10 October 2010

Cheap, abundant energy

This essay by Matt Ridley in Cato Unbound develops two key points. Note: he is using the word "liberal" in its historically correct meaning, not the US euphemism for rent-seeking statists now adopted by British lefties.
There have always been liberals, who want to be free to trade in ideas as well as things, and there have always been predators, who want to extract rents by force if necessary. The grand theme of history is how the crushing dominance of the latter has repeatedly stifled the former. . . The wonder of the last 200 years is not the outbreak of liberalism, but the fact that it has so far fought off the rent-seeking predators by the skin of its teeth.
His explanation?
The more I study the Industrial Revolution’s failure to peter out, the more convinced I become that energy is crucial . . . The point about fossil fuels is not that they produce special energy. With suitable machinery, there is nothing that coal can do that wood, wind or water cannot. Nor is it that the British discovered coal and everybody else missed it. The point is that fossil fuels were the only power source that did not show diminishing returns. In sharp contrast to wood, water and wind, the more you mined them the cheaper they became. Energy amplifies human work, and Britain found itself able to amplify the productivity of its labour long after its population and its technology would have exhausted all other sources of power. Fossil fuels therefore kept the innovation machine running so that profits from commerce just kept ahead of profits from [predation].
Hmm, yes. But they also kept ahead of domestic predation because of uniquely English laws enshrining individual property rights that date back at least as far as the early 13th century. See Alan MacFarlane’s ground-breaking The Origins of English Individualism, and other works including this fascinating article.

And those rights were able to develop as they did because of the English Channel and the Royal Navy, which kept foreign predators at arms-length while protecting and extending international trade.

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