The "Problem" of Profit

Profit is a word today full of emotional charge, quickly conjuring images of greedy corporate "profiteers" destroying the environment and exploiting the poorest of laborers. Yet it should be neutral. Profit should be an area devoid of political consideration. It should be universally heralded as a bi-partisan good. Every action everybody takes every second of every day is done for one purpose: profit. Where "profiteers" should be vilified is from the harm they purport onto others, not the simple fact that they are turning profits. In fact, a good legal system should protect profit at all costs. Of course, the true qualifier is WHOSE. Whose profit should be protected? Everyone. Where "profiteers" harm the property and lives of others through devious ways, they should be held liable for the damage they cause, because they are preventing others from profiting, not because of non-sensical positions that profit is bad or motivates evil. Again, everybody every second of every day makes a choice designed to be profitable.

Profit is simply the value of results minus the value of inputs. When we spend our time and labor making a mud pie, after just one taste we realize that this action was a mistake. Our time and labor could have been spent in a better way, for instance, making an apple pie, which we would enjoy very much. Similarly, if we spent two difficult hours making an exquisitely ornate apple pie vs. 20 minutes making an average apple pie and the ornate pie doesn't satisfy us much more than the average one, we could say it was a mistake to make the 2 hour pie vs. the 20 minute pie. As satisfaction-desiring humans, profit is the unavoidable consequence of choice. We naturally attempt to receive the most satisfaction for the least amount of work.

Profit is often associated with cutting corners, laziness, or deviousness lacking respect for others. This is not implied by what profit is, efficiency. If an action or choice is profitable, this does not deter hard work; it simply makes hard work yield more satisfying results. For example, one might vilify using a machine that produces food with just the push of a button, saying that it will make people lazy. Yet, this same machine, if used laboriously, would make huge quantities of food, which could be given to the poor. Similarly, purposefully dumping toxic chemicals onto others' land and other such practices used to reduce costs may improve a business's profit margin, but this is a deceptive view. Once this action is discovered, the company and responsible management's name will be tarnished. Further, if the harmed parties discover the damage and hold those responsible liable, such actions will doubtfully be considered profitable, both fiscally and socially. In any case, we could consider such actions profitable only as long as we dismiss the negatively effected values of the damaged parties. True profit delivers benefits without imposing external consequences.

Profit is often associated with material greed, or selfishness. This is due to two causes. First is its view as individual satisfaction, which is often viewed in the puritan sense of hedonistic slavery to the desires of the flesh or pride. Second is its use solely as a business term, a measurement made in dollars, an indicator of economic power.

From the self-satisfaction perspective, profit is not the root problem, where there is one. Satisfaction can take a variety of forms that many would agree are virtuous. For example, if you get a good feeling by feeding the poor or unable, few would say pleasing your desires as efficiently as possible would be a bad thing. Self-satisfaction can take ugly forms that impose dissatisfaction onto others. Yet, this problem has nothing to do with profit. We could again say such isn't even true profit, when you take into account those harmed. The true problem is why we occasionally desire evil over good. Attempting to blame profit for evil is no different than blaming free choice.

From the business perspective, profit should not be treated adversely. Large profits often receive a negative public light, yet the most profitable businesses best serve the public. They buy things that not many people want and turn it into something that people highly desire.

The argument against this is that they would better serve the public by aiming for no profit by reducing prices, so that revenue matches costs. Thus, their pricing reflects simply their desire to make tremendous gains for themselves. This is simply ignorance of how free market pricing works.

Prices are set by supply and demand, not price gougers. In other words, producers cannot increase their profit simply by selling their products for ever-increasing prices. Prices attempt to match the amount people will buy at a certain price over a given time period with however much producers can supply in a given time frame. In this view, prices attempt to limit the number of buyers to those who truly value the end good. If price is too high, supply will exceed demand, and there will be surplus supply to be dealt with, perhaps requiring additional costs for warehousing. If price is too low, demand will exceed supply, and there will be a shortage. While many believe shortages are ok, as long as more are able to afford ___ when it is in stock, they are missing a bigger picture. Shortages hurt profit margins, and profit margins increase the available future quantity of goods while decreasing their price. In other words, equilibrium pricing is the most beneficial to the public in the long-run.

