Dean Baker: Thomas Edsall Talks About the Elites Screwing the Masses, but It’s Much Worse than He Says

 

via Patreon

Thomas Edsall’s latest columntells readers how people in power, including many Democratic type people, have made decisions that have seriously worsened the situation of the 60 percent of the workforce without college degrees. While the basic point in the column is completely true, the column gets one important fact badly wrong, and hugely understates the extent to which the screwing of non-college educated workers was the result of deliberate government policies.

The fact the column gets badly wrong is the claim that “automation” has somehow sped up in recent years and is rapidly displacing less-educated workers. Automation is not a well-defined concept, economists would more generally talk about productivity growth. This is well-defined and we have good measurements of productivity growth going back to the end of World War II.

From the standpoint of an individual worker, or the economy, it doesn’t matter if their labor is no longer needed due to an assembly line speed-up, greater efficiency in organizing the workplace, or robots. In all three cases, fewer workers are needed. The obsession with automation as something new and different is completely misplaced.

If we look at productivity growth, we get the opposite of the story that Edsall and his sources are telling. In the last decade productivity growth has averaged just 0.9 percent annually. Productivity growth has been slow in the pandemic, but even if we take the decade from the fourth quarter of 2009 to the fourth quarter of 2019, productivity growth averaged just 1.2 percent.

By contrast in the years from 1947 to 1973 productivity growth averaged 2.8 percent. This was a period of rapidly rising wage growth, with pay for workers at the middle and bottom keeping pace with the overall rate of productivity growth.

The picture does not change if we just look at manufacturing. Productivity in manufacturing has actually been flat over the last decade. In the decade from the fourth quarter of 2009 to the fourth quarter of 2019 it rose at a 0.2 percent annual rate.

In short, the story of workers being rapidly displaced by automation, robots, or anything else does not fit the data. Furthermore, rapid displacement is not necessarily bad news for workers, as shown by the strong wage growth that accompanied the strong productivity growth in the decades following the end of World War II.

If we had a story where we were seeing rapid productivity growth, accompanied by rising inequality, then we could say that we face an unfortunate trade-off, with the cost of more rapid growth being higher inequality. But in fact, the opposite is the case. We see very slow productivity growth accompanied by rising inequality. It is not clear what gain we are supposed to be getting for this increase in inequality.

Not Free Trade

The other part of Edsall’s story is 100 percent accurate. We designed trade policies to put our manufacturing workers in direct competition with low-paid workers in developing countries. This cost us millions of manufacturing jobs and put huge downward pressure on the wages of workers who still held their jobs. As a result of the massive job loss due to trade, the wage premium for working in manufacturing has largely disappeared.

But this policy was not “free trade,” as Edsall says. We made a conscious decision to put manufacturing workers in direct competition with much lower paid workers in developing countries, while continuing to protect more highly paid workers. We could have designed trade policies that would have made it much easier for doctors, dentists, and other highly educated professionals in developing countries (and rich countries) to come to the United States and compete with our professionals.

This would have offered large gains to the economy, as we could have saved hundreds of billions of dollars annually paying less money for these professionals. Our trade negotiators never pursued this type of free trade because doctors and lawyers have far more political power than steel workers and textile workers. As a result, we structured trade in a way that redistributed a huge amount of income upward and pretended that it was just the natural course of globalization. But wait, it gets worse.

Government-Granted Patent and Copyright Monopolies

The fact that some people (those with college and advanced degrees) are better positioned than others to benefit from advances in technology is not an accident. It is by design. The reason that these people are able to be winners from technology is because the government grants patent and copyright monopolies for innovations and creative work. Over the last four decades it has made these monopolies longer and stronger, which increases the amount of income going to those in a position to benefit from them. (See my discussion in chapter 5 of Rigged [it’s free] or here.)

