Both candidates for President have talked up energy independence, and laughably, they’ve even set timelines to achieve this — as if we could really completely overhaul our energy infrastructure in anything like 4-10 years without devastating the economy. Even folks who doubt it could happen quickly don’t often question whether energy independence is a good thing.
But they should, cause it’s a pretty silly notion. Economist David Henderson explains:
Energy independence is no more desirable than coffee independence, banana independence, or car independence. The case for free trade does not break down just because the good being exchanged is important, as oil is. It doesn’t generally make sense, if your goal is the wellbeing of country A’s citizens, for country A’s government to impose tariffs or import quotas on a product from other countries. Even if we put the moral arguments against coercion aside, and even if we nationalistically care only about Americans (I don’t care only about Americans), the gains to the domestic producers from reducing trade are less than the losses to domestic consumers.
But isn’t oil a special case because of the “oil bomb” the ability of our enemies to destroy us by withholding oil?
Sure enough, when I laid this out in class last week during a discussion of trade barriers, one of my students quoted Senator McCain’s statement that in buying as much oil from abroad as we do, “we are sending $700 billion a year to people who hate us.”… But I also pointed out that even if we take McCain’s statement as true, notice what McCain is saying: Even countries that hate us want to sell us oil. To paraphrase Adam Smith, it is not from the benevolence of the Saudi Arabian or Venezuelan producers that we fill our gas tanks, but from their regard for their own self-interest.
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