Saturday, June 02, 2012

Big Government: Third Industrial Revolution


Trigger For This Blog

Today, I read the weekly newsletter put out by the German government called “The Week In Germany”. In the introduction to this newsletter it reads “A Third Industrial Revolution - a concept outlined by the American economist, writer and political advisor Jeremy Rifkin and endorsed in 2007 by the European Parliament - is well underway in Germany”. What is well under way?

The Book By The Same Name

Forgive my ignorance, I have never really heard of this economist Jeremy Rifkin or his book by the title “The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World” published in 2011. I also freely admit that I have not yet read the book. The table of content is very coarse and not helpful. The index of this book is also peculiar, basically a list of names.

An excerpt from his book’s website:
“[Mr. Rifkin] asks us to imagine hundreds of millions of people producing their own green energy in their homes, offices, and factories, and sharing it with each other in an "energy internet," just like we now create and share information online.
Rifkin describes how the five-pillars of the Third Industrial Revolution will create thousands of businesses and millions of jobs, and usher in a fundamental reordering of human relationships, from hierarchical to cpower, that will impact the way we conduct business, govern society, educate our children, and engage in civic life.” What a wonderful world! How do we get to this stage of Rifkin’s bliss? By government force only, because it is utopian.

Why Third Industrial Revolution? The era we are living in is anything but a continuation of the more than 200 year old Industrial Revolution. The information and communication revolution we are in will even pale Gutenberg’s printing press. The exponential, accelerating growth of human progress in so many areas is unprecedented. Thus, the premises of this book are obviously in question.

According to Wikipedia his The Third Industrial Revolution is based upon 5 Pillars:
1. Shifting to Renewable Energy
2. Converting Buildings into Power Plants
3. Hydrogen and Other Energy Storage Technology
4. Smart Grid Technology
5. Plug in, Electric, Hybrid, and Fuel Cell based Transportation

His 5 Pillars seem to be to be extremely narrow in scope undeserving of such a grandiose label like Industrial Revolution. Yes, the supply of energy is very important, but so are other things. As any good economist knows there are always competing uses of resources etc.

Judging from the table of content of his book titled “Entropy – A New World View” it appears that Mr. Rifkin classifies nuclear fusion as a nonrenewable form of energy. This assertion was new to me.

His single-minded focus on renewable energy is disturbing. Whether highly decentralized production of energy is a panacea as he puts it remains to be seen. Who knows which forms of energy will serve humans and nature best in the years ahead? Only god knows and humans have to find out by trial and error liberated from government control.

About Jeremy Rifkin

An excerpt about him from his foundation’s website (The Foundation On Economic Trends):
“Mr. Rifkin is the principle architect of the European Union's Third Industrial Revolution long-term economic sustainability plan to address the triple challenge of the global economic crisis, energy security, and climate change.   … Jeremy Rifkin has been an advisor to the European Union for the past decade. [he] advised the government of Spain during its presidency of the European Union …. also served as an adviser to President Nicolas Sarkozy of France, Chancellor Angela Merkel of Germany, Prime Minister Jose Socrates of Portugal, Prime Minister Jose Luis Rodriguez Zapatero of Spain”. Well with advisors like this one should not be surprised about the malaise of the Euro zone. Or does this reflect more on the quality of European, elected leaders?

By glancing at his Wikipedia entry and the about him on his foundation’s website, I suspect he is what Germans refer to as a Weltverbesserer (to my limited knowledge, there is no equivalent English translation, perhaps starry-eyed idealist, do-gooder) and he is a leftist academic. Like many other leftist academics he seems to be prone to shallow thinking. Beware of Weltverbesserer! Humanity has suffered great losses due to such people.

From his bio, I also gather he is a fervent environmentalist, thus his enmity to economics a la Adam Smith is no surprise.

He is the man of the “European Dream” (another of his books), while the American Dream is languishing. “Europeans, by contrast, emphasize cooperation and consensus over go-it-alone approaches to foreign policy.” Has he overlooked that the EU has disarmed to a point of being a cuddly paper tiger.

His ideology seems to be derived from the first and second law of Thermodynamics, which he interprets in a particular way to suit his purposes. Who wants argue with the laws of nature? Adam Smith, according to him, is passé because Adam did not understand these two laws. To quote from an article by him published in the British The Guardian on November 3, 2011 “The reason most economists just don't get it is that they fail to understand that all economic activity is borrowing against nature's energy and material reserves.” Ah, but a genius like Rifkin gets it! Karl Popper would call him a proponent of historicism.

Socialism is dead, long live Socialism

A play on “Le roi es mort, vive le roi”. Central planning is still alive and kicking. Power and control for those who pretend to know what is best for the rest of us.

Is it not an irony of history that the European Union adopted Rifkin’s Third Industrial Revolution? The fall of the Iron Curtain is only a little more than two decades old. I also bet that Chancellor Merkel is beholden to Rifkin’s ideas. Ms. Merkel grew up and lived in the former GDR, while central planning was applied. She is the daughter of a pastor and a PhD in physical chemistry. However, her political approach is more akin to a politburo member.

Or in Mr. Rifkin’s own words found in an interview with the Huffington Post dated 9/26/2011:
“Question: Other parts of the globe, particularly Europe, appear to grasp the trends and solutions you suggest in your book. Why are Americans lagging in this regard?
Rifkin: One of the reasons an overarching new economic game plan has never been rolled out is not just because we need to cut back public spending and reduce government deficits, but because the administration is missing, to quote former president George W. Bush, the "vision thing." … What Obama is lacking is a narrative. … If President Obama clearly understood the underlying dynamics of the five-pillar infrastructure of the next great industrial revolution and how the parts connect, he might have been able to sell the American public on a comprehensive economic plan for the country’s future.” (my emphasis). If the poor President of the USA only understood the narrative the master planner bemoans.

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