I want to go point by point on your post, then general comments:

1. You're angry about biofuel subsidies, I'm angry about biofuel subsidies, alot of people are angy about biofueld subsidies.  The Federal government hands out the subsidies.  Since the Federal government hands out the subsidies, the argument seems to go, the Federal Government can't intervene in the economy in any shape or form -- except somehow for carbon taxes, or things that "shape" the market.  This is a form of "we broke the government so it must be bad", that you also display in bringing up Katrina and the abysmal record of the Bush Administration.  The obvious answer is to get rid of biofuel subsidies, not the government.

2. Then the government gives subsidies for a Prius.  That is almost as dumb -- well, no, a distance from being as dumb -- as giving people a tax break on a 6000 pound car because that means it's a business expense, so SUV makers make cars that are 6002 pounds.  I'm actually not sure what Galbraith means by mandate here.  If he means, the government decides what kinds of products can be sold -- I believe Australia is mandating CFL's instead of incandescent lamps -- why is that different from mandating that companies can't pollute?  There is a huge controversy here in Great Lakes land about BP polluting them, what should the government do -- set up a pollution cap-and-trade?  Would that make you feel better because it was more "market" based?  Barry Commoner stated the principle some time ago, if something is harmful to the environment, don't regulate it, ban it.  Now, some things might work better with that proposition than others, but banning things (the flip side of mandates) is one of the tools in the governments toolbox.

4. The government supported the spread of sprawl, absolutely, and one other thing you didn't mention, it's been wasting trillions of dollars over the decades on a fat and more or less useless military establishment.  So, as you say, "How do you end urban sprawl? Beats me", well, there are fairly obvious things you could do besides the market-based solutions you proposed, namely, build rail/bus systems in town and city centers  -- which only the government can do -- and actually build mixed use buildings in town centers to kick start the process.  Build urban wind farms and solar farms.  Build more New York Cities.

5. Galbraith is not the last word on how to use the government.  His point about the government bungling, however, is at least honest about the problems in government -- and the bungling and waste of money that we see in corporate America are, if anything even worse, which leads me to some general points:

1. You always seem to point out something that the government does, and you don't point out the complicity of large corporations in the same instance, in particular biofuels.  Who is making biofuel, the Department of Energy?  No, ADM and Cargill and BP, etc.  Who's pulling down the forests?  The government should be intervening more in protecting the forests, not less, because that is the logical conclusion of your attitude concerning the government -- that it should get out of the way.  You seem to think that if the market was "pure", then all the bad technologies would fall away, and the only reason that they are there is because of government.  There!  I even gave you a sort of conservative environmentalist world-view.  It't all governmnet's fault.  I don't know if this is what you think; but do you really think that thinhgs would be better if the governmenht was the way it was before Teddy Roosevelt?

2. And I think I have to end it here (I know, O darn!), we have three main problems that could lead to the end of our present civilization: global warming, peak oil, and ecosystem destruction.  We don't have time to worry about whether the "market" is providing the solution or "the government" is.  I personally don't think carbon taxes or cap-and-trade are going to do the trick, and I think that direct public investment -- central planning, or just planning, whatever -- is the only way we will eventually get out of this mess.  Please explain to me why "picking" solar/wind/geothermal, even by goverhnment fiat, is worse than constructing a vast bureaucratic-laden tax or trading scheme that lets coal, oil, and natural gas continue for much longere than it needs to.  Or how about this one: what if the government banned the use and production of biofuels? would you object to that? would you say, well, it has to die according to the dictates of the market, never mind that it's leading to Desert Earth?

I also learned something today.  It is not the eloquent and sophisticated thinkers of the day that change things, but the people themselves.  This happened after the Great Depression and in the 1960's with the hippies, and I'm sure you could find other examples.  The American Revolution of 1776 comes to mind as well.

The question is whether it could happen NOW.

Onward through the fog

Look how far we humans have come.   It wasn't to long ago that we humans were burning people at the stake for what they believed.    At least this culture, now they bomb people for what they believe in others, but anyway.  From what I read, the people in Jamestown only lived 20 to 40 years if they made it out of childhood.

