Don’t Knock Nock

Albert Jay Nock’s Our Enemy the State, which was published nearly ninety years ago in 1935, had a great influence on Murray Rothbard, transmitted though his friend and mentor Frank Chodorov, who was Nock’s main follower. The book is rich in insights, some of which I have discussed in a forthcoming review for The Misesian, but there are many more. In what follows, I’ll comment on some of these.

Nock distinguishes two ways in which people in a community can co-exist. One is by peaceful cooperation and the other is by taking what others have produced. He calls the first way the “economic means” and the second the “political means.” By Nock’s definition, the state is necessarily parasitic: “The State, then, whether primitive, feudal or merchant, is the organization of the political means.”

Different economic classes try to seize control of the state to obtain the benefits that accrue to the holders of state power. Nock offers as a prime example of this phenomenon the struggle between the feudal state and the merchant state. The latter is not an example of a genuine free market but rather an attempt by a few powerful people and corporations to mulct the public. Nock here fully anticipates and responds to one of the most important attacks on the free market. Opponents of capitalism confuse it with “crony capitalism,” ably discussed by Hunter Lewis in his book Crony Capitalism in America, 2008-2012. The critics demand that the manifest defects of crony capitalism be remedied by the state, when it is precisely the state that is responsible for them.

In this connection, Nock makes a valuable contribution that anticipates contemporary discussion. Nock claims that powerful corporations, such as the British East Company, were states, and understanding this point is basic to understanding American colonization. He credits for this insight the great American historian Charles Beard:

The fundamental fact to be observed in any survey of the American State’s internal development is the one whose importance was first remarked, I believe, by Mr. Beard, that the trading company—the commercial company for colonization—was actually an autonomous state. “Like a State,” says Mr. Beard, “it had a constitution. . .like the State it had a territorial basis, a grant of land often greater than in area than a score of European principalities. . .It could make assessments, coin money, regulate trade, dispose of corporate property, collect taxes, manage a treasury and provide for defense. . .Thus every essential element long afterward is found in the government of the American State appeared in the chartered corporation that started English civilization in America.”

In his discussion of the merchant state, Nock puts great emphasis on control of the land, and he uses this point as a key to interpreting American history from colonial times through the Revolutionary War and afterward to the adoption and ratification of the Constitution. He says: “The first postulate of fundamental economics is that man is a land animal, deriving his subsistence from the land.” In part, this emphasis on land stems from the fact that Nock was a follower of the nineteenth-century economist and social reformer Henry George, who argued that ownership of land—as opposed to productive enterprise that takes place on land—belongs to “society.” Rothbard rejects this position, defending instead a Lockean account of property acquisition, but the point about the importance of land can readily be separated from the Georgist doctrine. (It is hardly a coincidence that Nock has a very negative opinion of Locke.)

Both British and American owners of land sought to seize more and more land for themselves, and the British merchant state acted to restrict Americans from land-grabbing. Nock argues that this restriction was a major cause of the American colonies’ revolt against England. Nock is quite insistent on this. He says:

Great evidential value may be attached to the long line of adverse commercial legislation laid down by the British State from 1651 onward, especially to that portion of it which was enacted after the merchant-State established itself firmly in England in consequence of the events of 1688. . .Over and above these, however, if the reader will put himself back into the ruling passion of the time, he will at once appreciate the import of two matters which for some reason escaped the attraction of historians. The first of these is the attempt of the British State to limit the exercise of the political means in respect of rental-values. In 1763, it forbade the colonists to take up lands lying westward of the source of any river flowing through the Atlantic seaboard. . .this was serious. With the mania for speculation running as high as it did, with the consequences of opportunity, real or fancied, having become so acute and general, this ruling affected everybody. . .For by this time, the colonists had begun to be faintly aware of the illimitable resources of the country lying westward. They had learned just enough about them to fire their imagination and avarice to a white heat.

This is the first of the facts that Nock says historians have neglected. The other neglected fact is that American merchants realized that if they controlled a state of their own, they could use the political means to their advantage:

It would be the most natural thing in the world for the colonists to perceive that independence would not only give freer access to this one mode [land acquisition] of the political means but it would also open access to other modes as well which the colonial status made unavailable.

Nock was an original thinker of substantial power, and we have much to learn from Our Enemy the State and his other books.

Originally Posted at https://mises.org/

zerohedge
Economics , News , Politics , Science
November 22, 2024
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Utility Companies Are Not On Our Side

Authored by Linnea Leuken & H. Sterlin Burnett via RealClearPolitics,

When electric power was a novel idea and just beginning to be adopted in urban centers, the industry had a Wild West feel to it as multiple companies strung wires, opened power plants, and sold electricity on an unregulated market. Competition was fierce, but state and local governments concluded that the inefficiencies and redundancies endangered the public and imposed higher costs.

