Re: [RC] Re: [ RC ] China and electric cars

[David R. Block]

Your strict Libertarians want every road to be a toll road, city streets and country lanes to someone's house excepted. Not realistic, but we are talking the ardent Libertarians. And printing extra money, historically, has always bitten countries in the butt. From post World War One Germany to Zimbabwe, the track record is pretty constant and dismal. Eventual hyperinflation followed by deflation, and the most corrupt dictators in the world. If the government doesn't strangle industry (which it is prone to do), then better batteries will be developed. My main personal issue with the government intervention is that the closest thing to eternal life in this world is a government program. Interstate highways, the Internet, and the space program were all winners. The war on poverty is a stalemate at best, FEMA is the Keystone Cops, and AMTRAK has really worked out well (not). The Interstate program is different from most of the rest, because there, the states built the roads to federal specifications (loosely) with mostly federal money (90/10). I say "loosely" because you can tell the differences on I-10 and I-20 when you cross the Texas-Louisiana line. The Louisiana side is not as good as the Texas side. My beef with THIS administration is the campaign against the coal, oil, and nuclear industries. Excuse me, but we cannot maintain our electric production without more of some of those energy sources, barring an almost miracle breakthrough. I don't have trouble expecting miracles, but you shouldn't RELY on them. Some of the EPA water standards are stricter than what exists NATURALLY. That's nuts. The EPA has almost made permits for new nuclear facilities impossible to obtain. We will have to replace the existing ones with something eventually, because they do not last forever. David To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.--Thomas Jefferson   On 9/27/2010 1:52 PM, Dr. Ernie Prabhakar wrote: Hi Billy, On Sep 26, 2010, at 5:59 PM, bil...@aol.com wrote: Ernie: That is a very good point. Two replies-- ( 1 ) Some things simply cannot be done without massive capital --beyond the resources of even the largest private firms The Interstate, for example. Boulder Dam might be another, or TVA. Obviously the Moon program of the 60s / early 70s. This being the case, where does Libertarian philosophy fit in? The first question is, where is the revenue stream? If there's no revenue stream (moon shot), the only revenue stream is from being a monopoly (e.g., utilities), or the primary economic value is externalities (e.g., roads), then even traditional capitalists would argue for government action (strict Libertarians might not, but if you're that strict you may as well be anarchist). The secondary question is about available capital. In many developing economies (like the U.S. in the 19th century, or China today) large capital is only available to the government. The same is not true of the U.S. today -- over 25 years, it is easy to imagine private corporations raising capital to match the Chinese investment. The third question is risk management. Government can take larger financial risks, because the cost of risk is lower (since it can print money). But that cuts both ways. It is easier to do big things, but it is also easier to do stupid things. ( 2 ) Maybe the best approach might be a combination of gvt and pvt like massive RR expansion in the 19th century. No way that pvt industry could have done it alone, but also a truism that it was best that the program was designed to further pvt business. As for the Chinese, seems to me that this is somewhat similar to the RR example. Even if it partly fails, there ought to be tangible results, if not everything they wanted, all kinds of goodies. After all, there are just two serious issues, infrastructure and maxi-batteries which still aren't what everyone wants. Yet batteries are far better than a generation ago. The Japanese were working against too many variables, and didn't have nearly the software human capital needed. BTW, first infrastructure of electric cars in the USA, think it is the Big Island of Hawaii, now under development. How can America compete ? Do we need to? I think you did a good job identifying the two core issues: infrastructure and batteries. But will a big ambitious program help solve either of them? The problem is that just throwing money at battery development may not get better returns. Everybody has been spending billions on batteries already. How will the Chinese do better? Will they throw more money at the same researchers (in the U.S. and Japan)? Will they train all their scientists to focus on batteries, and neglect other fields of technology? Any radical improvement would likely require a chain of fundamental improvements in material science. But for science to improve, it has to be published. If China tries to keep all the secrets to itself, it will fail to advance the science. But if they publish everything, how can they pull ahead? In this case, the Libertarian answer is arguably the better one. If the market doesn't provide sufficient incentive or capital to create better batteries (still a big if) offer a prize for better batteries: McCain calls for $300 million prize for better car battery http://edition.cnn.com/2008/POLITICS/06/23/campaign.wrap/index.html As to infrastructure, government investment could help. But again, the risk factor is huge, because you have to pick the right *time* to invest in infrastructure. We built a lot of charging silos for EV1s that were a complete waste of money. Maybe the right solution is actually plug-in hybrids, that would leverage existing infrastructure until batteries became efficient enough that pure plug-ins became feasible. Who knows? I might not bet solely on that, but I sure wouldn't bet billions against it. The danger of a massive government program is that the temptation to spend that money is huge, even if the market isn't ripe. So, while I'm not philosophically opposed to government intervention in research and development, China's project doesn't exactly leave me quaking in my boots. -- Ernie P. -- Centroids: The Center of the Radical Centrist Community <RadicalCentrism@googlegroups.com> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org