January 09, 2007
Detroit Automakers Want Half Billion For Battery Research

Do the Detroit automakers want to move toward electric vehicles? GM just introduced their Volt electric car prototype which would go 40 miles on a wall socket charge and further on a 3 cylinder engine recharge. Now the US automakers want the US government to spend $100 million per year to speed up the development of batteries that can work better in cars and trucks.

General Motors Corp., Ford Motor Co. and DaimlerChrysler AG have asked the U.S. government for $500 million over five years to subsidize research into advanced batteries for cars and trucks.

The automakers made the request last month after meeting with President George W. Bush in the White House in November, said Stephen Zimmer, an advanced engineering director at DaimlerChrysler's Chrysler unit.

The Detroit makers are saddled with an expensive union and an high exchange rate for the dollar as a result of manipulations by East Asian governments. Therefore they are losing big money and aren't in a position to do much research.

Current US federal government funding of battery research is very low.

Since 1991, the U.S. government has subsidized battery research at the rate of about $25 million a year.

$25 million a year is chump change. Even $100 million per year isn't much. The article reports a claim by a spokesman for GM that Japan and other East Asian countries are spending a few hundred million dollars to subsidize the development of battery technologies in order to give their automakers a competitive advantage.

Given the current $3 billion per week burn rate for US forces in Iraq (which understates total costs since deaths and disabilities will cost us far into the future) the $100 million per year proposed above would pay for 6 hours of the US expenditures in Iraq. 6 hours. We could defund Muslim fundamentalists if we developed cleaner and cheaper replacements for oil and we'd raise our living standards in the process.

Fossil fuels usage brings big external costs in the form of pollution. We are better off accelerating the development of technologies that'll reduce and eventually eliminate the need for fossil fuels.

Share |      Randall Parker, 2007 January 09 08:02 PM  Energy Policy

Bob said at January 9, 2007 9:48 PM:

Batteries won't have that large an impact, environmentally, will they? After all, the electricity has to come from somewhere .. mostly from burning coal in the U.S.

Hydrogen fuel cells? Hydrogen comes from processing natural gas.

Unless we're gonna build a bunch of nuclear reactors (with attendant shrieking of opponents), having electric cars doesn't seem to me to be a big step forward.

Rather than burning fossil fuel for transportation, we'll burn it for electricity, which we use to charge up batteries (with energy loss, of course) for transportation. Almost certainly a net overall efficiency loss?


Wolf-Dog said at January 9, 2007 10:28 PM:

Even if we use coal fired plants to charge the electric cars, the economic efficiency would be equivalent to getting 150 miles per gallon. Additionally, the coal fired electric plants are much cleaner than internal combustion engines. Moreover, it is also possible to burn biomass in power plants (wood, switchgrass, corn, etc); you can even mix biomass with coal in the power plant. Nuclear reactors are certainly the way to go, but we need a lot more investment for research in better nuclear plants. Meanwhile we can certainly build a few hundred cheap but efficient power plants that will burn a mixture of coal, wood, switchgrass, etc., all made in USA.

Factory said at January 10, 2007 3:39 AM:

Batteries also allow you to separate the function of generating the energy from the function of using it. This will more easily allow for new methods of energy production. It also allows forms of energy generation that are highly variable (like wind, solar, etc) to be more productive, since batteries are not so reliant on being charged at any particular time.

OTOH the USG is prolly better off either starting a program to do research on battery tech, or by giving it to companies that are solely devoted to researching batteries.

tvoh said at January 10, 2007 4:55 AM:

It speaks volumes about the expected ROI that Detroit wants you and I to foot the bill for the research.

David Govett said at January 10, 2007 8:09 AM:

I'll do the research for half that amount.

morpheus said at January 10, 2007 8:56 AM:

electric cars are the future

an nuke plants

the solution has been here all along,

if we wouldnt let gay greapeace activists, and evorometalist run the show,

Gerald Hibbs said at January 10, 2007 9:56 AM:

I'm for nuclear plants as well. But, if all we can get are coal plants at least we have abundant coal resources right here in the United States.

Nick said at January 10, 2007 10:16 AM:

Coal is only 50% of electrical generation in the US, and wind is 47% of new generation planned for 2007 (adjusting for capacity factors) while coal is only 13%. See http://www.nei.org/documents/Energy%20Markets%20Report.pdf page 8, keeping in mind that wind has a short planning horizon, so 2008 and beyond will rise a great deal - only 2007 is really useful for comparison purposes.

Further, internal combustion engines are only 15% efficient, on average, while electric engines are about 80% efficient from plug to wheel.

The only barrier to electric vehicles is the battery. GM says that they batteries they're looking at now have the specs they need (Saft and A123systems), but there's still work needed to develop the battery packs, electronics, and do the testing (crash, environment, durability). Automotive development takes 3 years minimum to go from prototype to manufacturing for anything new (think Pinto gas tank - car execs certainly do).

I suspect the $500M is primarily to bring costs down and allow faster expansion of manufacturing and battery size. Cheap at twice the price. Heck, let's give them $10B in return for doubling the CAFE - that would pay back in months.

Tom Weaver said at January 10, 2007 1:25 PM:

Detroit wants half a billion dollars for new research for new batteries, and Tesla Motors (www.teslamotors.com) claims to be able to provide a car this year that can go 6 times as far, using current lithium ion technology. Seems to me that Detroit needs more & better engineers more than anything else.

Nick said at January 10, 2007 6:11 PM:

I like Tesla a lot, but they're doing something very different: they're proving that li-ion batteries can power a good car with sufficient range. They're not trying to produce a mass-market car, at least not yet.

