Whale Oil Myth

[Ripplemagne]

http://forbiddenfuel.wordpress.com/2011/03/21/whale-oil-myth/

Thoughts?

[Wheylous]

I haven’t researched that exact timeframe to give a judgment (I’ve read only starting around 1865), but I don’t see how this is too relevant anyway. Either way the market provided kerosene. Whale oil might not be proof of low supply (and hence high prices) driving a search for newer technology, but so what?

[Student]

the blog post appears to have been taken down. care to give the jist?

[Ripplemagne]

Here’s a google cache of the article:

Google Search

[Student]

Wow. Really interesting stuff.

The historical question of how big the role of a tax in alcohol played on ending the use whale oil would be interesting to investigate.

The economic question though, I don’t think, wouldn’t change. The primary point would be that the increasing price of whale oil lead to a search for alternatives that was eventually satisfied with petroleum based fuels. It wouldn’t really matter (from an econ perspective) if this increasing price was driven by taxes or declining whale populations.

At least that is how I am reading it. But I am a little confused. Why would whale oil be subject to the alcohol tax?

[vive_la_insurrection]

Maybe a more literal use of the word?

http://en.wikipedia.org/wiki/Cetyl_alcohol

[cporter]

@Student

At least that is how I am reading it. But I am a little confused. Why would whale oil be subject to the alcohol tax?

It wasn’t subject to the alcohol tax. IMO the original author is trying to pull a fast one by justifying his environmental and energy policy recommendations with a nearby but distinct event. In addition, he attacks a straw man.

The author sets up his argument as this:

@article

Take, for instance, the Whale Oil Myth — the idea that the free market, without any government intervention, is fully capable of making energy technology transitions. People who believed in the myth have argued against environmental regulation and energy research.

Pay careful attention to his definition of Whale Oil Myth. This would lead the reader to believe that the rest of his article will attempt to prove:

1. That the free market requires government intervention to make energy technology transitions and
2. as a corollary, that people should argue for environmental regulation and [State-led] energy research, not against.

He continues with various quotes and examples that don’t prove this at all. Instead, they prove that various writers, politicians, and “conservative economists” incorrectly claim that kerosene saved whales, when in fact it was alcohol that saved whales and kerosene later replaced alcohol due to a tax. He even finishes the piece with:

@article

The petroleum industry did not arise in response to market conditions but rather in response to government intervention. Petroleum did not save the whales in the 1860s. Other technologies had already done that. In effect, the petroleum industry was born with the silver spoon of subsidy wedged firmly in its teeth.

The author debunks a Whale Oil Myth, but it isn’t the Whale Oil Myth that he defined at the top of the article. It’s a straw man argument of the same name. Regardless of what he wanted to show, all he actually showed was that the petroleum industry got a leg up from subsidies and that the petroleum industry didn’t save whales. He did not show that government intervention was required for an energy technology transition. In fact, his article contains an example of a free market energy technology transition: the change from whale oil to alcohol-based fuels.

The author further muddies things up in the comments below the article:

@article

As arcane as it may seem, the whale oil myth is a good illustration of the ongoing debate over energy policy. It matters because the implication that conservative economists draw from the “whale oil myth” is that the invisible hand of the marketplace is appropriately the main (if not only) driving force behind change in energy use. Liberals see a stronger role for government.

Apparently, the point here is that government intervention can force a change in energy technologies. I don’t know anyone who has ever denied that. If you shoot everyone who drives a gas powered car, fewer people will drive gas powered cars and the next best thing will come up to take its place. Likewise, if you tax the hell out of a gas powered car, the same thing will happen.

Like the rest of what he wrote, the accuracy of this last quote also has no bearing on his original statements. It doesn’t prove (or even attempt to prove) that government intervention is required for a change in energy technology.