As a result, a massive amount of income has been redistributed upward. This has made a small number of people tremendously rich, such as Bill Gates, whose fortune depends on the government’s protection of Microsoft’s patent and copyright monopolies. It has also allowed millions of others to earn far higher paychecks than if these monopolies were weaker, or if we relied on different mechanisms for supporting innovation and creative work.

The recent experience with Moderna and its Covid vaccine illustrates this point perfectly. The government paid Moderna $450 million to develop a vaccine. It then paid another $450 million for its final phase 3 clinical trials that provided the basis for the FDA's approval. It then allowed Moderna to have control over the vaccine. The result was that we got at least five Moderna billionaires as its stock price rose by tens of billions of dollars. Undoubtedly, many other Moderna employees became millionaires, although probably not the people who serve lunch in its cafeteria or clean its toilets.

Of course, this money comes from somewhere. We pay about $400 billion a year (around $3,000 per family, each year) more for prescription drugs because the government provides patent monopolies and related protections. We pay around $100 billion a year more for medical equipment and several hundred billion more for computer software.

This is all money out of the pockets of non-college educated workers. And when the big winners in this story decide to spend their money on houses and other items, we get the inflation we are seeing today, which apparently has everyone so upset.

The key point is that this is all by design. We could have told Moderna that we are going to pay them to develop its vaccine, but then everything is in the public domain. Anyone, anywhere in the world can manufacture it. Furthermore, its non-disclosure agreements with its engineers are unenforceable. This means that they could all sell their services to anyone who wants to pay them to set up manufacturing facilities.

In this alternate universe, the key people behind developing the vaccine would almost certainly be well-compensated, but we would be talking millions, not billions. The decision to structure our rules on technology, so that a relatively small segment of the population could benefit hugely at the expense of everyone else, was a political choice. It was not something that technology did.

This is what I refer to as “the Really Big Lie.” The idea that somehow globalization and technology developed in a way to screw workers without college degrees and it just so happened that more educated workers were big winners. And, many of the more educated workers are good liberals, so they would even be willing to pay higher taxes to help out the losers with various social programs.

Given this reality, is it surprising that the people who were screwed would be angry at the “winners?” To be clear, I am sure that almost no one among the angry non-college educated has given any thought to government-granted patent and copyright monopolies or the protection from competition that their doctors enjoy.

Why would they? These points are almost never made in major news outlets and politicians like Trump push racist stories about lazy Blacks and immigrants ruining their world.

But these people are absolutely right that they have been screwed by policies pushed by an educated elite. It is tragic that they see an outlet for their anger in going after the most disadvantaged segments of society, but they do have a real basis for their anger and perhaps some day this fact can be discussed in outlets like the New York Times.

Henry Adams on the Corruptions of Power [feedly]

Henry Adams on the Corruptions of Power
https://conversableeconomist.com/2022/11/08/henry-adams-on-the-corruptions-of-power/

 -- via my feedly newsfeed

 A good question, Maicol David Lynch. And, an important one for socialists, especially Marxists.  However, the Gramscian "specific conditions" obtaining for a particular socialist government suggest there may be more than one answer to your question.

It seems to me there are a number of variables to think about in finding a "model" for socialist leadership. This is my understanding:

Variable 1: What is socialism?

There is an economic, and political answer. 

For both Marxist and non-Marxist theories of socialism, the state -- or some non-profit oriented proxy, supplants private enterprise in degrees and proportion based on (at least) these assumptions:

a) that abundant resources, and abundant production and financing capacities of industry make it possible to reduce the "prices" of the "means of life" toward zero, where little or no profit, no retained earnings, no money is required. If there are costs they are born by general taxation.

 b) The "means of life" become public goods, meaning they neither exclude shared use nor have any rival for universal, "free" provision of the good. The ratio of public to private goods is a good measure of the degree of economic socialization.

c) The "means of life" becomes increasingly expensive as both physical and social reproduction of human societies requires a rise in human capital -- the knowledge and capabilities to be fully productive in advanced society. One can thus expect "abundance" to spread gradually, perhaps never fully satisfied. Investments in education and training must be accompanied by cultural revolutions in work and leisure life that also are expensive, controversial and disruptive under the best of circumstances,  and inevitably contrary to many 'traditions' as past gender, family, age, nationality, racial and ethnic roles are challenged. 