Tesla's batteries cost about $20,000, and will need to be replaced in 5-7 years, at a cost of about 20 cents per mile. Add in electricity at 2 cents per mile, and you have 22 cents, or more than twice the cost of the average ICE vehicle. Even with reduced maintenance your total cost of ownership rises at least 10%, with the additional cost up front and the savings over the life of the vehicle. That's not a recipe for mass market sales.

Tesla is banking on batteries coming down in cost and improving on cycle life. The R&D proposed by Detroit would accelerate that, and benefit everybody.

Sione said at January 10, 2007 6:28 PM:

"$25 million a year is chump change. Even $100 million per year isn't much."

Of course, it's never much money when it's someone else's money your spending. Let the boondoggles begin.

The titanic waste of other people's money, coercively expropriated by force, is an ongoing tragedy which has done much harm and squandered much opportunity (an example of Bastiat's unseen). A society based on such theft is not much of a society really.

Randall Parker said at January 10, 2007 8:10 PM:


Coal electric has environmental advantages. It is probably a lower net emitter of pollutants than oil burned as gasoline.

Some energy gets lost converting coal to electric and then transporting and storing in a battery. But a big stationary plant can be optimized for conversion to an extent that a mobile internal combustion engine can't.

The big stationary plant can also handle heavier pollution equipment. Plus, it can capture and store pollutants such as sulfur and particulates. A car can't do that - at least not cost effectively.

Coal plant regulations are becoming tougher and could become tougher still. Zero emissions coal electric is possible. It would add a few cents to the cost per kwh of coal. But the cost of complete mercury, particulates and carbon dioxide capture will come down.

Also, we could build nukes and wind towers to generate electricity to power cars.

In a nutshell, great batteries would allow all energy sources to compete to provide electricity. We could choose the cleanest sources if if the public could be convinced to pay more for cleaner electricity.


Boondoggles? I always hear libertarian arguments against government funded research. But why do I never hear libertarian arguments against the willingness of the masses to pollute and harm other humans? They are inflicting costs on me when they barrel down the road. They do it when they heat their houses or go on airplane trips. I want to take some of their money to develop technology so when they go on their oblivious ways they'll do less harm to me and others.

Gerald Hibbs said at January 10, 2007 9:48 PM:

Sione, I would usually agree with your points. I love the market and 99 times out of 100 would say let the market work. However, this case is somewhat different. If the government can take steps at a reasonable cost level that would help America, and thus the rest of the world, make the switch from pure internal combustion (IC) to electric vehicles (EV) several years earlier that would be worth the cost. 3 years faster towards less pollution would probably save some lives, but more importantly that is 3 fewer years of funding our enemies.

If you were dictator using your oil money to fund jihad, and you maintain your power by paying off the mobs with oil money, what would you think if you saw the road sign that said the rest of the world was taking the exit into EV land within 3-5 years? It is a signal to our enemies that their gravy train is about to end and might make them rethink their choices. Suddenly faced with the concept that soon I couldn't pacify the public with oil money and it could be my neck in the public's noose I might consider liberalizing, tending to my economy, shoring up infrastructure before the money is gone or at least putting the jihad money into my Swiss bank account for when it's time to flee. Any of those would be better outcomes than the status quo.

I'll say it again: What standard do electric vehicles need to meet before they can be considered viable? I think we are pretty much there with good performance/acceleration, EV range at more than most people commute in an average day and the possibility of quick charging at public charging stations. The biggest drawback remaining is cost and the government can use funds, even if just with tax incentives, to help businesses get over that hump.

I say screw 500 million. Put ten billion on the block split among an assortment of mile stones (battery and engine) to reach the following goal.

A $5000 battery pack that can provide an SUV sized pure electric vehicle with performance (acceleraton, top speed, etc) similar to IC for a range of 250 miles with a 5 minute charge time. Meeting those goals would truly make electric vehicles mainstream and consumer desireable and signal the death of the IC engine.

Government sucks at research, but the goals are easily determined. Put the money out there and let the genius of the market stampede to grab the cash.

Randall Parker said at January 10, 2007 11:12 PM:

Tom Weaver,

Tesla wants $100,000 for a sports car that they can't even deliver yet. You think Detroit is blowing it by failing to compete against that?

Batteries really do cost too much and store too little. Tesla can't buy any better batteries than Detroit can.

Gerald Hibbs,

The US government funds tons of great research, especially in biology and medicine. Most of what I report on here in the way of research is US government funded.

I think some of you are confused by research funding and industry subsidies. Tax breaks for buying photovoltaics is not research funding. Subsidies to produce corn ethanol is not research funding. I'm advocating for research funding where most of the work gets done at universities. The universities of America produce lots of great research using government funds.

Gerald Hib bs said at January 11, 2007 2:13 AM:

Randall, I will just point to a Dean Esmay post from last year where he discusses the views of some researchers he knows. Anecdotal, yes, but telling:

". . .I know more than one scientist who has a pretty dim view of the entire Federal research grant process. Whether they work in major research areas like cancer or AIDS, or minor obscure areas no one's heard of, the complaint is the same: politicians and government bureaucrats are generally scientifically stupid and don't understand the issues they're funding research for. They thus usually wind up giving control of all spending priorities to small cliques of researchers who effectively control all the grant money--and fully credentialed, credible scientists who question the reigning hypotheses or want to take a new approach to the subject are frequently frozen completely out."
Ken said at January 11, 2007 2:50 AM:

Really $500M is a pittance given the profound benefits that will come from better energy storage. A few miles of freeway costs that much. Intermittent energy sources as well as electric vehicles would become more viable. Photovoltaic's potential is enormous and we're seeing advances that will reduce their cost - nanoparticle inks for roll printing CIGS cells for example are set to go into commercial production. We'll see more GigaWatts for bucks with support of R&D into nanomaterials for PV and for Batteries than building any number of nuclear power stations.

