Episode Transcript
Speaker 0 00:00:00 I wanna welcome you all to morals and markets. So glad that you're here, everybody people are showing up early this week. Dr. Salzman, I think that's a good sign.
Speaker 0 00:00:10 I think we have some people who might be un-muted. So when we're, um, when Dr. Salzman is talking, and then if you're not talking, try to keep you to just so that we don't have any feedback. Um, but I want to just do, before we get started on our podcast intro, cause we will upload these as a podcast. So if you are listening on the morals and markets podcast, I hope that you like subscribe and share with your friends tonight. We are doing how the war on fossil fuel fuels war. I think this is obviously a super salient topic, super excited to hear Dr. Salesman's comments. Uh, and I guess with that, Richard, I'm going to hand everything over to you
Speaker 2 00:00:44 Abbey. Thank you. And welcome back to morals and markets we've been going, I think more than a year now. And, uh, the whole premise of morals and markets is, uh, well, most people don't think morals or morality have anything to do with the rather technical subject of economics. And I differ, we differ, I teach at duke a, in a PP and E program and P P and D stands for philosophy, politics and economics. So the idea is, is very difficult to understand today's complex world without coming at it with these different facets. If you only do economics, you're not going to get it all. If you only do poly psy, you're not going to get it all. If you only do morals, you're not going to get it all. I just wanted to start tonight. The reason I picked this topic, um, if you know what a Venn diagram is, you know, that there are circles and they overlap, and this is perfect as a BP in a topic because it's part energy policy or economic policy, if you will part foreign policy.
Speaker 2 00:01:40 But I'm also making a point about war, which in a way is military strategy, military policy. But I thought, and I haven't done this before Abby, but I thought I would start doing this. I do give an abstract, you know, on the website. Then I thought for listeners who were only going to hear this as a audio, that I would just read the abstract, at least to read, like read it into the record. So people know like what I'm going to talk about. So, so here's what I said tonight. And then I'll leverage off of that and turn it over to comments and questions. So my summary was increased global reliance on increasingly expensive oil and gas from Russia has fueled as fuel foreign aggressions as was true of the oil rich middle east despots in the 1970s, Russia, biggest ally has been environmentalist's who being anti-capitalist have opposed precisely the energies that best power capitalist infrastructure.
Speaker 2 00:02:40 What are they? Fossil fuels and nuclear energy instead of advanced economies using these abundant cheap, say reliable energy forms, environmentalist or preferred reliance on medieval pre-industrial forms when some biomass, perhaps because they know that capitalism of today and the global population of today would perish. If we had a widespread use of pre-industrial energies. Now that's a pro that's the end of the abstract. It's a prop provocative claim, of course, but I think one of the reasons this deserves a Venn diagram, if you will, is think of how difficult decisions this is part, energy economics, part foreign policy, part war, and predicting war. So let us, let me get, just give you some thoughts. The war on fossil fuels. What is that? Well, it is a multi-decade assault on the idea that fossil fuels are not only evil, but ruining the planet. And it isn't, you know, this, it isn't, if you're a student, you know, this, isn't not just the argument from externalities.
Speaker 2 00:03:54 This is not just an argument from pollution because actually over the last few decades, and I don't think it's actually due to pollution laws. Um, the principle of what's called energy intensity, uh, the use of energy and producing output, uh, energy intensity has declined enormously, and you would expect this from a profit seeking energy sector and, uh, economy. People obviously want to economize on energy because it's a cost of production. So while the environmentalist and the preservationists and others are trying to preserve natural resources, that's already been done by and is being done by profit seeking companies who obviously don't want to use too much energy. And they have found greater and more efficient ways of using energy and still producing more and better goods. So that's just as a point that capitalism itself is not scarfing up all the resources and eating up the planet and you know, a shortening of lifespan, nos, no such thing as happening. It's just not true. And, uh, that's due to capitalism and the profit motive and private property. Now, the other thing I wanted to say is we really need to question this idea of, and you hear this all the time. What should our energy policy be?
Speaker 2 00:05:15 Imagine someone who says that, who is wait, what is our energy policy? The no government, certainly not the United States government. If it's a free country and driven by the constitution should have an energy policy. Just like it shouldn't have a, I dunno, an agricultural policy meaning what, what food to produce, how much who gets it, that central planning, it shouldn't have a housing policy. It did have one a decade ago and it ruined the housing market. The idea of essentially plan unified policy, you know, deciding things like what should the energy mix be? Well, how many electric vehicles? And this is something in a free country that markets and consumers and producers should decide as long as no one's exploiting somebody else or polluting somebody else or harming somebody else. It should be left for the free market. But we know there's an energy department, uh, in the U S and we know there are energy agencies, uh, controlling this.
