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Texas is just now emerging from what may be our nation’s most terrible public- utility disaster ever. Its electric power, heating and eventually clean water supplies all failed catastrophically during the recent Polar Vortex. Post-mortem analyses are only just beginning, including this good one in the New York Times. It will take months, if not years, to analyze all the details and take appropriate action to reduce the risks of a recurrence.
But one thing is clear right now. This was not a failure of engineering. The engineers did what they could within their marching orders. They were told to let “the markets” decide and to favor low prices above all. In other words, the “plan” was to have no plan at all.
So the root cause of this all-utilities disaster was outside engineers’ bailiwick and above their pay grade. It was a failure of fundamental governing philosophy, aka political ideology. It was the notion that “the markets” will provide, if only we just let them rip.
A secondary but also important cause was Texans’ conceit that the Lone Star State could go it alone, that its folks know better than that rest. That’s why Texas steadfastly ducked national regulation and refused to connect its electrical grid with the rest of the nation’s.
What happened in Texas involved no failure of science or engineering, far less a failure of execution. It was a fundamental conceptual error in how to govern and how to live. That error, writ large, is basic to our entire nation’s decline in inflation-adjusted wages, economic equality, education, science, technology, economic security and climate security in our new century. So it’s worth some ink to discuss it.
The best place to start is with the last century’s monument to oversimplification and excess. That would be the titanic struggle between the extremes of socialism/Communism and unregulated free markets. The extreme of Communism came in the now-defunct Soviet Union, which banished all private enterprise and let government operate all industry. Among the results of this obsessive central planning were lots of left boots with no right ones and, as I described in an early 2009 essay, the literal freezing of wartime heroes in Leningrad when pipes from a centralized whole-city heating system broke down.
Analyzing this tragedy decades later, I noted a similar one in our free-market Michigan. One of our own wartime heroes had also frozen to death in his bed, this time because his private power provider had shut off the energy to his home for non-payment. He turned out to have been secretly wealthy, but no one in the profit-making ventures that supplied his energy seemed to know or care. No doubt he had been senile, demented or just forgetful in paying his bills—faults for which our free markets let him freeze to death.
As I had predicted half a year earlier, and before the Crash of 2008, the Cold War’s end had produced lots of senseless free-market triumphalism and little sober analysis. We Americans pursued an apotheosis of free markets as thoughtless and absurd as the Soviets’ of collectivization. Our own dismal results, in chronological order, were hardly surprising, if not specifically predicted: (1) the Crash of 2008 and its bailouts of the culprits, (2) the downsizing of environmental regulation, (3) the losses of jobs and factories and our industrial base that led to our Demagogue’s rise; (4) the gross neglect of climate change and its human causes, (5) our catastrophic response to Covid-19, and (6) Texas’ all-utilities failure.
The tragedy was that we all should have known better. The regulated free markets of FDR, which lasted through our postwar years and into the 80s, produced the strongest, fairest, most vibrant consumer economy the world had ever known. They also helped us win the Cold War, win the space race from a standing start (in second place), and send men to the Moon. The momentum of our history-leading economy later helped produce the Internet, discover DNA, and create genomic medicine.
Now we are stalling because we adopted an economic/social philosophy as lopsided as the Soviets’ own, but on the other side. We know that markets don’t do everything because we understand the “tragedy of the commons.” If farmers graze their cows on the common public square for free, the cows will eat the grass, no one will replant it, and no one will carry away the cow pies. Just so, if no one regulates pollution, including greenhouse gases, we’ll have filthy air in cities and runaway global warming. Then the “climate commons” in which we evolved will give us Polar Vortices like Texas’. This is not political ideology or politics; it’s practical cause and effect, Economics 1A.
It’s no accident that the Bible Belt runs right through Texas. The notion that “God will provide” is first cousin to believing that free markets magically cure their own defects. Fed Chief Alan Greenspan once believed that, before his belief helped foster the Crash of 2008 and he recanted it in testimony before Congress. Second cousin to that is the notion that we live in the best of all possible worlds—a philosophy popular among the French aristocracy just before the French Revolution.
Once we Americans built our nation on a very different understanding of the world: “God helps those who help themselves.” Helping yourselves requires, among other things, a plan. Texas suffered immensely in the recent Polar Vortex because it had no plan. Instead, it relied on the Christian God and the false god of markets. It had suffered for the same reasons when Hurricane Harvey drenched Houston, after whatever plan it had fell short.
To recover from the Polar Vortex, Texans must reconsider their traditional independence and self-reliance and make a plan. They can no longer rely on God or free markets, which both abandoned them in their hour of need, leaving devastated consumers with thousands of dollars in market-inflated electric bills. And to reduce their costs without sacrificing safety and reliability, they may have to rely on the rest of us more, in a common effort to address nationwide and continental risks.
Texans must also rely on their own human intelligence. They must make a plan that includes foreseeable contingencies, without ideological prejudice or excessive favoritism for low prices. They must account for all reasonable contingencies, including predictions of climate scientists.
If Texans can manage that, then maybe they can make an American-style comeback. Maybe the Texas Polar Vortex Catastrophe will become a national high-water mark for thoughtless free-market triumphalism, just as the icing of heroes in Leningrad appears to have been the high-water mark of triumphalist Communist central planning. The middle ground between extremes is not always the precise optimum, but after a century of breast-beating ideological conflict and resultant serial catastrophes, it’s not a bad place to start.