Ned said at January 11, 2007 7:10 AM:

I'm all for research into new energy sources, but why should the government subsidize it? Doesn't the free market provide enough financial incentives to those who discover new energy technologies? And why should Ford, GM and DaimlerChrysler be the only recipients? Ford and GM are American-owned, but DaimlerChrysler is a German company (AG is the abbreviation for Aktiengesellschaft, or stock society, the German word for corporation). What about BMW, Mercedes-Benz, Honda, Toyota and Nissan - they all operate auto plants in the USA. Why shouldn't they share in the goodies? And what about future profits? Suppose this money is used to fund a major breakthrough - who will profit from it? Will the auto makers patent the new technology and rake in big bucks from it? Or will the government insist that any discoveries remain in the public domain and be non-patentable? This whole thing is just part of a growing trend in this country to privatize profits and socialize costs.

Rob said at January 11, 2007 7:50 AM:

"$100M per year is chump change"

Hmmm. That's enough for 500 dedicated researchers making $100,000 per year each with each one having a $100,000 capital budget for tools, overhead and equipment. That sounds pretty good to me.

On the other hand, when companies are spending the government's money rather than their own, inefficiencies will undoubtably creep in (I know, I've worked on government-funded research projects before). Lots of travel expenses, lots of bureaucracy, many layers of management and so on. Before you know it, you've got gold-plated toilet seats in the loo. In the end, it will probably turn out to be 100 real researchers and 400 hangers-on and that's not so hot. The problem with government-funded research isn't the money, it's the inefficiencies of spending someone else's money.

Probably a better way to do it would be for the government to match the company's own battery R&D spending up to some cap. At least then it would only be partly other people's money that they were spending.

Paul Dietz said at January 11, 2007 9:59 AM:

I'm all for research into new energy sources, but why should the government subsidize it? Doesn't the free market provide enough financial incentives to those who discover new energy technologies?

The economic case for subsidy is that new knowledge is a 'positive externality'. Externalities lead to suboptimal equilibria in the absence of some countervailing government policy.

Realize the government already massively interferes with the free market here via patent laws, flawed as those are.

Russ Mitchell said at January 11, 2007 1:45 PM:

Rabid libertarian here. (Hi Randall. Havne't seen you since the Moon Society...)

Auto pollution is a classic example of a "tragedy of the commons" scenario.
Assuming that the govt is already subsidizing oil (and it is), and the Dems in congress want to cut that subsidy to include alternate energy and battery work (and they do, on a bipartisan basis), then simply being a libertarian (accepting that the govt will interfere, but preferring to minimize both the interference and the impact) provides no real arguments against shifting from one intrusion into the market, over to another one, which has the potential to significantly less damaging.

Oh, and add in carbon sequestration by means of slow pyrolysis/Terra Preta, and even coal may start to look acceptable on a pollution basis soon.

Randall Parker said at January 11, 2007 7:42 PM:


There are two economic arguments for government funding of energy research:

1) Fossil fuels generate external costs that polluters do not pay. They inflict damage on us. Their lobbyists influence government to delay efforts to cut back on pollution. If we have research into cleaner and cheaper energy technologies we'll get cleaner environment from market mechanisms that'll cause the cheaper tech to get used.

2) Knowledge produced from research is mostly not ownable and patentable. The market underrewards research because there's no way to pay the various researchers for their pieces of the puzzle. Efforts which do not provide a directly useful result yet which provide clues that other researchers build upon do not get funded by the market.

Libertarianism has its uses against communism and socialism. But it is a simplified ideology (as are all ideologies) and is built upon false assumptions about how the world works.

Randall Parker said at January 11, 2007 10:42 PM:

The market has produced lots of toxic coal pollution. See the recent report: New studies link mercury pollution hotspots to U.S. coal-fired power plants and other sources. This is reason enough to want to replace fossil fuels with cleaner sources of energy.

Sione Vatu said at January 12, 2007 6:01 PM:

Randall writes: "Boondoggles? I always hear libertarian arguments against government funded research. But why do I never hear libertarian arguments against the willingness of the masses to pollute and harm other humans? They are inflicting costs on me when they barrel down the road. They do it when they heat their houses or go on airplane trips. I want to take some of their money to develop technology so when they go on their oblivious ways they'll do less harm to me and others."

Randall, you may hear the arguments but you certainly don't understand them. Note previous comments made in this very thread about federal research programs from someone who had the misfortune to be involved in seeking federal funding. It's all a rort. And the rorting doesn’t stop with the seeking of funding either. Once the money is obtained then the real consumption begins and since it's someone else's $ at risk there is little signal to the research $ consumers regarding the value (or lack thereof) of what they are doing.

Govt funded "research" relies on stolen property. That makes it immoral at source. Second point is that it relies on the likes of people (such as yourself) setting themselves up as arbiters of how every other person should live. You are claiming an entirely fictitious ability to know better what technologies people should employ in their day to day living and you want the costs of your choices funded by forcible expropriations of other people's property. The fact is that you do not know how other people should live or what choices they should make or even how they should make those choices. That's why govt boondoggles (such as fuel cell research and now batteries research) waste so much resource for such little result. YOU do not know better than everyone else. But hey, you can always start repeating the myths- like how NASA invented non-stick frying pans!

