Wednesday, June 23, 2021

Give people better choices is preferred over forcing people to comply

I like history with numbers.  From How the Oil Industry Saved the Whales.  

Prior to the 1800s, light was provided by torches, candles made from tallow, and lamps which burned oils rendered from animal fat. Because it burned with less odor and smoke than most fuels, whale oil, particularly oil from the nose of the sperm whale, became popular for lamp oils and candles. However, sperm oil, widely known as "spermaceti", was very expensive. In fact, a gallon in the early 1800s cost about $2.00, which in modern values equates to about $200 a gallon. Nonetheless, whale oil was the illuminant of choice for those rich enough to afford it.

A thriving whaling industry developed to provide sperm oil for lighting, and regular whale oil as a lubricant for the machine parts of trains. In the United States alone, the whaling fleet swelled from 392 ships in 1833 to 735 by 1846. At the height of the industry in 1856, sperm oil sold for $1.77 a gallon, and the United States was producing 4 to 5 million gallons of spermaceti and 6 to 10 million gallons of train oil annually.

The demand for whale oil took a tremendous toll on whales, and some species were driven to the very brink of extinction. The right whale, one of the scarcer varieties, was killed in the early 1800s at a rate of about 15,000 per year. When the growing scarcity of this whale forced attention to other species, only about 50,000 right whales remained. Had demand for whale oil continued, extinction would have undoubtedly claimed several species.

When a clean-burning kerosene lamp invented by Michael Dietz appeared on the market in 1857, its effect on the whaling industry was immediate. Kerosene, known in those days at "Coal Oil", was easy to produce, cheap, smelled better than animal-based fuels when burned, and did not spoil on the shelf as whale oil did. The public abandoned whale oil lamps almost overnight. By 1860, at least 30 kerosene plants were in production in the United States, and whale oil was ultimately driven off the market. When sperm oil dropped to 40 cents a gallon in 1895, due to lack of demand, refined petroleum, which was very much in demand, sold for less than 7 cents a gallon.

There is a lesson in there which is ignored by politicians and regulators.  If you give the consumer what the consumer wants in a better fashion and at a cheaper cost, consumers will adopt your preferred policy.  Not because it is deemed a better policy but because it is a better solution to their needs.

This is akin to the lockdowns.  Virtually everywhere in the world where the data exists, people began curtailing their exposure and social interactions long before lockdown laws were passed.  Similarly, people began interacting again well before lockdowns were lifted.

You don't generally need to coerce and punish people to do that which is readily apparent is beneficial to do.  

Coercion and punishment are only required where the authorities want something to happen which is not obvious, and indeed, is frequently simply wrong or ineffective.

We are seeing this in much of the alternate energy arena.  Unlike replacing whale oil with obviously superior kerosene and petroleum products, most alternate energy solutions, without subsidies from the state, are both more expensive and inferior solutions to cheap, clean, safe, and reliable energy.  

Kerosene and petroleum products curtailed the massacre of whales, an incredible environmental win.  But the win came about because of more effective solutions to the need for light rather than state coercion. 

Yet coercion seems increasingly the policy solution de jure.  Instead of making things better by giving people more and better choices, we simply outlaw that which some, usually minuscule, sliver of society dislikes.  Coercion piled on coercion never ends well.


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