Benjamin Franklin said while working with electricity (DC) that he thought he was born to early, he thought humans would be able to make great things with this stuff.   Wouldn't he be marveled at what we have done.   (ok, sadden as well)

from movie Gladiator:  the emporiors sister "Is Rome worth one good mans life."

From movie "13 days in october"   Soviet Ambassador to Robert Kennedy:   You and John are men of goodwill, there are other men of good will.

From the movie "untouchables"    The Irish cop to Ness just after the cop got shot:    What are you willing to do, what are you willing to do.

After the signing of the Declaration of Independence:   We all have to hang together or we will all surely hang separately.  

Are there other men of good will.   What is the opinion of professors in the colleges?   What do all the science high school teachers think?    What about all college graduates in Engineering?   What are the percentage of people who are educated in the hard sciences who now think this is a problem and how many can be brought to action in politics and economically?

This has to transend regular party politics.   every college, every science, math, and philosophy department, every professor has to be contacted and moved to action.

What are the actual numbers of professors who think this Global Warming and Fossil Fuel depleation is a problem?

Al Gore made a start, but in his second grand entrance, he appealled to Rock bands and fans.   maybe that was easy to do, but could anybody blame a Rush Limbaugh listener to not be impressed.  The appeals now have to go to academia.  And if they don't go along, well, what can be done.

What are we willing to do?

Second, the examples cited of the state doing stupid things, is in the case of the United States, an example of the state being hijacked by private interests. The solution to that is to limit the power and ability of the corporations to do that. Run that idea past your holiness the market god and see where it gets you. Also, let us take note that the societies that are making environmental progress, are societies that have a level of government management of the economy that would cause your average American to scream "communism!" Finally, if you don't like what the government is doing, organize to change what it is doing. Don't just assume that the state sector is condemned to be an eternal fuck up. (While the market always knows best!)

Third, what is going to save our butts is the assertion of moral and ethical standards over both the private and public sectors. The only thing the Market God cares about is profit maximization. It does not care squat at how that profit is made, whether by killing coal miners, putting children to work, whether it sells tractors or cocaine. It doesn't matter. Buy cheap and sell dear. We should oppose the despoilation of the planet, because it is WRONG. Not because it either helps or hinders the bottom line. How are we going to enforce those ethical standards? Through the only resource we have ever had any hope to control. The nasty state - GASP! Try to appeal to the ethics of our corporations. Go ahead. Don't be surprised when they laugh you out of town.

Randy Cunningham

Randy Cunningham

BioD's point of government failure is an important one, and one that not a lot of people - especially people in the environmental movement - take the time to examine.  The United States government has a terrible record when it comes to creating sensible policies that improve the environment, yet some of us still hold onto that last thread of hope that somehow it will be different this time around.  If only we had the right people in government! They could fix it!

Yes, markets can also "fail", in the sense that they fail to bring us to that general welfare equilibrium point the neoclassical models love - that bliss point, but did anyone expect them to work as perfectly as some model based on some odd assumptions?  No.  However, there is empirical and historical evidence that, by and large, markets work.  Furthermore, it is useless and incorrect to compare market outcomes to textbook outcomes, instead we must assess their effectiveness relative to other means (i.e. command-and-control policies).  

When people don't understand things, they tend to fear and attack them.  In the past, this has defined the relationship between environmentalists and markets - a relationship I hope is on its way out.

Thank you BioD for your perspective and the willingness to take a step back and respond to Galbraith.

"When people don't understand things, they tend to fear and attack them."

I don't think that environmentalists are being naive about the wonders of markets. I think they are basing their suspicion, on the way that the world actually works. Those trumpeting market solutions are those who are wedded to academic never, never lands.

You have to wonder, in fact, whether there has ever been a moment in the past 500 + years of capitalism, that there has ever been a "free" market. So let us look at the actual record of actually existing market economies. I don't think that you can say it has just been a coincidence that as they have spread and consolidated their grip on the globe, we have witnessed a tanking of the world environment. If market efficiency, and benovolence were so inherent to the system, then we would be living in a very different, and much healthier planet.  

The environmental buck stops with market economies as they have developed over 500 years, and those who defend them. It is the market economy, not nefarious government, that has driven the planet into the ground. Now to expect them to undo what they have done, is either blind faith, or sheer lunacy.