The trouble with your big govt funded projects (boondoggles all) is the same problem faced by socialists and communists everywhere. That is, you lack the ability to calculate value. Since it is a matter of you promoting and implementing your subjective ideas at little or no cost to yourself (the govt is supposed to fund the big projects you promote) there is no way for your to know what someone else would have accomplished were they have been left with their own money to spend as they thought fit- an example of Bastiat's unseen. There is no way for you to know which choices are best. The economist Ludwig von Mises pointed out the error of your inability to calculate value as long ago as the 1920s. Try reading "Socialist Economy" (available free of charge on the web).

As far as the business of polluting and harming other humans is concerned, now you are being disingenuous (and not for the first time either), as well as being a hypocrite. YOU are one of the "masses" relying for your high standard of living on the production and consumption of fossil fuels. Simultaneously you are claiming that when other people do this they "harm" you. BS! Intellectually very, very dishonest. You should know better! Of course what is never admitted is the harm you do by supporting the taking of wealth from other individuals in order to support your cherished ideas. What about the harm that causes? Silence....

In the USA, note that it is your own government that has granted special privileges to supporters, cronies and special interests to pollute and damage the property of others at will. It is your own government that is the gravest polluter. This is the very organisation you propose, as funder of research, to help solve "pollution"- a problem it and its regulations are causal in creating!

Regarding Libertarian thought on the subject; I draw your attention to the Von Mises Institute where (should you bother to read and actually think about what you see there) you'll discover there is a great deal of material discussing how it is that a harm done by one individual to another/others is properly dealt with. There is something called Individual Property Rights (see Hoppe for the proper derivation). A transgression against someone's property (including their own body) can be readily dealt with. The Libertarian position is that should one party be shown to have harmed another (for example to have damaged or destroyed property or harmed person) then restitution is properly required. That is not the case in the USA right now. The govt prevents it in many instances.

Randall wrote: "Knowledge produced from research is mostly not ownable and patentable. The market underrewards research because there's no way to pay the various researchers for their pieces of the puzzle. Efforts which do not provide a directly useful result yet which provide clues that other researchers build upon do not get funded by the market."

Aside from claiming you know better than the market how to distribute resources and property, what you are also claiming here is that patents reward innovation. That's an extremely tenuous position- very controversial. Try proving it! In the meantime I draw your attention to the website of Dr Kinsella for more complete discussion on the subject.

Patents are yet another govt created boondoggle. They are essentially a grant of monopoly privilege to certain special interests and favoured groups. I note from personal experience in research and commercialisation that patents have been a major non-productive overhead which has hindered the development of useful research ideas due to rent seeking interests. Complex litigation and jury (!) determinations regarding who originated what, novelty, inventive step, teaching, enablement, first to file, first to invent, obviousness, how may lawyers can dance on the head of a US pin (as opposed to an Australian or a Samoan one) etc. etc. etc. etc. are a terrible waste of time and cash which we seek to avoid (as do many others) at the cost of abandoning promising lines of research. While the attorneys are happy, the presence of patents hinders research considerably. They would be best eliminated.

Before prattling on about who is getting "under-rewarded" etc. I'd recommend you find out more about what entrepreneurs do- how they succeed, how they fail and how the "market" determines their reward.

Moving on. Your characterisation of Libertarianism is itself simple and it is incorrect in that it is made from socialist premise. In effect you are trying to argue that all politics is relative and that your particular form of socialism (national socialism) is an equally valid means of dealing with relationships between people as Libertarianism. It isn't. Not unless you intend to postulate that it is valid to force other people to follow your ideas by coercion, force and threat of or application of violence.

Turning now to GM and Ford sucking up to the feds to get hold of some free cash. GM is casting around to find new magic pill technology to save itself from its looming failure. It is not the consumer's responsibility to save GM from its future. That GM is facing possible take over from Renault & Nissan is not a good reason to subsidise its "research." Similarly with Ford. The good I can see in the situation is that at least some non-American Lebanese Arabs will end up running both GM and Ford, putting them on sounder footing.


Sione Vatu said at January 12, 2007 6:13 PM:

In other words you do not support the market, for in the end you want an external entity to possess ultimate authority over it and a power to dictate its direction. In your case it is the government (some people claim it should be the church) and for the government to possess that power it is necessary for Property Rights to be diluted or extinguished…

Using your principles one can write as follows. I sympathise with your interest in electric vehicles. However coming from the Pacific I am well aware that it would be far superior environmentally for you guys to learn to walk or ride push bikes everywhere. Electric cars merely move pollution from one place to another. As for nuclear- we shan’t have that. The dangers that are necessarily imposed upon all life on the planet are too great. Walk. Ride. Wear sensible clothes. Work hard. Live simple.

So, following your premise, the government should confiscate every American’s car and heating furnace etc. The govt could sell these items for scrap (to other countries lie China if need be) and force Americans to walk and ride and wear woolly clothing. It’s a billion plus dollar project but for a little hurt we could save America and the World as well! As if…

(BTW since when is it the role of the govt of the USA to “save the World”? By what right? According to whom?)

Moving on to the business of enemies. The US and its client governments have been funding and supplying “enemies” for the last 50 years. Who was it that sent all those weapons to Iraq (and Iran and Syria and Egypt and Pakistan etc. etc.). How did those guys get hold of Western made munitions? Kind of strange how Saudi Arabia, a combination monarchy-theocracy hybrid, is completely reliant on US govt weapons systems and protection. The problem you are facing isn’t some dictator. It’s your own political people. Look to Washington. They ain’t about to change direction because of electric cars research! Especially not when they control all the funding anyway. Can’t see many minds being changed there…

Finally, I do not think you’ve considered the amount of power necessary to charge a battery capable of giving reasonable range and performance to an SUV in five minutes. We are talking megawatts of power to do that. Another big project just to install the infrastructure to deal with it... Lots and lots of copper. It’s a boondoggle!


