Of Clean Energy and Creative Destruction…

Clean renewable energy – the need has never been more urgent and the goal always seems to be tantalizingly unreachable.

But why?  Jimmy Carter was trying to get alternative energy studies funded back in the dark ages of the late 1970s.   Why has it been so ridiculously tough to get alternative energy studies funded?  Is it because clean and renewable energy is nothing more than science fiction?  Do we need to consign renewable and clean energy to the same category as Star Trek’s warp drive and “beam me up, Scotty” transporter fantasies?

The fact is, we STILL don’t know how practical  solar, wind and other forms of clean energy can be  because we literally have been prevented from finding out.  The reason for this is fear.  Powerful forces fear the results. They are very fearful that some forms alternative energy will be successful and replace their hydrocarbon based industries.   Creative destruction of their industries is their biggest nightmare.

Creative Destruction in the Elizabethan Era:

Perhaps the best way to understand creative distraction in the 21st century is to crank up the time machine back to England’s Golden Age.  In their excellent book Why Nations Fail, Daron Acemoglu and James Robinson take an exemple from 16th Century England where inventor and potential entrepreneur William Lee, ran smack up against creative destruction.

Back in the 16th Century, Queen Elizabeth issued a ruling that her people should always wear a knitted cap.   Lee noted that “knitters” were the only means available to produce the needed caps, but that the process was slow and production was lagging.

So he invented what amounted to the first knitting machine.  He eagerly traveled to London for an audience with Elizabeth I to show her his invention and to secure a patent.  Queen Elizabeth was less than enthusiastic.  “Thou amidst high, Master Lee.  Consider thou what the invention could do to my poor subjects.  It would assuredly bring to them ruin by depriving them of employment, thus making them beggars.”  The King of France had a similar response as did Elizabeth’s successor, James I.

Were these monarchs so concerned about the fate of their subjects?  Perhaps.  But it is more likely that they were more worried about the political instability that such a massive displacement of workers would create. The invention had broad implications.  After all, it was the first critical step in mechanizing textile production.

That is the downside of creative destruction.  It takes away jobs in the short-term, but often leads to new jobs and new industries in the future.

There are powerful interests throwing roadblocks into alternative energy:

We can well guess what they are.

Both the corporate elites in traditional  energy industries such as oil and coal and industry employees have joined in an unholy alliance. Their sole goal being that we never find out how doable alternative energy could be.

The fact is that right now many of these alternative energy sources are not competitive with the more traditional carbon burning sources such as oil, gas and coal.  Putting solar panels on your home may feel like the right thing to do for the environment, but trust me, it is not cost effective – at least not in the north-east where I live.  Been there, done that.

So the standard argument that carbon burring industries push is that we can’t do what isn’t doable.  People have tried and failed to make these alternative sources profitable and cost-effective.  So therefore the ideas and research should be mothballed and consigned to the grave of good intentions and science fiction. The message is clear:  Stop trying. Stop throwing good money after bad.  We need to resign ourselves to a hydrocarbon burning future and a much hotter planet.

Of course, if you work on an oil rig or in a coal mine, or if you are a CEO or board member for the likes of BP or Transocean, this is music to your ears.   You are making money from an established industry and want to continue to do so.  Never mind that the industry may destroy the planet, that its polluting the air, our oceans, our aquifers and warming the planet to a point where massive climate change is now inevitable. It doesn’t matter to them that their “extraction processes” have caused illness and perhaps death to both people and wildlife.

For the corporate elite, the benefits are obvious.  They are raking in the dough and want to continue to do so.  They have  a great lifestyle and do not want to hear that what they are doing is dangerous for people and the planet.  For the workers doing the dangerous work in the mines and on the rigs, the danger is offset by the reality that  they are not trained to make reasonable money in anything else.  If you are a coal miner and we stop harvesting coal, what are you going to do?  The specter of environmental catastrophe a few generations from now seems remote when putting food on the table is your biggest concern.

If you don’t fund the projects – the the potential products  will always remain out of reach. 

So, it is in the best interests of some very powerful groups that new technology be quashed.  The fear of creative destruction within their own industries is the driving force. Lobbying power is their weapon of choice and the smaller fry trying to get a great idea off the ground don’t stand a chance.

The argument offered by these strong political interests is circular at best.  They seek to BLOCK public funding for basic research saying that it is not “profitable”.  This is a canard.  If you block the research, no one can find out what is doable or profitable or not.    Nothing is profitable from the get-go.  The initial R&D costs money and can take years.  We invest in such things in order to invest in our nation’s and the world’s future.  The profitable rewards, the new jobs, the new industries, that comes later.  But all of that…ALL of that is born on the shoulders of an initial investment that gives little thought to the bottom  line.

Alternative Energy and the Obama Stimulus Package….

One little known fact of the Obama Stimulus Package was that it was jam-packed with funding for alternative energy.  In his book The New New Deal, Michael Grunwald described what was in the stimulus.  It opened a door that had been slammed shut for years.  Alternative energy had died on the vine decades ago along with the Carter Administration.  It provided money for biofuels, smart grids, solar and much, much more. Grunwald goes on to say that although many ideas will die on the vine (such is the nature of R&D – particularly in the “R” phase) they monies have been well-spent and we are already reaping some of the benefits of smart grid technology.

Yet few people understand the implications of this.  The talking heads in the energy sector  as well as Mitt Romney plucked out the failures and misrepresented the rest.  R&D is risky.  So focussing on the failure of Solyndra was ridiculous and just their way of protecting  their own interests  by delegitimizing the everything green or alternative.   They want the baby to be thrown out with the bathwater.   FactCheck.org had a very interesting summery on Romney’s “whoppers”  on the stimulus and alternative energy spending. They also had an interesting summary of conspiracy theory propagated by email by conservative PACS.



This grinds big “I” innovation to a screeching halt.  It cheats us now and really cheats  the next generation of future technology.


Creative destruction is necessary…it moves us forward.  What we need to do is soften the blow for those workers who are displace by training them and finding them work in the new, emerging technology that is replacing the old.

© 2013 – RGHicks – http://ReinnovatingAmerica.com – All rights reserved.


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