Randy Cunningham

Randy Cunningham

That was an excellent point:

let us take note that the societies that are making environmental progress, are societies that have a level of government management of the economy that would cause your average American to scream "communism!"

I should have thought of that!  This is exactly what Michael Moore did in "Sicko", he simply showed what a well-functioning rational health care system looks like.  Do you or anyone else have specific examples or links?  Just off the top of my head, Sweden's commitment to phase out carbon emissions (or is it coal?), "even though" they have perhaps the most government intervention into the economy of any major country, Germany's experimentation with putting solar panels on roofs (and Japan), and Europe's superior train system.

NatureScene -- What exactly is the definition of "the markets work"?  Does that include global warming, not preparing for the end of cheap gasoline, massive ecosystem destruction?  Because all those things are happening within a working market by traditional standards, that is, you could be heading toward apocalypse even if the markets are working perfectly (that's not an externality, that's a reason to reign in the market).  

And to repeat, I (and others) are simply trying to say, be flexible, if the government does something better do it with the government, if the market does something better do it with the market.

Yielding to government with the current system is equivalent to yielding to the people with the most lobbying power.  Yielding to the market is the same, because if you can afford to spend the most on lobbyists, you can afford to game the system; the market is not "free".  

Someday we will stop looking at history and start understanding that humans change and it may be time for a rethinking of what came before.
(see Herman Daly and Benjamin Barber)

Yes, markets work and they don't work.

There's also a market place of ideas.   One that can change how the market place of things works.  

A politician is nothing more than a weather vane.  And the weather vane changes with the wind.

Can we change the wind?

As Marx said, the Philosophers job is to not only comment on the world, but to change it.   (not good to use Marx, but it's true here.)

Are all we to do is post on the internet?

It is difficult to tell people that there's no such thing as a single, unified "market" unless you mean the corner grocery store.  Wall Street isn't a market, but rather a collection of indexes and a clearing house for a bunch of corporate shares in the larger companies - same logic for CIBOT, NYMEX, and all the hundreds of other foreign trading houses.  Computerized trading has smashed any clear understanding of what a "market" really is, and the derivative and hedge funds dealt it a final death blow.  

It was probably the Turnip/Ethanol Derivative Consortium that really did it in.

Economics is all about psychology and if you want to use the term "market" feel free to do so (as long as you feel good about it, not aggressive!).  As long as you understand that money is worth absolutely nothing, you'll be OK.  I'm not kidding about the money thing.  In 1973 we went off the Gold Standard and now all our worth is tied up in commercial paper and Treasury Bonds.  Ergo, money is absolutely useless unless you can convert it into something else.  Nope, sorry, you cannot have gold or silver on payday, something useful you can trade that truly holds value.  

So um, does anybody have any faith that markets and money can solve Global Warming?  Does anybody think a government can solve Global Warming?  I think the people have to figure that out, and if there's a demand somebody will figure out how to make a killing on it.  It's the good ole American Way.

Onward through the fog

What does either one have to do with the price of beans (or carbon)?

The 5% Project

Just off the top of my head, Sweden's commitment to phase out carbon emissions (or is it coal?), "even though" they have perhaps the most government intervention into the economy of any major country...

Sweden has the highest tax rate of any free market economy, which is not quite the same as saying " they have perhaps the most government intervention into the economy of any major country...." Cuba and North Korea are vying for that honor, taking the lead away from China, which has loosened control over its economy. Sweden has the highest tax rate in the industrialized west at about 50%. If high tax rates automatically mean high standard of living and low carbon sources of energy then the answer to all of the world's problems sits right under our noses: the higher the tax rate the better off you will be, suggesting that a rate of 100% would lead to Ecotopia.

I pasted the following from a post I submitted just a few minutes ago:

Compared to the United States, phasing out carbon in Sweden should be like taking candy from a baby. Spin your globe and put your thumb over Sweden. It has a population about the same as New York City, but with the surface area of California. Thanks in large part to the oil shocks of the seventies Sweden gets the vast majority of its electricity from nuclear or hydroelectric and it heats most urban structures with efficient communal geothermal and cogeneration methods like burning waste wood chips--which it has no shortage of considering that seventy percent of Sweden's surface area is covered in forests. This is old school, meat and potatoes energy generation, requiring no new and innovative technology.