Gerald Hib bs said at January 12, 2007 10:03 PM:


Of course I disagree. I don't see how my arguments lead to your flimsy strawman and wish you would just make straightforward arguments to rebut me. I am certainly a believer in markets. In fact I think that prizes for the development of technology is better than direct government funding because markets are wiser than government. As to why I think the government should make efforts to see the speed of technological advancement increased:

I think I do indeed have a certain amount of cynicism. Part of me figures that if the government is going to spend our money they might as well spend it on something I like! :-) But that's just a small part of it.

As to geopolitics, Iran is funded primarily by oil and they are engaging in Jihad, have vowed to nuke Israel and are developing nuclear weapons to do so. A couple of billion pushed towards putting them out of business sooner is a small price to pay compared to any number of increasingly likely scenarios. Jimmy Carter, and thus the US, are largely to blame that this situation even exists, I agree. So what? We have to do with the facts on the ground now. If one nuke gets used anywhere in the world our economy will lose far more than a couple of billion.

Government is making choices that effect our economy everyday, as other posters have noted. I see no problem with advocating that the government make choices that will incentivize long term gains rather than focus on short term realties. The end of Big Oil in America would cause a lot of short term destruction. Believers in markets understand that that is a cost of markets that leads to even greater long term gains. Creative destruction, though, can cause politicians to want to avoid the short term pain even though it costs us long term gain. So, the people need to speak up.

And that is not even addressing the environment. The government is discussing placing massive unfunded costs on our businesses that will do massive harm to the economy. I think this approach is far less costly and will do exponentially less damage. The government is going to do things. Again, we the public have a duty to urge them to take more effective and less costly steps.

Yes, it will take lots of power to charge cars. Randall has pointed out in other postings that if most charging takes place at off peak times -- at night -- our current power capabilities could already mostly cover the power usage. Yes, it will take time and resources to switch over. So what? Every change over in technology takes resources. Would you have us stay still and not grow even though we would just wind up having to use resources to continually maintain our current tech level? Is the world somehow a better place because copper is in the ground instead of being useful?

As to GM? One of my brothers is a vice-president at GM. Trust me when I tell you that part of GM's problem is the situation the government and unions have put them in. I don't see virtue in the destruction of GM because they are forced to pay higher costs per vehicle than foreign companies. Read Mickey's latest for a breakdown. "How Unionism hursts Detroit."

Finally, it is in America's interest to "save the world" if we can if only for the simple reason that we live in the world too. We are seeing the revolution of economies in third world countries due to simple things like cell phones. In the future we will see revolutions in education as courses, books, video of lectures, ect move onto the Internet so the poorest kid in Africa can get a world class education through a cheap, rugged laptop (that hopefully a charity will give him/her) or with the cost of tuition being access to an Internet bar. America leads the world in research and the word "revolution" in discussing the positive impacts is not mere hype. The world doesn't have to thank us but they could at least quit bitching about it.

Technology is already "saving the world" in many ways and we can foresee the day of super abundance of material goods due to nanotech and essentially infinite power supply. My simple plea is, "Faster please." We aren't talking about the creation of a welfare state that simply maintains the status quo while eating up massive amount of money and in many ways makes things worse. We are talking about the finally solving seemingly intractable problems that leads to better lives for all of humanity.

I admit I'm breaking my Libertarian principles in urging the government to help it happen faster. Why not? When we finally reach that point money will become a very abstract thing when it is no longer tied to commodities. Using the prize approach to stimulate the market to act we can see much faster development as companies race to get the prize for a relatively miniscule cost.

Edward said at January 13, 2007 11:17 AM:

"Sione Vatu":

Your tone is insulting. That makes it less likely that your message, which may be valuable, will be heard. Is it more important to you to educate people or to score points belittling them?

Randall Parker said at January 13, 2007 12:46 PM:


Long winded insulting comments that are just arguments short of evidence are not terribly persuasive.

You assume I know nothing about libertarian thought. News flash: I've read Von Mises' Human Action, Hayek's Road To Serfdom, Friedman's Free To Choose, Murray Rothbard's Great Depression and assorted other works popular with libertarians and Objectivists. I've read all this and found it all useful but find they reason from partially false assumptions about human nature.

A 100% government controlled economy will work far worse than an economy with a very small government. But that's not an argument for anarchy. And the evidence does not prove that all expenditures of tax dollars are net losses to the economy. To believe that all taxes and all government programs are net losses really requires an act of faith.

What is a "rort"?

As for the efficacy of mechanisms for handing out research grants: Most of the people involved in evaluating grant proposals are volunteers and practising scientists. Of course any mechanism is going to be less than perfect because it will be done by humans. But you can't prove something based on second hand grumbling of one guy who failed to get a grant he wanted.

Watch the scientific press release news sites or go read the Public Library of Science. See the amazing things that government funded science is doing.

If the US government was totally inept at high tech then the US Navy's nuclear submarines and their Trident missiles wouldn't function (they do), the JDAM bombs wouldn't be deadly accurate (they are), B2 bombers wouldn't be invisible to radar, a massive government program during WWII wouldn't have produced nuclear bombs, and NASA never would have put a man on the moon.

Look at the Hubble Space Telescope peering far into the universe. It is government funded. Or how about those big land radiotelescopes which, again, are government funded. Or how about the US and British stations down in Antarctica collecting scientific information in extreme conditions. Government funded of course.

The National Science Foundation funded the development of the first automated DNA sequencing machine. Cal Tech researchers took a mass spectrometer developed for the Mariner mission to Mars (government funded of course) and adapted it to produce a huge step forward in sequencing technology. Then Cal Tech scientists developed much better automated sequencing tech and evenutally left to found a private company.