Let's think a little more about this. Let's do it in terms of filet mignon burgers. Filet is expensive meat, rarely used to make a hamburger. Obviously, most people prefer filet cooked as a steak instead of as a burger. If one attempted to run a business making filet burgers, he would find few orders for $18 burgers, almost surely greater than the amount of burgers he can make in a work day. So, he decreases the price until he finds a price where he sells the same amount of burgers he makes everyday. However, at this price, his revenue is less than his costs; he has negative profit. Thus, he will go out of business. What this is really saying is that given some limited resource, the public would rather purchase the raw ingredient, filet mignon, than the final product, the filet burger. Thus, the public is better off without this business.

Now, consider the opposite: a guy who makes filet-quality steaks out of ordinary ground meat somehow. If he prices his steaks at cost, he finds he runs out of steaks very quickly. Rather, he increases prices until they are competing with other steak restaurants. Yet, because his costs are much lower, his profit margin is much higher than his competitors. This highly favors the public, as it effectively reduces their cost for steak.

High profit margins tend to reduce the price per quantity of any good, not raise it. Profits can be used to expand production and supply, which will require a lower price to clear the market. Where business owners choose to keep their profits rather than re-invest, there will likely be competitors to enter the field, expanding the total supply of such products, lowering the price.

The only means around this is to restrict competition. The best means to do that is via coercion, or the threat of violent force. Such actions and privileges are virtually always associated with government, the largest coercive monopoly found in any society. Today, government regulations, tax schemes, subsidies, and other market distortions are used by big businesses to restrict their competition and thus supply, allowing them to yield higher profits. But profit isn't the problem. Profit is good. It's the market restrictions that are bad.

...and again, I wouldn't call that true profit because it doesn't factor in the negative externalities.

Deficits

Federal gov't deficits* in terms of GDP, TMS (True Money Supply, approximated here as "M2 minus" minus "Retail Funds"), M1, M2, and cost of living** (approximated by CPI - all items).

*This includes Obama/Bush's planned $1.6 trillion fiscal deficit for fiscal year 2008-2009.

**right axis

M1 is off the charts, but it should be noted that sweeps and electronic transactions have made it virtually irrelevant and shouldn't be taken too seriously.

Cost of living must also be qualified.  The cost of living is generally falling due to greater technology, capital accumulation, and division of labor.  Thus, the further along the timeline we go, the greater these numbers are amplified in comparison to money supply.  In this respect, this data series cannot be dubbed as "time-neutral".

GDP is not "off the charts" but it is heading that way.  Note that it already exceeds Great Depression deficits.  If GDP shrinks in the next few years, this figure should be even larger.  Only WWII is more extreme.  M2 reinforces this observation, and is possibly the most "time-and-money-supply-neutral" way to look at this data.

WTC 7 investigation finally released

Many 9/11 conspiracy theorists have always pointed towards building 7 as supportive of their case. This building supposedly fell not due to impact from an airliner or massive amounts of debris, but simply due to fire. This would be the first time a steel-framed building ever fell due primarily to fire. Building 7 housed a variety of government agencies, most notably the SEC and the CIA. It fell even "cleaner" than WTC 1 and 2, directly into its own footprint (I would like to point out that WTC 1 and 2 were not by any means "clean" collapses). At least one structural engineer has said that he had no doubts that the building's collapse was a product of controlled demolition. One news agency on 9/11 claimed that the building had fallen before it actually fell, despite no information from officials on the scene that they believed the building was going to fall. The WTC's owner mentions in an interview that they decided to "pull" building 7 (a common term to mean a controlled demolition), although he later said he was referring to the firefighter units who were battling the fire.

Well, on August 21, 2008, the NIST has officially released their conclusion of their investigation: NIST WTC 7 report. I guess it takes a long time to find a model that plausibly simulates physics while still achieving the result you want it to. I find it funny that it took them 7 years to come to the exact same conclusion that was given the same day as the attack.

Well, is the NIST, a bureau of the dept. of commerce, going to gain or lose by causing people to doubt the 9/11 commission, supported by a consensus of elected officials, especially the Bush administration? They are uniquely unqualified to handle this case. Who watches the watchmen?

That's not to say that I support any conspiracy theory blaming the gov't for 9/11. It would make sense for the CIA, SEC, and whoever else operated in WTC 7 to make it capable of destroying itself in a fire, when unauthorized agents would have to have access to restricted areas. That's a separate conspiracy theory.

Then again, it is well-known that Bush and co sought to go to war with Iraq before this event and chose to avoid any possible methods of preventing it, including Cheney issuing a stand-down order in the middle of the attack.