 

The point is: progress toward "abundance" will be gradual, and measured, no matter how revolutionary the changes in political or state leadership may be. Progress in economic relations requires careful planning and development. Shifts can take decades to become pervasive in an economy even when they are fast moving. (Consider the use and regulation of cell phones combined with the Internet) Many outcomes are impossible to predict in advance. All investments in the future have RISKS of failure. 

     

c 

Of all early expressions of socialism, only Marx's has stood the test of history. The countries that call themselves socialists are all strongly influenced by, and contributed extensions and expansions of Marx's key concepts. Among the key conc

**For modern non-Marxists, "socialism", or its real life expressions -- "social democracy" and "democratic socialism" -- is pretty much summed up as an effort to perfect the democratic values promised in most, not all, bourgeois revolutions, from the American revolution forward.

The democratic socialist aspiration for "a more perfect union" struggles constantly against the inequities of developing capitalist relations, and strives to offset or compensate or restrain destructive social and political  tendencies arising from market anarchy.

But it does not reject "market" relations, as in Utopian or Anarchist conceptions, like Robert Owen 19th American experiment. Given the vast wealth being socially created by capitalism,  such "rejection" was entirely Ideal -- as contrasted with Marx.

In earlier times most "social democratic" formations in Europe were Marxist in one form or another. Some saw Marx's effort to be "scientific" about socialism as meaning a natural, more or less smooth, evolution toward perfection requiring no extraordinary personal subjective effort.

*
The history of socialism as a political trend since Marx and Engels wrote the Communist Manifesto has often been consumed with debates over which approach to socialism was Utopian, and which was "scientific".

US Economy on Election Day: Where It Stands and What It Means [feedly]

US Economy on Election Day: Where It Stands and What It Means
https://www.bloomberg.com/news/articles/2022-11-08/us-economy-on-election-day-where-it-stands-and-what-it-means

 -- via my feedly newsfeed

Bernanke v. Kindleberger: Which Credit Channel?

By Perry G. Mehrling

OCT 13, 2022 | MACROECONOMICS





In the papers of economist Charles Kindleberger, Perry Mehrling found notes on the paper that won Ben Bernanke his Nobel Prize.


In the 1983 paper cited as the basis for Bernanke’s Nobel award, the first footnote states: “I have received useful comments from too many people to list here by name, but I am grateful to each of them.” One of those unnamed commenters was Charles P. Kindleberger, who taught at MIT full-time until mandatory retirement in 1976 and then half-time for another five years. Bernanke himself earned his MIT Ph.D. in 1979, whereupon he shifted to Stanford as Assistant Professor. Thus it was natural for him to send his paper to Kindleberger for comment, and perhaps also natural for Kindleberger to respond.



As it happens, the carbon copy of that letter has been preserved in the Kindleberger Papers at MIT, and that copy is reproduced below as possibly of contemporary interest. All footnotes are mine, referencing the specific passages of the published paper, a draft copy of which Kindleberger is apparently addressing, and filling in context that would have been familiar to both Bernanke and Kindleberger but may not be to a modern reader. With these explanatory notes, the text speaks for itself and requires no further commentary from me.






“May 1, 1982



Dr. Ben Bernanke

Graduate School of Business

Stanford University

Stanford, CA 94305






Dear Dr. Bernanke,



Thank you for sending me your paper on the great depression. You ask for comments, and I assume this is not merely ceremonial. I am afraid you will not in fact welcome them.



