Green zealots want to downgrade Britain in pursuit of ideology.
Innovation in renewables risks making the state even bigger
The Sixties was a decade of engineering miracles, but one of the most astonishing feats is forgotten today: the humble Lunar Orbiter spacecraft took the first picture of an Earthrise, and mapped 95pc of the Moon, including its dark side. Consider what was involved: no camera of the day could take photographs in conditions that were both so bright and so dark. Entirely new lenses and film processing had to be devised, in extreme conditions, on a craft that powered itself.
The pictures had to be seen on earth, so the first space data network - a new internet if you like - had to be invented to beam it back.
It was only 40 years later, after the raw analog video stream was finally recovered and digitised (NASA boffins had originally analysed the video on flickering cathode ray tube TV sets), that the world could see what an achievement it was. In today’s Retina screen era, those photographs are marvellous.
All this was created by small teams of engineers at two private companies: Eastman Kodak and Boeing. Apollo itself was overwhelmingly a private sector initiative, with contractors outnumbering federal employees by over 11 to 1.
So it takes some chutzpah to argue the exact opposite: that this was a triumph of the Big State. Yet that’s what the BBC’s favourite economist, Professor Mariana Mazzucato, argues.
Mazzucato explicitly evokes Apollo in her most recent book, Mission Economy: A Moonshot Guide To Changing Capitalism.
The professor argues that we’ll get more innovation by making the state even bigger. Her book is the latest in a series of polemics that advocate a vastly expanded state, where private enterprise is subordinated to political goals. Or as she puts it, in the cold banalities of academic NGO-speak: “A purpose-driven partnership with the private sector.”
Mazzucato has powerful allies: Labour has vowed to put her ideas into practice. In his Green New Deal proposal of 2021, Ed Miliband promised state funding for a huge range of measures all designed to lessen our reliance on hydrocarbons, or make them more inconvenient and expensive. The list includes the usual suspects - like billions on insulation and more investment in today’s primitive and expensive renewables - as well as support for “innovations” like hydrogen fuel and carbon capture. Spraying subsidies around this like is in effect forcing the private sector to bend to the state’s will.
Now we know how Labour will pay for it all. Wary of the reaction that capsized Liz Truss’ catastrophic administration, it will forgo the capital markets and plunder private pensions instead. Shadow chancellor Rachel Reeves has said she would not rule out forcing retirement funds to allocate some of their money towards fast-growing businesses - in other words, start-ups.We should not be surprised by this, for seizure is very much in vogue with the corporate class too. In March, JP Morgan’s chairman and chief executive Jamie Dimon argued that grabbing private assets was morally justified. “We may even need to evoke eminent domain,” he wrote to shareholders. “We simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives.”And there you were, innocently thinking that the green energy transition was going gangbusters. Apparently not.Spending money on new technology is seductive until we begin to audit where the spending is actually going. Alas, in the Mazzucato-Miliband era, we will not be upgrading anything. In each instance, a superior technology will be replaced with an inferior one.For example, Allam Cycle Carbon Capture, the current favourite, simply makes a clean and efficient gas plant more inefficient.As for hydrogen, the pesky physical nature of the atom ensures that everything from its generation, to its storage, to its transmission are suddenly much more difficult than conventional fuels.For example, converting a two engine turboprop from kerosene to hydrogen increases the engine weight from two to thirteen tonnes. Keeping the fuel safe at –257C adds further weight. Using hydrogen as a battery means only a third of the energy is returned after the conversion process. That means £100 Kwh of energy costs £300. Hydrogen is an anti-Midas “solution” that turns anything it touches from gold to manure. The list goes on: onshore wind is getting more expensive, not cheaper. Batteries are a mature technology, and given the high input costs, we can kiss making those goodbye too, along with the rest of our manufacturing sector. “Seizing private property to facilitate the installation of energy systems that lack the reliability required by a modern economy ought to fail any basic moral or common sense test,” writes Andrew Stuttaford in the National Review.Mazzucato loves to paint herself as the sensible one, the only grown up in her room, and her critics as extreme ideologues. But this is pure projection. As Stuttaford points out, what she advocates is corporatism, a model pioneered by Mussolini in Italy between the wars.There, the state directed what activity took place and who got to do it. Why not go the whole hog and only permit 22 ‘Councils of Corporations’ – instituted in 1926 – that can be brought under political control?Then, as now, capitalism was in disrepute, in what Il Duce called the third and final “phase of decadence”. It’s hard not to look at the behaviour of venture capitalists during the decade of low interest rates and not sense some decadence, too.But at least they were spending other people’s money. Tomorrow, it will be yours. DT.