So states set up service territories with monopolistic or oligopolistic service providers, who were entrusted with providing reliable power and sufficient reserve for peak periods in return for being guaranteed a profit on rates proposed by the utilities but approved or set by newly established state public utility commissions (PUCs). These commissions were charged with ensuring public utilities served the general public universally within their territory, providing reliable service at reasonable rates.

Much has changed since then. Politicians began to supplant engineers to decide, based on self-interested calculations, what types of power should be favored and disfavored, and what types of appliances and modes of transportation Americans could use. As the 21st century dawned, a new consideration entered the picture: Climate change.

Under the banner of combatting global warming, utilities were at first encouraged and then coerced into adopting plans and policies aimed at achieving net zero emissions of carbon dioxide. The aim of providing reliable, affordable power – the rationale for the electric utilities’ monopolies in the first place – was supplanted by a controversial and partisan political goal. Initially, as states began to push renewable energy mandates, utilities fought back, arguing that prematurely closing reliable power plants, primarily coal-fueled, would increase energy costs, compromise grid reliability, and leave them with millions of dollars in stranded assets.

Politicians addressed those concerns with subsidies and tax credits for renewable power. In addition, they passed on the costs of the expanded grid to ratepayers and taxpayers. Effectively, elected officials and the PUCs, with a wink and a nod, indemnified utilities for power supply failures, allowing utilities to claim that aging grid infrastructure and climate change were to blame for failures rather than the increased percentage of intermittent power added to the grid at their direction.

Today, utilities have enthusiastically embraced the push for renewable (but less reliable) resources, primarily wind and solar. PUCs guarantee a high rate of return for all new power source (wind, solar, and battery) installations, which has resulted in the construction of ever more and bigger wind, solar, and battery facilities. The costlier, the more profitable – regardless of their compromised ability to provide reliable power or the cost impact on residential, commercial, and industrial ratepayers.

A new report from The Heartland Institute demonstrates the significant financial incentives from government and financiers for utilities to turn away from affordable energy sources like natural gas and coal, and even nuclear, and instead aggressively pursue wind and solar in particular. All of this is done in the name of pursuing net zero emissions, which every single major utility company in the country boasts about on their corporate reports and websites. Reliability and affordability come secondary to the decarbonization agenda.

Dominion Energy is a good example, as they are one of the most aggressive movers on climate-focused policy. Dominion CEO Robert Blue speaks excitedly about government-forced transitions to a wind- and solar-dominated grid in interviews. During one interview with a renewable energy podcast, he said:

“[S]ometimes the government needs to focus on outcomes. We’re trying to address a climate crisis, and we are going to need to move quickly to do that.” In the same interview, he expressed enthusiasm about federal policy that would achieve a government-directed transition.

And why wouldn’t he? Dominion, like most utilities, is granted government tax credits and guarantees on returns for investing in large, expensive projects like offshore wind, the most expensive source of electric power. The bigger the project, the bigger the profit with guaranteed returns.

Also, onshore wind companies have received special “take limits” from the Fish and Wildlife Service to kill protected bald eagles and golden eagles, while prosecuting oil companies if birds are injured or killed on their sites.

Net zero policies are not the environmental panacea that climate change activists proclaim. Industrial-scale wind and solar use substantially more land than conventional energy resources, disrupting ecosystems and destroying wildlife habitats in the process.

And despite recent technological advances, wind and solar are still not dispatchable resources, meaning they cannot provide consistent power at all times needed. Refuting claims made by environmentalists and utilities that wind and solar are the cheapest sources of electric power, costs have risen steeply as the use of wind and solar has increased. Customers of Duke Energy in Kentucky, for example, are paying 78% higher rates in the wake of coal-fired plant closings.

Politicians and utilities are pushing for even more electrification for appliances and vehicles despite the fact that Federal Energy Regulatory Commission officials have repeatedly warned in recent years that adding more demand for electric power while replacing reliable power sources with intermittent renewables is destabilizing the power system.

It appears that the utilities prioritize short-term profits over grid reliability or keeping costs reasonable – and the government officials who are supposed to keep them in check are only encouraging them. It doesn’t need to be this way. The U.S. grid was not always this way. Only in recent years, with the obsessive pursuit of net zero, have rolling black and brownouts become so common.

Today, utility companies are sending lobbyists to conservative policymakers in order to convince them that the utilities have our best interests in mind. Their track record tells another story. Meanwhile, Americans have less reliable electricity at higher costs.

Linnea Lueken (llueken@heartland.org, X: @LinneaLueken) is a research fellow with the Arthur B. Robinson Center on Climate and Environmental Policy at The Heartland Institute.

Tyler Durden
Fri, 11/22/2024 – 06:30