I think you have provided a most ingenious solution to a non-problem.[1] The necessity to demonstrate that financial crisis can be deleterious to production arises only in the scholastic precincts of the Chicago school with what Reder called in the last JEL its tight priors, or TP.[2] If one believes in rational expectations, a natural rate of unemployment, efficient markets, exchange rates continuously at purchasing power parities, there is not much that can be explained about business cycles or financial crises. For a Chicagoan, you are courageous to depart from the assumption of complete markets.[3]



You wave away Minsky and me for departing from rational assumptions.[4] Would you not accept that it is possible for each participant in a market to be rational but for the market as a whole to be irrational because of the fallacy of composition? If not, how can you explain chain letters, betting on lotteries, panics in burning theatres, stock market and commodity bubbles as the Hunts in silver, the world in gold, etc… Assume that the bootblack, waiters, office boys etc of 1929 were rational and Paul Warburg who said the market was too high in February 1929 was not entitled to such an opinion. Each person hoping to get in an[d] out in time may be rational, but not all can accomplish it.



Your data are most interesting and useful. It was not Temin who pointed to the spread (your DIF) between governts [sic] and Baa bond yields, but Friedman and Schwartz.[5] Column 4 also interests me for its behavior in 1929. It would be interesting to disaggregate between loans on securities on the one hand and loans and discounts on the other.



Your rejection of money illusion (on the ground of rationality) throws out any role for price changes. I think this is a mistake on account at least of lags and dynamics. No one of the Chicago stripe pays attention to the sharp drop in commodity prices in the last quarter of 1929, caused by the banks, in their concern over loans on securities, to finance commodities sold in New York on consignment (and auto loans).[6] This put the pressure on banks in areas with loans on commodities. The gainers from the price declines were slow in realizing their increases. The banks of the losers failed. Those of the ultimate winners did not expand.



Note, too, the increase in failures, the decrease in credit and the rise in DIF in the last four of five months of 1931.[7] Much of this, after September 21, was the consequence of the appreciation of the dollar from $4.86 to $3.25.[8] Your international section takes no account of this because prices don’t count in your analysis. In The World in Depression, 1929-1939, which you do not list,[9] I make much of this structural deflation, the mirror analogue of structural inflation today from core inflation and the oil shock. But your priors do not permit you to think them of any importance.



Sincerely yours,



[Charles P. Kindleberger]”










References



Bernanke, Ben S. 1983. “Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression.” American Economic Review 73 No 3 (June): 257-276.



Kindleberger, Charles P. 1973. The World in Depression, 1929-1939. Berkeley CA: University of California Press.



Kindleberger, Charles P. 1978. Manias, Panics and Crashes: A History of Financial Crises. New York: Basic Books.



Kindleberger, Charles P. 1985. Keynesianism vs. Monetarism and Other Essays in Financial History. London: George Allen and Unwin.



Kindleberger. Charles P. and Jean-Pierre Laffargue, eds. 1982. Financial crises: Theory, History, and Policy. Cambridge: Cambridge University Press.



Mehrling, Perry. 2022. Money and Empire: Charles P. Kindleberger and the Dollar System. Cambridge: Cambridge University Press.




Notes


[1] Bernanke (1983, 258): “reconciliation of the obvious inefficiency of the depression with the postulate of rational private behavior”.

[2] Reder, Melvin W. “Chicago Economics: Permanence and Change.” Journal of Economic Literature 20 No. 1 (March 1982): 1-38. Bernanke (1983, 257) states explicitly, “the present paper builds on the Friedman-Schwartz work…”

[3] Bernanke (1983, 257): “The basic premise is that, because markets for financial claims are incomplete, intermediation between some classes of borrowers and lenders requires nontrivial market-making and information-gathering services.” And again at p. 263: “We shall clearly not be interested in economies of the sort described by Eugene Fama (1980), in which financial markets are complete and information/transactions costs can be neglected.”

