Thursday, July 29, 2010

Let the Rich Guys Spend Their Own Money

Peter Grossman has an excellent column in this week's Indianapolis Business Journal (here) on calls for a "Manhattan Project" to develop low-carbon energy resources. The latest such call has come from The American Energy Innovation Council, which was organized by Bill Gates and several other multi-millionaires and billionaires. They are smart guys who should be able to understand the simple but all-important difference between developing an atomic bomb and alternative fuels:
The Manhattan Project created a product, where the cost was no object, to prove we could do something that would help us win the war. Energy technologies are ones we’ll need to buy, which we’ll do only if it makes economic sense. Government isn’t bad at grand technological feats. It is terrible at intentionally creating commercial products.
Peter is not opposed to government support for basic research and development, but that's not what Gates and his cronies are calling for. They want the government to spend our money in an effort to bring new commercial products to market. As Peter points out, this has been tried before (e.g., with synfuels) and it has failed every time. On what basis should we expect a different result this time? As smart entrepreneurs, Gates and his friends should know better. Peter concludes that we should start taking their calls seriously, when they start putting their own money where their mouths are.

It's unfortunate that Peter's column appeared in a journal with a limited local circulation. It deserves national attention.

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