That's how lots of high tech start-ups happen. University researchers working on government grants do science and come across something useful. Then they commercialize it in a private company. They get rich. We benefit from great products and services and disease treatments.

The fact is that the US government has massively pushed the envelope in science and technology. It continues to do so.

undergroundman said at January 18, 2007 8:25 AM:

Randall is 100% right. I've read many libertarian books (Capitalism and Freedom, Free To Choose, Bureaucracy by von Mises) and I've also found that they don't really defend the sore points of libertarianism: the monopolies, the imperfect information, the external costs, and other assorted points that you learn are vital if you study neoclassical economics.

Sione said at January 18, 2007 11:44 AM:


Your are wrong on this occasion.

Your characterisation of Libertarianism is false. For example, a Libertarian view on monopolies is that they are caused by government grants of priviledge to special interests (cronies). Kind of weird for you to hold Libertarians responsible for problems caused by their nemisis (collectivist govts)! The rest of the topics you raise would take too long for me to debunk here (I've already been accused of writing to much to this group). Should you really wish to understand the issues you've raised, it is recommended you direct your attention to "Capitalism", by Prof George Riesman. Needless to say, they are not "sore points" of Libertarianism, nor are they problems for Capitalism, Anarchy, Objectivism or even Minarchism. Check you premise!


PS You have an interesting tag line. Why did you choose it? What is its significance to you?

Sione Vatu said at January 18, 2007 3:37 PM:


Thanks for your response. I missed it as I was away on holidays.

I rebutted your argument by adopting your principles. That is, I constructed my scenario accepting as premise your idea that some organisation of authority is required to control the market and direct it (one time or 99 times- whatever). I also accepted the idea that this outfit has an authority that negates individual private property rights. In the examples we discussed that organisation was government.

You obviously do not like the idea that property of individual Americans (their cars and trucks) be coercively expropriated and that the choices for how those individuals transport themselves be restricted to walking and cycling. Fair enough. I don’t like it either. Has it occurred to you that there are those who would oppose your favored “solutions” being imposed upon them? For example, the extraction of property by tax, the restriction of choice by regulation- all to make sure that everyone drives the type of cars you happen to like and get their energy from the types of sources you happen to like. Why should anyone else be forced to support what it is you like, especially as it is to be imposed upon them regardless of what they might want for themselves (thus negating their volitional choices and taking away their property)? Impossible to justify from a Libertarian perspective- one needs to adopt socialist premise to head along that path.

The trouble with your argument is that in the end you do not trust “the market”. You do not trust other people to freely make the decisions you happen to favour. Hence you require the government to make others choose as you want. Apart from the immorality of this position, the trouble the scheme runs into includes inability to calculate value and the conceit of assuming that others should be forced to adopt your choices. Why should they?

Note: There is, of course, a problem you’d perceive in cases where the government ignores your ideals altogether, choosing to implement someone else’s (as they appear to presently be doing). There’s little you can do to argue against it as you have already conceded the principle.


WRT Research “prizes”.
The Calculation of Value is a key issue here. It is a problem that defeated socialism in the past and continues to do so today. It would defeat the research “prizes” scheme just as surely.

In the sphere of research the problem cannot not be avoided by setting up “prizes.” After all you still need to coercively expropriate the “prize” money from someone and you still suffer the conceit of claiming you know better than the free market, better than what people would have decided to pursue voluntarily if left to themselves.

Consider this. You are setting a goal for contestants to reach in order to be awarded the “prize.” Why should your goals be imposed rather than those of some other person? How would the contestants have directed their resources in the absence of said “prize”? What would have been achieved instead? How much more valuable would it have been to them? By what right do you negate their volitional decisions and impose your choices upon them at their cost? How do you know for certain they are wrong? Remember, you are not omniscient.

In the end calls for govt to introduce and fund mega projects, such as those that have been supported on this site (batteries and nuclear plants and new electricity distribution systems etc.), suffer from the same old socialist problems as always (I refer to the govt funding aspect, not the science/engineering itself). There aint anything Libertarian in supporting such nonsense. On the other hand, there is a lot of socialism inherent in doing so (more Leninist than Marxist). Consider carefully what socialism means, where it leads, the type of society that it develops. Consider it carefully for it is what you are in he process of adopting.


It is not going to be the case that Iran will be put “out of business” by the US govt forcing its citizens to change over to electric cars. The notion is silly- a fantasy. Iran is likely to have a nuclear capability within the next few years (possibly as quickly as 36 months). That’s long before electric cars make much of an impact. It would take a decade or more to convert an appreciable portion of the vehicle fleet in the USA over to battery storage (that is assuming one were to start the process of vehicle substitution immediately and that can’t happen as suitable batteries don’t exist as yet, nor does the ability to produce them in quantity- both are years and years away). Meanwhile Iran develops into a potent regional power. Better come to terms with it as that’s what’s about to occur, electric cars or not.

Iran is interested in the Bomb because the members of the democratically elected Iranian government reason that Iran must remain a sovereign nation and they (the Iranian govt) have security concerns. They understand the main aggressor nation active in their region, representing major threat to them, is the USA. They have had trouble with US govt interests previously. They greatly fear invasion and figure that building a few nukes is a good deterrent. I certainly disagree with their reasoning. I understand you to disagree with them as well. Still, where it is they got their argument (nukes as deterrent)? Whose examples are they following? They probably reckon MAD is a good concept. Mad, but hard to talk them out of it (as the Europeans are discovering).