Maybe it's just me, but does it not seem that poor defense against terrorism actually subsidizes the defense industry and the Bush administration? In the political short-term, it allows us to initiate foreign wars and their high costs. In the long-run, this subsidizes new weapon technologies, as well as creates terrorist blowback, leading to more foreign wars.

When it comes to 9/11, there are far more things that I know aren't true than I know are true. I don't know if the government was complicit or even involved, or if there were sub-conspiracy theories that were accurate. I don't know what ultimately caused WTC 7 to fall. I do know that government bureaucracies are self-serving, for themselves and the government in general, over we the people. They should not be trusted, especially in cases where their bosses might be suspect to inappropriate actions. I also know that the airplanes that hit the twin towers were not computer-generated holographs used to cover up missiles.

hydrogen power is a joke

This article is the most powerful attempt to dispel the unrealistic dreams of a "hydrogen economy":

http://www.thenewatlantis.com/publications/the-hydrogen-hoax

Freedom or Fascism?

What will you choose?

Too late! America has whole-heartedly embraced fascism. I'm not talking about the rampant racism/nationalism or the totalitarian attempt to create a unified culture. Socially, with the exception of the wars on drugs and terror, American freedom is heralded and fairly well-preserved politically.

Economically, however, we are not free. Nor are we smart.

Economic fascism is known as corporatism, or an economy controlled by corporate-government alliance. Corporations, as typically apparent in fascism, aren't the publicly-traded, privately-owned corporations we see today. In the cases of pre-WWII Germany and Italy, a corporation was similar to the Federal Reserve. Some parts are private and some public. In return for allowing a degree of government control, the government grants the corporation privileges.

The corporatist model is borderline socialism, only without any tenet to redistribute wealth equally or according to need. In many respects, it seems like a palace economy, only instead of owning the entire economy, it only controls the distribution of power that a private venture will require to be successful. Just as in socialism, fascism requires an extremely powerful central government. And just as in socialism, fascism fails miserably.

Our biggest experiment with fascism to date was FDR's New Deal. Here we saw the kind of government control that rivaled Stalin and Hitler. Similarly, we also see the stubborn resistance to admitting failure. For instance, the leading cause of the Great Depression was the inevitable business cycle bust that occurs when artificial credit grows. The already corporatized Federal Reserve was designed to avoid the painful credit contractions associated with fractional reserve banking. In this regard, it failed miserably. In attempting to do the impossible and protect banks from bank runs by cartelizing the entire banking and monetary system, it simply institutionalized fractional reserve banking, causing all banks to over-leverage themselves. When the banks started to drop like flies, and depositors faced losing their money, FDR showed a textbook play from a government official. Blame the market. FDR's response was not to admit that not only central banking but fractional reserve banking was an unsound system that didn't deserve any legal protection. Instead he did the opposite. He said the banking system was sound, and all the problems were being caused by greedy "gold hoarders". So he simply made monetary gold ownership illegal. This was basically a huge privelege to the Federal Reserve, who no longer would have to exchange their paper dollars for the gold they were supposed to represent but the FED didn't have. In the case of failure, fascist corporations are rewarded.

Moreover, the Great Depression didn't really end. WWII and Korea distracted us. Average real wages have declined since the 70's.

Not convinced? Hitler and Mussolini praised FDR for the New Deal, calling it a great experiment in American fascism:

http://mises.org/misesreview_detail.aspx?control=311

How has freedom worked in the economy? In every economic depression prior to the Great Depression, the government's policy was laissez-faire: reduce taxes, spending, and regulation, allowing the market to correct itself. Did such a policy work? Let's put it this way: how many American depressions, besides the Great Depression, have you heard about?

Fascism is marked today by regulatory capture, various subsidies, either direct or as a result of the tax code, and privileges such as exemption from liability. It is the cornerstone of American life now. Nearly any institution you attempt to do business with is touched by fascism. The entire economy uses the money of a fascist cartel. Energy producers, telecoms, farmers, mortgage lenders, local utilities, and domestic automobile manufacturers all receive artificial market power through government force. The most fascist industries, however, are banking, media, medicine, and arms. You will notice all of these industries become less competitive, higher priced, more fraudulent and criminal, and less accountable to market demand. This is the very nature of fascism. It rivals feudalism in its barbarism, and socialism in its impossibility.