[4] Bernanke (1983, 258): “Hyman Minsky (1977) and Charles Kindleberger (1978) have in several places argued for the inherent instability of the financial system, but in doing so have had to depart from the assumption of rational economic behavior.” It is perhaps relevant to observe that elsewhere Kindleberger takes pains to point out the limitations of the Minsky model for explaining the great depression: “it is limited to the United States; there are no capital movements, no exchange rates, no international commodity prices, nor even any impact of price changes on bank liquidity for domestic commodities; all assets are financial.” (Kindleberger 1985, 302) This passage appears in Kindleberger’s contribution to a 1981 conference sponsored by the Banca di Roma and MIT’s Sloan School of Management, which followed on a 1979 Bad Homburg conference that also included both men, which proceedings were published as Financial Crises: Theory, History and Policy (Cambridge 1982).

[5] Bernanke (1983, 262): “DIF = difference (in percentage points) between yields on Baa corporate bonds and long-term U.S. government bonds”.

[6] It is exactly the sharp drop in commodity prices that Kindleberger puts at the center of his explanation of why the depression was worldwide since commodity prices are world prices. Kindleberger (1973, 104): “The view taken here is that symmetry may obtain in the scholar’s study, but that it is hard to find in the real world. The reason is partly money illusion, which hides the fact of the gain in purchasing power from the consumer countries facing lower prices; and partly the dynamics of deflation, which produce an immediate response in the country of falling prices, and a slow one, often overtaken by spreading deflation, in the country with improved terms of trade, i.e. lower import prices.”

[7] Bernanke’s Table 1 cites August-December DIF figures as follows: 4.29, 4.82, 5.41, 5.30, 6.49.

[8] September 21 is of course the date when the Bank of England took sterling off gold, see Kindleberger (1973, 167-170).

[9] The published version, Bernanke (1983), still does not list Kindleberger (1973), citing only Kindleberger (1978), Manias, Panics, and Crashes. Notably, the full title of that book includes also the words “A History of Financial Crises.” Kindleberger himself quite explicitly frames Manias as an extension of the Depression book, now including all of the international financial crises he can find. Later commentary however follows Bernanke in viewing Kindleberger (1978) as instead an extension of Minsky’s essentially domestic Financial Instability Hypothesis, which is not correct. On this point see footnote 4, and more generally, Chapter 8 of my book Money and Empire (Cambridge 2022).

Perry G. MehrlingAcademic Council
Professor of Economics, Boston University

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Scotus Mailbag talk: If you were creating a new constitutional order from scratch...?

 

captured from Matt Yglesias substack:  Interesting conversation (avatars for names) on comparative approaches -- mainly Canadian --  to constitutional reform of the supreme judiciary.

Lost Future: How do you feel philosophically about judicial review being part of a country's political system? I remember when I learned in school that a majority of developed countries actually don't have true judicial review, they practice 'parliamentary sovereignty' and the legislature can just pass whatever they want.... Was pretty shocking. But, most of those countries are in the EU, so aren't they now all subject to the EU Court of Human Rights? So maybe that's no longer true, I dunno.

If you were creating a new constitutional order from scratch, would you empower a supreme judiciary to strike down 'unconstitutional' laws? Or is that too subjective & inherently partisan? I think we've all heard criticisms that the justices are just unelected politicians, etc. etc. One reasonable compromise (for the US) that I was thinking is that it should require a supermajority to declare a law unconstitutional- using a raw majority to determine what should be a fundamental question is pretty dumb. Also, individual judges should have a lot less power in our system. Open to hearing your thoughts though!

It’s important to distinguish between two separate ideas. One is judicial review of laws to assess their conformity with the constitution. The other is the idea that the courts should be the people who “go last” in an interbranch conflict.

I think the Canadian system — in which laws are absolutely reviewed by the judiciary for conformity with the Charter of Rights and Freedoms, but Parliament has the right to overrule the Supreme Court — is good. Overrides do happen under this system, but relatively rarely — the Court’s rulings are not a dead letter. One reason they are not a dead letter is that the Court has a decent amount of legitimacy. But one reason they preserve that legitimacy is the Supreme Court is not a locus of massive partisan conflict. And that’s because strong policy-demanders at odds with an important constitutional ruling have a more promising course of action than politicizing the judiciary — they can just push for parliamentary override. To me, it’s a good system.

