A whiff of luddism

Ken Rogoff—the Cas­san­dra of the finan­cial mar­kets crisis—insinuates a moral les­son from a anoth­er tech­ni­cal dis­as­ter with­out, how­ev­er, actu­al­ly defin­ing one.

If ever there were a wake-up call for West­ern soci­ety to rethink its depen­dence on ever-accel­er­at­ing tech­no­log­i­cal inno­va­tion for ever-expand­ing fuel con­sump­tion, sure­ly the BP oil spill should be it. Even Chi­na, with its ‘boom now, deal with the envi­ron­ment lat­er’ strat­e­gy should be tak­ing a hard look at the Gulf of Mex­i­co.” Extract from The BP Oil Spill’s Lessons for Reg­u­la­tion — Project Syn­di­cate

That word “rethink” is the dis­ap­point­ment in Rogoff’s arti­cle: it’s plac­ard-wav­ing and hand­wring­ing, not analy­sis. It’s a door­way for ‘dread’ rather than pru­dence to enter pub­lic pol­i­cy, bring­ing inno­va­tion to a halt in the name of ‘pre­cau­tion’.

Curi­ous­ly, Rogoff sees this at the start of his arti­cle where he acknowl­edges that dread unnec­es­sar­i­ly halt­ed nuclear pow­er devel­op­ment in the Unit­ed States, and many oth­er places, for thir­ty years after the Three Mile Islab­nd dis­as­ter caused a ‘rethink’.

The les­son that Gov­ern­ments should learn from dis­as­ters such as the Gulf of Mex­i­co oil spill is only com­mon sense: learn from this and try to pre­vent a rep­e­ti­tion of the prob­lem, prob­a­bly by reg­u­la­tion (threat of sanc­tion). In prin­ci­ple it would be pos­si­ble to inter­nal­ize some iden­ti­fied risks in the price of e.g. a license to drill but, as Rogoff acknowl­edges gov­ern­ment advi­sors are not much good at strik­ing the right price for a par­tic­u­lar ven­ture.

Indulging the rhetoric of blame (‘witch hunts’) after a dis­as­ter eas­i­ly obscures the ben­e­fit we get from a risky enter­prise such as off-shore oil/gas drilling. The foren­sic objec­tive should be to iearn from the disaster—rather than sim­ply to appor­tion blame—because learn­ing is essen­tial to growth (and wel­fare) while ‘jus­tice’ is not, how­ev­er much we might wish it were oth­er­wise.

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