Socialist planning requires that those who would undertake it hold information that they do not have and to which they cannot realistically aspire. In an uncertain world, successful economic development – whether directed towards economic growth or environmental friendliness – is piecemeal, tentative and adaptive.
Last week we held a school meeting to tackle the disturbing problem of childhood obesity. The jolly headmistress put forward a plan by which we should all subscribe to a binding target that the children will reduce their average weight by five kilos in five years’ time. George, the school bully, disagreed. George said the targets plan was purely rhetorical and the operative date so far in the future that it relieved everyone of the burden of doing anything now. We would do better to focus on policies rather than statements of aspiration and undertake research and analysis of why children were so fat and what could be done about it. But George is less fractious since the Iraqi gang started teasing him and we all went away having strongly agreed to consider losing weight.
The rest of the world berates the US for failure to ratify the Kyoto treaty but it makes little difference whether countries adhere to the treaty or not. Apart from the estimable Swedes, the only important countries likely to come close to meeting their carbon reduction obligations are Britain and Germany, and these for unrelated reasons. Margaret Thatcher took revenge on the union leader Arthur Scargill by closing coal production and market forces shut down the polluting heavy industry of the old communist provinces. The carbon emissions trading scheme borders on farce, doing little to reduce emissions but providing a subsidy to emitters.
Angela Merkel, born in the east, would surely recognise the problem. Planners at the centre, conjuring targets from the air and marshalling stage armies of workers and resources, were distant from the realities of what was happening on the ground. That dissonance leads to a frame of mind in which every failure is the preliminary to yet more heroic declaration. The general reaction to Kyoto’s operational irrelevance has not been to ask why the agreement has failed to achieve its aims but to assert that we must embrace still more ambitious goals in a successor treaty. It is boorish of the US to point out that this is humbug, but their offence is to articulate what any sensible person should feel.
Energy, along with agriculture, is the last home of the methods of socialist planning. Agriculture exemplifies micro-management, in which yet more complex measures follow from the unintended consequences of earlier plans, and carbon trading promises to go the same way. Energy offers an irresistible temptation to engage in long-range planning because of the extended lead times associated with investment in both production and consumption. All such planning requires that those who would undertake it hold information that they do not have and to which they cannot realistically aspire.
Britain is still paying for the massive programme of investment in electricity generation begun in the 1960s, forged in the then prime minister Harold Wilson’s “white heat of technology”, language reminiscent of Mao’s great leap forward and with results only somewhat less disastrous. The plans ran massively over time and over budget, which mattered less than it might have because the capacity was not needed anyway.
The antidote is modesty of aspiration and acknowledgement that many uncertainties cannot be resolved. Britain, perhaps alone in Europe, has learnt this lesson about energy policy, even though the preoccupation with climate change has revived the delusion that computer modelling can allow us to describe the future. New investment has been small-scale and incremental and has required no leaps of faith or technological breakthroughs. So it should remain. In an uncertain world, successful economic development – whether directed towards economic growth or environmental friendliness – is piecemeal, tentative and adaptive. That is why we should not allow Europe’s energy needs to be planned by multinational, multi-utility behemoths or set a target for the temperature of the world. It is also why when people tell us what the planet will or should be like in 2050, we should recall how large and unforeseeable have been the economic, political and environmental changes in every 50-year period for the past several centuries.