But note that in the United States, a lot of the de facto power of the judiciary comes from non-constitutional cases. Because of bicameralism, presidentialism, and the filibuster, the stakes in judicial interpretation of statutes are very high here. If the Supreme Court of Canada rules that some Canadian air pollution regulation violates the law and Parliament feels they don’t like the outcome, they can just pass a new law that clarifies the point. In America, if the Supreme Court rules that the EPA can’t regulate greenhouse gas emissions, then that is a de facto guarantee that there will be no emissions regulation because the barrier to passing a new law is so high in our country.

This is why on some level, I think “judicial review” is the wrong thing to ask questions about. Obviously courts need to be able to do statutory interpretation. But what we have in the United States is an extremely low-productivity legislature that in practice devolves massive amounts of powe

Matt Yglesias: Beating climate change absolutely requires new technology

 via Slow Boring at Substack

Beating climate change absolutely requires new technology

We have what we need to drastically cut emissions — but we're going to need much more

Matt Yglesias

 I was thinking of writing about why I disagree with Farhad Manjoo’s column arguing that nuclear power still doesn’t make sense, but I saw some tweets about a failed carbon capture and sequestration (CCS) project and realized that I never replied to an email asking why Slow Boring has paid tens of thousands of dollars for direct air capture (DAC) carbon removal programs.

What makes these topics hard to write about is that they involve complicated technical questions, and the honest truth is that well-qualified technical experts disagree about all of them.

But what links these topics together is that if we want to navigate the climate crisis in a remotely acceptable way, the world is going to need to develop some technologies that are currently unproven.

The opposite view is rarely expressed in explicit terms (because it’s wrong), but it often implicitly backstops skepticism about things like nuclear, CCS, and DAC. People will point out, rightly, that these technologies are pretty uncertain and unproven and currently seem to involve very high costs. Then they point to the fact that solar and wind work just fine, are well understood, and are cheap at the current margin. They’ll say “why not just do that?”

And every once in a while, you see a take like Alejandro de la Garza’s article in Time arguing that “We Have The Technology to Solve Climate Change. What We Need Is Political Will.”

This is true in the trivial sense that we could dramatically reduce CO2 emissions with currently available technology if we were willing to accept a large decline in living standards and world population. But that’s not really a solution to the problem. We should absolutely deploy current technology more aggressively and thereby contribute to solving the problem — but we will also need some new technology in the future, and that means we need to keep an open mind toward investment.

Renewables are great (at the current margin)

There’s a weird internet cult of renewables haters, and also the strange case of the state of Texas, where renewables are the number two source of electricity but politicians pretend they hate them.

This article is about the limits of the all-renewables strategy, but it doesn’t come from a place of hate. The reason Texas — a very conservative state with a locally powerful oil and gas extraction industry — has so much renewable electricity is that large swathes of Texas are very windy, and building wind farms in windy places is a very cost-effective way to make electricity.

And in a place where overall electricity demand is rising, both due to population growth (in Texas) and due to ongoing electrification of vehicles and home heat, renewables buildout does an enormous amount to reduce CO2 emissions and air pollution. Powering electric cars with electricity from gas-fired power plants would have emissions benefits, as I understand it, because natural gas is less polluting than oil and because big power plants are regulated more stringently than car engines or home furnaces. But still, the emissions benefits are much larger if the electricity is partially or wholly generated by renewables.

But the “partially” here is actually really important. An electric car that’s powered 50% by renewables has lower emissions than one powered by 10% renewables and higher emissions than one that’s at 90% — the more renewables in the mix, the lower your emissions. You don’t have to get to 100% renewable power; the key thing is to use “more” renewable power. And when people say (accurately) that renewables are now cheap, they mean that it’s cheap at the current margin to add more renewable power to the mix.