Basically, why I'm posting this, is in the vain hope that we don't blame the free market or laissez-faire capitalism when this system collapses. Our president will, and he will propose an even more totalitarian, forcefully controlled economy.

Myths about the FED

Alot of people vilify it. Some think it's a great system. Others don't know what it is.

http://hiwaay.net/~becraft/FRS-myth.htm

This site covers a good bit about it; however, it misses one central point. Check out this section:

COMMERCIAL BANKS AND FRACTIONAL RESERVES

At the base of the s stem, of course, are banks (and credit unions and savings and loans). These institutions are intimately involved in the creation process. This involvement is criticized by some commentators who regard the creation of money as a strictly government privilege which they feel should not be permitted of private firms. However, bank involvement in money creation is almost impossible to avoid. Moreover, the benefits of banks' role in money creation go largely to the public not the banks themselves.

Banks lend out other people's money. Bank customers who borrow the money pay interest for the privilege. The interest pays for the banks' expenses of carrying on business, interest to those who have placed their funds with the banks, and profits to the owners of the banks. Hence, the bank intermediates between people who have spare resources and those who want to use those resources.

Banks (and credit unions and savings and loans) are "depository" institution. In contrast to their intermediaries such as brokerage firms (which invest their customers' money such that the customer accepts the risk of loss), a depository institution accepts funds "on deposit," i.e., on the condition that the bank will return the principal to the depositor regardless of how well or badly the institution invests the funds. Hence, a depository institution absorbs much of the risk of loss in lending out its depositors' money.

Because banks are intermediaries, only a fraction of the money that people deposit with them is kept on hand. Most is lent out. The fact that banks keep on hand only a fraction of the funds deposited with them is no secret, and is apparent to anyone who thinks about it: the lending out of money on deposit is how a bank is able to pay interest to its depositors for their funds. Otherwise, depositors would have to pay fees to the bank for safekeeping their money.

The practice of keeping only a fraction of deposits on hand has a cumulative effect for the banking system as whole. Effectively, it permits the banking system to "create" money. If a given sum of cash is deposited in bank A, and half of it is lent out, whoever borrows it spends it, and the money becomes the deposit in bank B of someone else. Half of that sum is then lent out, spent, and deposited. The process continues until the total amount of deposits is a multiple of the initial amount of cash. In this example, the cumulative total is ultimately twice the initial amount. In practice, the multiple depends on what fraction is kept in hand as reserves by the bank and what fraction is kept as "pocket cash" outside the banking system.

Thus, "fractional reserve banking" effectively permits the creation of money by the banking system to a multiple of the "base" money (typically created by the government). But while the system as a whole creates money, individual banks generally do not. Even though each bank may have in checking accounts a sum that is equal to the money that was deposited with it, as a group, total deposits in all banks are a multiple of the initial amount.

This means, of course, that for a given supply of money in the economy, the existence of money generated by banks through fractional reserve banking reduces the amount of money that the government creates. When governments create money, they profit by the difference between the cost of printing it and its face value. Hence fractional reserve banking reduces the potential income to the government from money creation (called "seignorage).

Fractional reserve banking is a natural, common, and indeed unavoidable process. It is not an artificial construct of law or of central bank-policy. Whenever and wherever bankers, goldsmiths, and traders have accepted funds deposited with them, fractional reserve banking has emerged. It quickly becomes obvious to any businessman who accepts deposits that while some customers come to withdraw money, others come to deposit it. Only a fraction of the total deposits at a bank needs to be kept on hand for normal day-to-day banking. Even an unexpected shortfall one day at a bank can be remedied by briefly borrowing from another bank. The consequence is that a portion (usually the majority) of a country's money supply is generated by the banking system.

This process of lending out deposits can come in a number of forms. Banks years past issued currency (bank notes). Now they mostly use checking accounts. Receipts for deposits have served the same role. Despite any laws that might be enacted to prevent fractional reserve banking, there is a strong incentive for the "banking" system to come up with something of its own that will serve as money because it is in virtually everyone's interest to do so. Depositors come out ahead because their deposits earn, rather than cost, money. Borrowers have access to funds at an interest rate they might not have otherwise obtained. Bankers make profits. Society is better able to channel idle resources into economically productive activity.