{As an interesting aside, recall that the late Sir David Lange, former Prime Minister of New Zealand, informed the then President, Ronald Regan, that the possession of nuclear weapons was immoral, unreasonable and irrational. The New Zealand govt left the ANZUS Alliance at that stage and banned visits to NZ by US Navy war-ships, a stance the majority of New Zealanders supported and consistently maintain to this day. Most interesting and the source of many, many long arguments, no doubt.}


WRT General Motors.
You are correct about some of their problems but you should also have mentioned the fact that, in the main, GM product has been poor for decades (many of those vehicles being referred to as “yank tanks” and “unfit for the civilised”- civilised in the sense of people with taste and refinement). Consumers have been walking away from some of the worst, poorly designed, badly constructed, low quality automobiles produced in favour of far superior product and far superior services provided by other (non-American) makers. This has been occurring for a long time now, even within the USA. It’s not something that suddenly occurred “out of the blue”. GM management has been consistently poor and has failed to do much about it. Now the results are becoming so obvious everyone is aware of them.

Nevertheless the govt and the unions are indeed a problem for GM. You sure are right about that. Note that it was the government that required (by coercive regulation) GM to accede to union demands and bullying. It was the government that restricted GM’s business options, effectively controlling much of its operation. It was the government that regulated many aspects relating to the vehicles the company could actually produce - among other things that led to the infatuation with trucks. This does not excuse GM management for their poor performance though. They had ample opportunities to mitigate the losses and put the company on sounder footing.

Having been partially causal in contributing to the debacle that is GM, the govt is certainly not the agency to which that company should rely upon for protection or salvation. Anyway, why should anyone be forced to prop up GM? You can always donate your own money but you do not have a right to take anyone else’s. Same goes for me.

{I'd like to see some aspects of GM survive. There are certain niche models and engineering technologies which it would be good to see continue into the future. My suspicion is that GM will eventually be radically pared down in size. Many factories and administrative centres will be liquidated. Much of the operation will be moved outside of the US. How the GM product-line is developed after that will be interesting.}


WRT saving the World.
I understand the interests of the US govt (what you refer to as “America”) but what I asked was “by what right…” etc.

President George Washington warned against foreign adventures, invasions and war. He called for trade and friendship with all nations, favouring none above others. He worried about the trap of the US becoming embroiled in the business of & disputes of other people in other countries. It seems his warnings have been forgotten.


PS Did you see the eight wheel drive limo built in Japan not so long ago? It was all-electric drive with battery storage. Claimed range was 350 km and top speed was around 400 km/hr (as fast as the Bugatti Veyron). 0 - 100 km/hr was in four seconds, which is reasonable for such a heavy car. They save quite a bit of time in the 0 - 100 dash by getting "out of the hole" very quickly (the first 30 metres are dispatched most aggressively). I enquired about getting one. The price was electrifying unfortunately- in the millions of dollars range. Too high.

Sione said at January 21, 2007 1:54 PM:


Insulting? Your flippant and rather shallow comment regarding Libertarians was rebutted. Now, I’ve assumed nothing about you. I’m aware that you have had some exposure to Libertarianism (who hasn’t?) since that what was what you’d claimed on a previous occasion. My point was that you didn’t understand Libertarian ideas. Your response confirms the assessment.

You assert that Libertarians proceed from false assumptions about human nature. I disagree and would immediately counter that the false assumptions made in your socialist premise preclude your understanding Libertarianism in the first place. Nevertheless, taking for a moment your statement to be correct, it still does nothing to justify forcible expropriation of other people’s private property. Nor does it overcome the socialist calculation of value problem that fed funded research projects suffer from. Nor does it grant you or anyone else the powers of omniscience necessary to make the correct decision regarding distribution of resources on behalf of, and to the satisfaction of, other people.

You can’t make valid justification for what you are supporting. Among other things, you would need to demonstrate why it is that individual private property is invalid.


Regarding the economy.
You write: “A 100% government controlled economy will work far worse than an economy with a very small government. But that's not an argument for anarchy.”

Perhaps. Apply your argument consistently and you do indeed end up with an argument for 0% govt control over the economy (that is an argument for minarchy or possibly anarchy among other options). Fair enough. Separation of govt and economy would be a good ideal to attain, just as separation of govt and religion is a good ideal to attain. That means no funding of religion and no funding of science either. Fair’s fair!

You continue: “And the evidence does not prove that all expenditures of tax dollars are net losses to the economy. To believe that all taxes and all government programs are net losses really requires an act of faith.”

You appear to argue that taking people’s property from them does not cause losses to the economy and therefore it’s OK to do so. So were I to come into your office and take all your computers and furniture, the photocopier, the phone, your files and books as well, then I can be rest safe in the knowledge that the economy suffers no loss. In essence what you are arguing is that such theft does not cause losses to the economy since the property taken still exists. You may as well defend convicted burglars and rapists in similar fashion. The economy shows no loss from their activities and the property still exists. Of course this argument fails to consider the individual victims and their particular circumstances. What about their losses individually? Your argument operates from socialist premise in that only the collective is considered. The individual is ignored.

Another weakness in your approach is the failure to consider (or calculate) for the opportunity costs borne by those whose property is expropriated. Nor have you considered the gains that may have been realized had alternative applications for the expropriated property been allowed. The evidence shows these losses to the economy are substantial. The losses to individuals are likewise substantial.

BTW, is the abstract construct “economy” more important to you than a man’s freedom? What about his private property right? What about his liberty?


re Rorts
In general terms, a rort is a fraud or a dishonest scheme or action. The intention is to gain value at someone else’s expense by deception or by misleading them about the true nature of the scheme what the benefits may be and whom it is that benefits.


WRT federally funded “science”, “research” and weapons projects.
You evaded. Read what I wrote, not what you’d have liked me to have written.