That’s because electricity demand is growing, so a marginal addition of renewable electricity just gets tossed into the mix usefully. But it’s also because Texas (and other states) have all this fixed infrastructure for burning natural gas already. If you get extra wind power you can just burn less gas, and the gas is still there to use if you need it. California, probably the leading-edge state on renewables, actually built a small number of emergency gas generators that they turned on for the first time on September 4 of this year to meet rare peak demand and avoid blackouts.

An all-renewable grid is very challenging

That California experience illustrates two things, I think:

• Democratic Party politicians are, in practice, much more pragmatic than unflattering conservative stereotypes of them would suggest.

• Democrats who’ve actually had to wrestle with practical problems know that we are further from an all-renewables utopia than environmentalist rhetoric suggests.

Gavin Newsom knows perfectly well he can’t just have a statewide blackout once or twice a year and tell voters that’s a small price to pay for meeting emissions goals. Voters want to see action on climate change, but they have a very limited appetite for enduring personal sacrifice or inconvenience. Using renewables to dramatically reduce emissions while still counting on gas backup when needed? Great. Securing even deeper emissions by accepting that power sometimes doesn’t work? Not great.

Consider this data from my rooftop solar panels.

• The first pane says that so far in 2022, the panels have generated 102% of our household electricity use — hooray!

• The second pane shows that we generated a huge electricity surplus (blue lines below zero) during the spring when it was sunny and cool, but we are in a small deficit over the summer when it’s even sunnier but our air conditioning use surges.

• The third pane shows that in September, whether we are in surplus or deficit on any given day hinges crucially on the weather. It’s going to end up being a deficit month largely because of a big rainy stretch.

So how much does this cost? Well, not very much. Because the key thing about this scenario is that all my kilowatts of electricity get used. When I’m in surplus, that extra electricity goes “to the grid” where it substitutes for other sources of power, and I earn credits that offset my electricity usage during deficit periods. If I had to throw away my surplus kilowatts instead of selling them to the grid, my per-kilowatt cost would soar.

And if everyone had solar power, that’s the problem we would face. Who would we export the extra electricity to during surplus periods? At a small margin, we have the technology for this: instead of exporting power during the day and importing it at night, I could get a home battery and store daytime excess for use at night. That would raise my per-kilowatt cost, but only modestly since batteries aren’t that expensive. And you can add wind as well as solar to your grid so you have some resiliency against seasonal variations in sunlight.

The problem is that without fossil fuels for resilience, the cost per megawatt of renewables soars because redundancy is expensive.

Wasting electricity is costly

Seasonal variation is a big problem here, for example.

Let’s say you have enough solar panels to cover 100 percent of your electricity needs on an average December day. That means you’re going to have way more panels than you need on an average June day when the sun is shining for a much longer period of time. On a pure engineering basis, that’s fine — there are just some panels that in practice are only generating power for a few days per year in the dead of winter. But the cost per megawatt of those panels is going to be astronomical because a solar panel is almost 100 percent fixed costs.

The same is true of random fluctuations in weather. If you’re like Texas and rely on a mix of gas and wind, then wind is cheap — you add some turbines and that means you burn less gas. If there’s some freak day when there’s very little wind, then you burn an unusually large amount of gas. As long as you’re using almost all the wind power you generate, the cost per megawatt of your turbines is low. But if you try to build enough turbines to keep the lights on during low-wind days, you’re wasting wind on high-wind days. This means your cost per megawatt rises.

Because massively overbuilding renewables would not only cost a lot of money but wastefully consume vast tracts of land, it seems like a better idea would be to use long-term batteries. If you had really big batteries that stored electricity for a long time, you could simply store surplus power in the high season and unleash it in the low season.

In fact, if you are lucky enough to have large hydroelectric dams at your disposal, you can probably use them as a seasonal storage vehicle. You can let the water pile up when renewables are at maximum capacity and then run it through the dam when you need it. Not coincidentally, politicians from the Pacific Northwest — where there’s tons of hydro — tend to be huge climate hawks.