Speaker 2 00:06:18 So it's just improper. It's not proper at all in a free market system. We do have this today, but the question now is what is it actually in function doing what it's actually doing? And this is really quite shocking. If you think about the implications is trying to strip the current industrial capitalist systems of the energy it needs. Now, if I told you that human beings need nutritious food, properly, balanced diet, certain amount of water, clean air and water. And that is on, that is not disputable, right? It's like, well, that's the optimal habitat for human beings? Well, NEMA, let me transfer this to what is the optimal energy source for machines, not humans, but machines, meaning factories, equipment, robots, automobiles, things. We've created things that are mobile, things that are moving like we are, but they don't ingest food. They ingest energy. And what energy do they most ingest fossil fuels and nuclear power, even in the U S I think maybe only 4% of the energy comes from the ones.
Speaker 2 00:07:33 Environmentalist love 4%. So they hate 96% of the energy fossil fuels plus nuclear that is energizing capitalist equipment. Understand it's feeding machines created by an engineer. So I want an analogy understood here between food, for humans, energy, for machines, and they know this, they know this may be even better than pro capitalists. They know what machines need and factories need to operate. And they're literally proposing that they be starved. It's no different than them proposing that human beings be starved by not having the food and sustenance they need. So that is the war on fossil fuels. I know that it's disputable. We can argue about it after I finished, but, um, I don't believe that has anything to do with keeping the earth sustainable. I don't think it has anything to do with clean air and clean water cause capitalism delivers those kinds of things.
Speaker 2 00:08:34 It has nothing to do with the longevity of life. The health of life capitalism does all those things, hygiene, cleanliness, eradicating diseases, capitalism does all those things, environmentalist and their policies do not. Now, uh, let me shift now to, okay. If there is a war on fossil fuels, which I think there is including ways of restricting Americans and others in Europe, they do this as well. It's not uniquely American restricting the freedom of people to produce and companies to produce fossil fuels and forcing them instead to pursue non-economic non efficient, uh, very costly, very unreliable alternatives. Here's the, here's the cinch other countries who, and this is the irony in a way other countries that are not as free, we're becoming less free, especially in energy, but think of this from the 1970s onwards or for about 50 years, less free countries, ironically enough, do produce fossil fuels are unabashed about it.
Speaker 2 00:09:48 There is unabashed about it as like a good, solid pro freedom capitalist countries should be. So who am I thinking of here? Middle east, Saudi Arabia, um, Russia, especially after the cold war ended in 91, uh, Venezuela, and till it nationalized all the oil industry. And now that doesn't produce a drop of oil at all, they have the biggest oil reserves in the world and ruin their oil industry by nationalizing it point is though, um, the us does not really have an economic system that can survive on quote unquote renewables. It doesn't. And it knows that, and the environmentalist know that and they don't care. They're they're not saying, wow, this is really terrible. Gas prices are skyrocketing. Oil pipelines are being shut down. And as the Biden did the first act in office, shut down the XL pipeline. Uh, uh, so they want this to happen.
Speaker 2 00:10:49 They want to see, even if it's artificial, which it is skyrocketing fossil fuel prices in the seventies, they used to say skyrocketing, fossil fuel prices were due to running out of fossil fuels. That was a joke. That was never true. It's been something when we so bet, you know, the whole peak oil thesis is just not true. A lot of that was due to inflation, lots of oil and gas and coal had been produced since then. That's not the issue. They want these things to be inexpensive so that people are just more expensive, uh, what they call renewables. Now, the one thing that's interesting is if people are complaining today about the price of the pump and the Oprah and other things, think of the fact that it's still yet has not become competitive views renewables. What does that, what does that mean? Renewables are so expensive that even at $4, a gallon, $5 a gallon gasoline, that's still cheaper than the environmentalist energy source. So that is just a, it should be just an indication to people how expensive, not just expensive. The environmentalist policy energy mix would be, but it wouldn't just be an issue of expense. It would just be an issue of things would shut down. You will get blackouts, you will get brown outs. They don't really care. They would prefer that as long as the capitalist system was shut down.
Speaker 2 00:12:19 Now, just a story, uh, to concretize some of this last week after, Uh, imposing sanctions on the import of oil from Russia, The U S went begging to Saudi Arabia, which is a dictatorship in a way that Russia can't even think of Saudi Arabia is a true despotism. Gluten is not. Then they went to Venezuela, which is a true despotism and has been for 15 or 20 years with Maduro. And prior to that, his buddy Chavez begging for oil. Iran is also on that list. The us is in the process of begging for oil imports. I ran as the biggest sponsor of terrorism in the world today. This is how crazy things can get. When a government spends decades suppressing as best. It can. The local energy industry, you become dependent on energy sources, abroad. Your economy is not equipped to go off fossil fuels overnight. You start begging despots for oil, and it undermines it erodes your foreign policy. It has to Now. So let's turn now to us foreign policy. I don't want to spend as much on this because I've had other sessions on this. Uh, us foreign policy is a complete disaster.
