know if you ever tried to read his GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY. As a result of those policies of government intervention in the economy with projects such as Hoover Dam, CCC projects, etc., the recession that began in 1929, and which was caused by previous government policies of interference in the economy, would have been over by 1930 or ’31 at the latest and there would have been no Great Depression. Roosevelt’s New Deal kept the nation in Depression and at war for all of his years in office–and then on into Truman’s years. When you talk of the good things that TVA and other such projects did, you obviously ignore the great damage in suffering and death the New Deal caused. However, if you stick around this site and read some of the books that are recommended to you when you spout the propaganda of the federal government, you will be on your way to enjoying a degree of personal freedom and individual integrity that you may have thought was impossible.
The Hoover Dam was a miracle. Consider that FDR was elected in 1932. The dam broke ground in 1933 and construction was completed in 1935. There isn’t a prayer that any project of nearly that magnitude could happen in that time frame ever again. How many “shovel ready” major projects do you see underway right now?It is easy to second guess the decisions of others. From our viewpoint, with the knowledge that gazillions of people have moved to the area (it was pretty desolate in 1933), it is easy to say the dam unsustainable. However, the residential population of the area were cut in half, it might be. In any case, we don’t need to worry about another Hoover Dam in today’s environment.With this said, it would be really helpful if our government would take a leadership role in reducing our requirements for fossil fuels. Nobody else can do it. Having hiked through 700 miles of the desert southwest, I can tell you that our government owns thousands upon thousands of acres of land in the south and southwest – not counting all the southern military bases. That land is inhabited by very little. Converting significant portions of that land to wind and/or solar power generation would go a long way to providing both near term jobs and creating economies of scale in these industries as well as reducing our fossil fuel needs.There is also a distribution grid, which has been deregulated since Reagan, which is in need of some serious work. Private companies in a free market are driven to optimize the use of their capital. They will not invest in the excess capacity required to provide a margin of safety in the event of an emergency or “black swan” event. For example, they won’t invest in the additional refining capacity needed to cover our gas requirements but having minimal capacity leaves us very vulnerable.When the free market will not insure the survival of the energy resources on which we all depend, government must take the point. This kind of capital investment isn’t Keynes v. Austrian school. It is private sector earnings v. public good. The debate is really around what is the public good. Who among us would argue the economic and social benefits of the Interstate Highway System – a government project envisioned by man who worked his entire life in government – Dwight Eisenhower.So when we have great blackouts or the price of gasoline skyrockets due to lack of refining capacity, will we damn the private sector and the free market? Or will we learn that there is a role for the private sector and one for the government and debate the extent and boundaries of those roles?
I think that oover Dam’s impact on the economy was that it cost the government so much money to make the dam so they were looking for ways to save money. It was proven that after the dam was made it brought more people to Las Vegas to see the Hoover Dam and more people equals more money. Even to tis day tere are many tourists that come here to Vegas to see te great Dam.
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