The argument isn’t whether the weapons may function or even that the science is interesting and that some el neato stuff may be getting investigated. The argument relates to the questionable morality that the very existence these projects rely on, to the impossibility of solving the socialist calculation of value problem that all these projects are subject to and the irrational conceit of those who set themselves up as arbiters of how other people must live their lives and what choices they be allowed to make.

You argue that the weapons of destruction and killing created and employed by the govt are dead accurate and they operate. I’m not denying that at some level they operate. They certainly destroy property, injure and kill. The point is that there is no way for you to calculate whether or not this is the superior use for the resources consumed in creating these devices. What of the alternatives? What would other people have chosen to do with THEIR resources if allowed? The people who could best determine that were the original owners of the resources coercively expropriated.

In addition, consider this: what has been the result attained by deploying and using these devices? Well, there’s that boondoggle in Iraq…

In the case of the fed funded research projects you mention, I’m not denying that they may function at some level. Even Saddam Hussein could argue that his govt succeeded at executing some projects- they got some big buildings and palaces constructed, they even built up their science and research capabilities as well. The Iranian govt could argue on similar grounds, as could the Pakistanis and so on. Their “success” does not justify such activities. What I’m pointing out to you is that such projects rely on an immorality for their very existence and that, once again, the socialist calculation problem applies in their establishment or any attempt to justify their results.

Take as an example the NASA moon adventures. Sure they were an achievement. But what was sacrificed and lost forever to get a few good ol’ boys on t’moon? According to critics, such as the engineer Florman, the money spent could have been employed ensuring that every American had free access to clean water and proper sanitation. Imagine that! Every American way back in the 1960s! Many more people would have benefited from that than from a politically motivated entertainment show. Lido Iacocca contends that the aerospace business denuded US consumer industries of engineering talent hence contributing to the loss of US leadership in the automobiles and brown goods sectors. Many more people would have benefited from that than from a politically motivated entertainment show. Imagine that, a retained US leadership in the car industry and the brown goods industry as well. So which was more valuable- the moon boondoggle or the Florman ideal or the Iacocca ideal or something else entirely?

In the end, these grand science boondoggles are exciting and entertaining but given the quanta of the huge resource captured and consumed, the results attained have to be seen as questionable at best.

It is not appropriate to attempt a justification for the moon project on the basis that those who’d rather have selected alternative uses for their own funds were ignorant or in error. Those funds were theirs to direct. Or do you intend to argue that private property rights are invalid whereas initiations of coercive force are justified?

In supporting federal funded research projects you are arguing in similar fashion to those who admired Mussolini because he got the trains to run on time or Sadam because he built large buildings etc. Yet you do not know better than everyone else how they should spend their money or dispose of their property. You do not possess the power of omniscience to know which choice is most valuable or the best for other people. There is no feedback mechanism you can rely on to make that calculation, let alone respond to it. The feds don’t either. Neither do the “volunteers” who distribute fed grants. None has the right to commit the crime of receiving. None has the right to force their choices upon others.

Consuming other people’s coercively expropriated resource for battery or other research is unjustifiable. That includes the situation where the resource is to be consumed by an organisation that’s failed in the market. No one should be forced to subsidise such nonsense.

Randall, science can be interesting indeed. I’ve no argument with you there. Nevertheless, the THL here is that your personal interest in science does not validate the negation of other people’s values. It does not justify an application of coercion or force against them. It does not justify the destruction of other people’s private property rights. Nor can you use your passion for science to justify a claim to omniscience. That would be unscientific indeed…


Jgarbuz said at April 24, 2008 5:56 PM:

"Making the Electric Car Work: Can Israel Succeed?"
Posted January 25th, 2008 by Lee Nunley

"When a country can't buy oil from most of the Middle East, there are a few smart things to do: reduce consumption, buy from somewhere else, or, introduce the most revolutionary electric car infrastructure ever. For Israel, it's doing all three."

"Nissan, Renault, and Merrill Lynch are all banking on the idea that consumers want to travel cheaply, and do it green. Which is why, they, among others, are financing a project to successfully introduce the mass use of electric cars in Israel. Why Israel? Well, it's small, gas is expensive (think Europe but without the high GDP), gas is hard to get, and the government is willing to give out massive tax breaks to see if the technology will pan out."

"Announced on Monday, the plans for electric car infrastructure include the construction of 500,000 quick recharge points throughout Israel and tax breaks for electric vehicle buyers. With the tax breaks, electric cars in Israel will be less expensive to purchase than gasoline engine cars. And with 500,000 places to either recharge while you go get dinner, or just have the exhausted battery taken out and replaced with a juiced up one, a lot of consumers will probably be opening their checkbooks to take home an electric car."

"Renault, in association with Nissan, will be selling several of its standard vehicles in electric models for the Israeli market. These won't be weak electrics either; according to Bloomberg.com the electric engines will perform similarly to a 1.6 litre gasoline engine. With batteries built by NEC, the expected distance of Renault's electric vehicles is around 124 miles, pretty good considering that Israel is only one-third larger than New Jersey. Plus, Israel's most populous areas, aside from Eilat, are located relatively near each other. This means that, for an average Israeli, recharging an electric car at night after driving only a few miles is a feasible alternative to a gasoline engine vehicle. Renault is confident enough that the average Israeli will buy electric cars that it expects to sell 10,000 to 20,000 electric cars per year starting in 2011."

"So, could anything hinder the Israeli electric car plan? The answer seems to be a tentative, "no". Unless consumers decide that they don't like the technology, or the vehicles/batteries do not perform as well as a traditional gasoline powered car, we may soon see the first country to successfully introduce widespread use of the electric car."

Sources: Bloomberg.com , NY Times

Lee Nunley
Middle Eastern Innovations Writer

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