Speaker 2 00:13:48 When you combine this with the U S energy policy, it's a double disaster. So they not only have messed up the whole energy thing. They've totally messed up foreign policy. And now the two are coming together in the Russian Ukraine war. Now, have they messed up foreign policy? I'm not going to go through a long litany. I've had sessions on this before the U S has not won a war since world war II. I think of that, it's been in about four or five of them. And as one, any of them as lost all of them, the most recent, the most outrageous was the loss to Afghanistan. It took 20 years for the U S to get in and get out of Afghanistan. And when it left, it left the Taliban, which is the enemy in place and stronger than 20 years earlier and left them $83 billion on the ground at Barbara airport of us military material.
Speaker 2 00:14:47 It was the most disgusting military performance in us history, and it was done under Biden. And partly I have to say Trump, but anyone over the last 20 years includes Bush Obama, Trump Biden. So this is not a partisan comment. This is a bipartisan comment that the us military for philosophic strategic and other reasons is unwilling to win wars. I I'm, I'm a pro-American America first guy. So it saddens me to say such a thing, but the, but Korea was not one. Vietnam was not one. The Gulf war were really was not one because we just pushed Saddam Hussein back over the border into Baghdad. So the initiator of force in Kuwait was left in power. That's not a victory. Uh, Iraq was turned into a ran incredible, uh, ran is a theocracy and hates America and is trying to develop a nuclear weapon. When the U S went into, uh, Iraq and overthrew Saddam Hussein, you would think after that, they thought they would get Liberty.
Speaker 2 00:15:53 They've got another theocracy. That's what Iraq is. Now. It's another theocracy, almost as bad as a ramp. So not to be a dead horse, but we have two problems here. We have a U S energy policy, which itself is an act of violence against free energy producers, which has made the United States reliant on energy production from at least three or four despots. And then on top of that, it doesn't know what to do. And it bumbles its way into military conflicts abroad. We're just not willing or able to win. I can't think of a worst policy combination than all of that, not to be too. And, and we can talk more about how this is happening in Russia, Ukraine. Um, I'm going to end on a positive note after this decide to suggest what could be done differently, but let me just suggest that in the Russian case, if you know your history, you know, that the Soviet union ended in 1991, thanks in large part to good American energy and foreign policy under Reagan, under Reagan and the first Bush under in Britain under Thatcher.
Speaker 2 00:17:12 They weren't pure capitalists, but they were pro capitalist and they move both countries in the direction of capitalism. What was the result? The us energy and UK energy skyrocketed, including fossil fuel energy and the Soviet union was vanquished. The Soviet union came to an end. The cold war ended 1991. After that, um, Russia did become, although not perfectly. So an economic case is as did China, that none other words, their focus was more on let's produce stuff. They weren't very good at it because had a long history of, of Marxist economic policies, but their goal was not to vanquish. The west. Militarily has as had been true under the USSR and red China. And I believe the United States should have cultivated that better than it did it. Hasn't done that. I've talked about NATO, expanding eastward and threatening Russia. I don't want to focus on that entirely tonight, although you're welcome to, but let me just suggest something about the energy part of this story, which no one's focused on.
Speaker 2 00:18:23 If you go on Google, you can find a map of Russian energy pipelines running to Western Europe. I know that sounds kind of geeky, but they exist. So now think of this. Russia produces energy and natural gas pretty well, way better than the U S does until recently. And they try to ship it to Western Europe. This is not an act of military invasion. This is an act of trying to sell energy in a way that most American energy experts hate because it's fossil fuels. There are dozens, even hundreds of pipelines running under Ukraine, Russian pipelines, running east, uh, westward over Ukraine into Western Europe. That's why as one of the reasons, not the only reason, that's one of the reasons Ukraine is very important to Russia. They believe that if Ukraine is mismanaged, as it has been, if you crane is corrupt, as it is even under Zelensky, if it becomes becomes under the control of NATO, as NATO has been threatening for at least since 2008, that Russia's pipelines through to Europe will be compromised.
Speaker 2 00:19:38 Maybe even destroyed, maybe even taken over now, knowing this guess what the Russians did. They said, we need to bypass Ukraine. We need to build a pipeline called north stream one that goes past Ukraine up through Belarus. If you know your map, you can look at this out under the Baltic sea. It's not even on land. It's under the Baltic sea and the Baltic countries, as you know, are in NATO. It's trying to get its energy into Europe. It's not sending its troops into Europe. It's for DEC for years, trying to get its energy freely sold into Western Europe. And what has NATO and what has the web, what has America done tried to block these pipelines? So just like Biden and Trump did this just like Biden shut down the, um, Keystone XL pipeline. They've tried to shut down the pipeline of Russia, selling energy to Europe.