In contrast, the U.S. is the third most populous country on the planet. We get about 80 percent of our electricity from coal. We have more cars than we have people. What looks easy in Sweden won't work here any more than it would work in Ethiopia. We are going to have to be a little more innovative.

About the only thing they use fossil fuels for is transportation. Getting rid of that should also not prove to be insurmountably difficult when you consider that bicycles have always been very popular there. Just less than half of the people in Sweden own cars. Interestingly enough, according to this source, Sweden is one of "... the lowest taxing countries for car ownership, whatever the size of car, and impose only moderate levels of taxes on car use."

They use more ethanol than any other country in Europe and 90% of it comes from Brazilian sugarcane. Sweden is also starting to use biodiesel and is looking to Indonesia for it. However, unlike our government and most biodiesel enthusiasts I know, they are taking into consideration the environmental ramifications of their biofuels. The Swedish Minister for Foreign Trade demonstrated his understanding of the role of government in giving direction to the free market when he said:

Consumers want to be assured that the environmentally-friendly product they bought is indeed environmentally-friendly or they are likely to not buy it in future.

Unless of course they don't get a choice in the matter as is the case when mandates force it down consumer's throats after having been forced to subsidize it. Our own Imperium biofuel company near Seattle shares his fear of a consumer backlash. I wonder how Swedish consumers would respond if they find that their ethanol is coming from the Cerrado? Thanks to  the incessant whining of environmentalists  consumers (and politicians) are finally learning of these environmental ramifications.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Germany, with a strong system of support for solar, wind and hydro power, has been expanding its use of renewables rapidly and now has 200 times as much installed solar power and 10 times as much wind power as Britain...
Germany has a simpler system of renewables support: a feed-in tariff. This guarantees generators pay a fixed price - several times higher than the market rate - for power generated by renewables and fed into the grid. Companies are encouraged to expand production because of a guaranteed flow of funds. The higher volumes lead to lower costs. The system costs the government nothing, since the costs are spread across all users. Introduced in Germany in 1999, it has added just £1 a month to the average electricity bill. Up to 47 other countries have now introduced a similar system.

Who says market competition brings about the best outcomes?

"Who says market competition brings about the best outcomes?"

How about this instead?

Who says market competition "always" brings about the best outcomes?

or

Who says the market competition "never" brings about the best outcomes?

or

Who says that good governance does not exist?

The answer to all of those questions is "nobody." Are you people incapable of holding two concepts in your brain at the same time? Why do you leap from one extreme to another instead of acknowledge that a free market without good governance to direct it would be just as bad as  no free market at all with only government providing needs?

Jon created a strawman when he said:

"... The obvious answer is to get rid of biofuel subsidies, not the government."

I don't want to have to point out every strawman argument that comes down the road.

Everybody run out and find examples where government leadership is good as proof that the free market, the thing that houses, feeds and clothes you, and gave you a computer to type on and an Internet to disseminate what you type, is bad for you.

When I lobby for some kind of price on carbon, I lobby for good governance because only government can implement and regulate such a scheme.

The system costs the government nothing only because the cost is passed on to the consumer in their electric bill by a "private" company instead of being taken out of their taxes. Corn ethanol simply uses tax money from the consumer instead of sending them a separate bill. No real difference.

Note that the very example you give is a mix of free market and government. The goal of this scheme is two fold. Note also that solar and wind power do not turn  the surface of the planet into biological wastelands of monocrops.

1. To slowly increase the cost of electricity to consumers to motivate decreased consumption by voluntary conservation (as a gas tax would do here). Slow steady increases give people time to finance insulation and efficiency to compensate. Sudden spikes can be devestating.

2. To have adequate renewables in place along with adequate conservation and efficiency when the price of fossil fuels begins to become prohibitively expensive.

The cost of energy is going to go up no matter what we  do and the only hope is to get more efficient (it won't matter if gas will cost three times as much as long as gas mileage is three times higher or if electricity costs three times as much as long as heating and lighting uses three times less electricity).

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

a free market without good governance to direct it would be just as bad as  no free market at all with only government providing needs

Well said!  Now, in the future, we can just argue about whether a particular policy is good or bad, not whether "the market" or "the government" should be doing something, no?