But for the rest of us, it’s Hypothetical Storage Technology to the rescue.

I’m not saying anything here that renewables proponents aren’t aware of. They write articles about seasonal electricity storage all the time. There are plenty of ideas here that could work, ranging from ideas on the technological cutting edge to brute force engineering concepts like using pumps to create extra hydro capacity. Another idea is that maybe you could replace a lot of current fossil fuel use with burning hydrogen, and then you could manufacture hydrogen using renewable electricity while accepting seasonal variation in the level of hydrogen output. It might work!

The known unknowns

Speaking of hypothetical hydrogen applications, it’s also worth saying that while electricity, cars, and home heat together constitute a very large share of global emissions, they are not the whole picture.

You can build an electric airplane with current technology, but we absolutely do not have a zero-carbon replacement for conventional passenger airplanes at hand. Nor do we currently have the ability to manufacture steel, concrete, or various chemicals in a cost-effective way without setting fossil fuels on fire. These aren’t necessarily unsolvable problems, but they have not, in fact, been solved. It isn’t a lack of “political will” that has denied us the ability to do zero-carbon maritime shipping. Right now, the only proven way to power a large ship without CO2 emissions is to use one of the nuclear reactors from an aircraft carrier. But this is both illegal and insanely expensive. You could maybe do something with hydrogen here, or else it is possible that if the Nuclear Regulatory Commission ever decides to follow the law and establish a clear licensing pathway for small civilian nuclear reactors, the companies who think they can mass produce these things in a cost-effective way will be proven right.

And if they are, that would not only solve the container shipping problem but would make decarbonizing electricity much easier. And that’s true even if the microreactors never become as cheap as today’s marginal renewable electricity because we ultimately need to move beyond these margins. The same is true for geothermal power. Even if the most optimistic scenarios here don’t pan out and geothermal remains relatively expensive, a new source of baseline zero-carbon electricity would solve a lot of problems for a mostly-renewable grid.

By the same token, CCS doesn’t ever need to be cheap enough to use at a massive scale to be incredibly useful. Even a very expensive gas + CCS system could be a cost-effective way to backstop renewables rather than engaging in massive overbuilding.

With Direct Air Capture — sucking carbon out of the air with essentially artificial trees — not only would the west pay de factor climate reparations, but we could also achieve net zero without actually solving every technical problem along the way. You could make airlines (and private jets) pay an emissions tax and use the money to capture the CO2. Of course, with all these capture schemes there’s the question of what you actually do with the carbon once it’s captured. One idea is that the CO2 removed from the air could be used to manufacture jet fuel. Airlines would then burn it again and put it back out into the atmosphere, but this process would be a closed loop that wouldn’t add net new greenhouse gases.

The case for agnosticism

People on the internet love to cheerlead for and fight about their favorite technologies.

But everyone should try to focus on what the real tradeoffs are. When towns in Maine ban new solar farms to protect the trees, that is a genuine tradeoff with the development of renewable electricity. When California votes to keep Diablo Canyon open, by contrast, that does absolutely nothing to slow renewable buildout. And the idea that investments in hypothetical carbon capture technologies are preventing the deployment of already existing decarbonization technologies in the present day is just wrong.

The basic reality is that some new innovations are needed to achieve net zero, especially in the context of a world that we hope will keep getting richer.

These innovation paths require us, essentially, to keep something of an open mind. As a matter of really abstract physics, “use renewables to make hydrogen, use hydrogen for energy storage and heat” makes a lot of sense. As a matter of actual commercially viable technologies, though, it’s stacking two different unproven ideas on top of each other. Insisting that all work on cutting-edge industrial hydrogen projects be conducted with expensive green hydrogen throws sand in the gears of difficult and potentially very important work. And when you tell the world that all the problems have been solved except for political will, you unreasonably bias young people who worry about climate toward either paralysis or low-efficacy advocacy work. What we need instead is for more young people who are worried about climate to find ways to contribute on the technical side to actually solving these important problems.