Speaker 2 00:20:36 And, um, the reason there is a Nord stream pipeline through the Baltic sea is because Russia fears that it will lose Ukraine. It will lose the ability to freely send its energy under the ground, through pipelines in Ukraine, through on to Europe. So you see how I say this only because I only have a few more minutes to myself. I see it because it's an interesting topic because energy policy, you see here interweaving with foreign policy and interweaving with military outcomes. And so it's not easy to, uh, weave all these things together, because if you think about it, most people specialize in one or the other, and you'll notice this. And I find it difficult even for myself. I mean, I'm an economist. I teach in poly PSI. I do teach a PP and a, but I know that each of these realms is a specialty in a way, on the other hand, if you don't have the big picture of how they all interrelate and relate to one another, you're going to miss.
Speaker 2 00:21:41 I think you're going to miscalculate misinterpret. What's going on now from the standpoint of, uh, military officials, energy officials, presidents, uh, NATO leaders. It, I'm not very confident that they either will get it right. CV entire context have the right advisors in the room. And not because they're adults, although some of them are adults and Biden as a complete Dota art. That's kind of scary. Gluten is not, it makes the whole thing much scarier because these many of these people do not know what they're doing. And they do not think through the implications of what they're doing. So I'll stop there. But that's my theme. I think the war on fossil fuels, which is undeniable, is starting to bleed into, you know, this is not unrelated to why there's war type stuff going on. Um, it isn't just, powerplays, it isn't just stuff like, which I don't believe.
Speaker 2 00:22:46 You know, Putin is trying to rebuild the Soviet union or Putin is trying to become the news are Nicholas from 1917. That's nonsense. That's ridiculous China and Russia and Graham, I really want to hear from you on this, cause I know how smart you are and we don't necessarily agree, which is nice. But I think China and Russia have strengthened themselves since they threw off 100% pure despotism under Mao and Brezhnev. They're not free countries, of course, but they have, I think learned the lesson that you cannot become a military power unless you're an economic power. So they're trying to become an economic power. And, uh, and so they could be more dangerous because they're economically more viable and to have more support for their military than they used to. And so that's clearly an issue, but I would say that's all the more reason why America should have spent the last two decades trying to this'll sound harsh to something, become friendlier to Russia and China to become more interactive with them economically.
Speaker 2 00:24:00 Instead of, instead of assuming that they were no better than under Stalin and Mao and realizing that economic trade is no threat, that exporting stuff from Russia and China is no threat. That is not been the view as you know of both parties have resisted that view. So, uh, I think things are getting very dangerous because I see a unified, almost a bi-partisan support for going to war. And, you know, in Washington, there's no bipartisan support for anything. And so when you see bipartisan support for anything, it's, uh, my, my reading of history has been as never a good thing. Uh, when both sides agree wholeheartedly and then the media also agrees, uh, they're all pushing for war with Russia, they're all pushing for a militarily, arming Ukraine. I think they're not really taking into account the energy aspect of this because they don't want to take care of the energy aspect of this.
Speaker 2 00:25:02 They like the idea that this looked bad for fossil fuels, that they're not bothered by fossil fuel prices going up. They are not bought. You can doubt they'll say this. They'll either say it's Putin's price increase, which is nonsense. Or they'll say, put up with an Americans, go buy an electric car. That's it go eat, let them eat cake as Marie Antoinette said. And when they're that callous, you can, you can tell and realize that they're really ideologically committed to this. And that's why they're callous about the suffering involved, not only the suffering of the pump, but I believe the suffering that might come from, uh, getting the U S involved in this, uh, militarily. So I'll stop there, um, and would love to hear from, from you folks. And thanks for joining me tonight. Abby, do you want to moderate or should I,
Speaker 0 00:25:59 Yeah, so I guess they'll just say, um, first we'll say, if you aren't with us here alive, uh, you definitely want to register. There's always links in the bottom of these podcasts on our website. Uh, you want to show up live because we do another hour of Q and a and discussion. And that is oftentimes, um, some of the most interesting and engaging part is when we all chat as a group. So with that being said, there are a couple of people have their hands raised. I don't know if that's on purpose or not, but I do want to just open it up for, if you want to ask questions, you know, giving priority to those who are going to unmute their mic and, and speak up. And if not, I can read some questions if you guys post them in the chat and are unable to unmute your mic for any reason. So you can do that as well. But I guess that'll just say, does anybody have a first comment? Anybody wants to begin.