Fractional reserve banking in some form or other is virtually impossible to prevent. But this difficulty in preventing the creation of fractional reserves also helps ensure that institutions do not profit excessively from it. Although, in essence, fractional reserve banking confers money creation powers on the private banking sector, the loss to the government primarily goes to the benefit of the public, not the banks. The potential profits from money creation through account expansion gives banks an incentive to expand their activities. This expansion can only come from attracting more deposits. The primary means of attracting deposits is by offering higher interest rates or more services. As a consequence, the banks tend to bid away the excess profits, and the benefits go to customers. Fractional reserve banking is therefore a means of reducing the public's sacrifice of interest earnings to the government. The public, not the banking system, is the ultimate beneficiary of fractional reserve banking.

There is a huge flaw in this logic. It measures wealth in nominal terms. Of course the public is benefited by a system that creates lots of money exponentially when the measure of public benefit is the amount of money everyone has.

But what is money worth? Quickly, the nominal illusion vanishes. The fractional reserve system in America typically grows the money supply by about 8% annually, perhaps higher (I am using True Money Supply data from Mises.org). At this rate, the money supply doubles every 9 years.

The principle point the author misses is that for money, value is inherently related to supply. It may take some time for the value to change in response to money being entered into circulation. And observations of market prices (used to gauge price inflation) don't tell the whole story about how much value is actually disappearing (better technology and economic growth decrease prices without any change in money supply). It is a law of economics, however, to say every additional unit of money created devalues every other existing unit in terms of its former value. Thus, your average savings account at 2% nominal interest actually loses 80% of its would-be value.

Keep in mind, value is abstract. It is a subjective opinion of something's worth, dependent upon an endless complexity of conditions. For example, if you had 2,000 sandwiches and weren't hungry, a single sandwich would seem less valuable than if you only had one sandwich and hadn't eaten in weeks. Value is more complex than simply comparing one thing to another, or one market price in time to another, but for purposes of calculation, that's often what we have to resort to doing.

Logically, it seems simple to understand how increasing the number of monetary units will decrease each of their values. First, most people are not creating money. They are creating work, in the form of services or goods. They ultimately trade this work for the work of others. How much of one person's or one type of work is required to acquire some other person or type's yields an exchange rate. What glues these exchanges together, throughout the whole economy, is money. By determining the exchange rate of one's own work through the public market using money, one discovers his work's exchange rate with every other person and type of work available on the market. Money allows us to find relative value. Increasing money supply does nothing to increase one's relative value, as relative value is ultimately expressed in exchange rates of work, not monetary units.

Money cannot do anything else. It cannot make someone more productive. It cannot transform itself into work. It can only be used to attempt to coordinate work and exchange according to what individuals desire.

The simplest way to express this is supply and demand. If the supply of money goes up and the demand remains constant, its price, or value, goes down. Demand for money is expressed in terms of work. The only means for demand for money to increase is if everyone started working harder (or started using machinery that made them more productive...or the population grew).

More work could be said to benefit society, but if that were true, why would society not choose to benefit itself by working harder in the absence of an inflationary money supply? Leisure and consumption are valuable. Thus, production and consumption ratios are determined by the will of individuals, not the money supply. Just as money supply cannot change relative value, it cannot change production:consumption ratios. Even if it could, why would this be considered a benefit to society? Essentially, such an ideology promotes slavery.

Well, can increasing the money supply help create new, more productive machinery? Again, the answer is no. By devaluing others' savings, the banking system does enjoy a wealth transfer when it creates new money (commonly seen as loaning out demand deposits). By loaning this money out to investors, it can be said that inflating the money supply forces the value of cash and bank savings into investments. The problem here, besides there being a forcible transfer of wealth, is that this causes a business cycle. Given that government often tries to correct the bust portions of business cycles and prolongs them, on the whole, more resources are mis-allocated according to what people actually want. This does not benefit society.

And as people begin to notice that their savings accounts are losing 80% of their value over 9 years, they will cut back on such forms of saving. Since other methods are taxed, it is safe to assume that there is less saving than would have otherwise been. This means generally that capital investment which would result in greater production from less work is exchanged for consumption. In the long run, this makes us poorer, against our will (unless you cater to the idea that government actions are the direct expression of societal will...I do not). Again, this does not benefit society.

The final swan song of fractional reserve banking is that it presided over some of the greatest American economic growth. I believe this is true, but completely coincidental. It follows that every time period should have greater economic growth than the time period before it, so long as there are no huge natural disasters or wars. This is due to increases in science and technology as well as population, which the money system are pretty fairly removed from. A decent money system would show consistent growth. Instead we have seen some serious crashes, such as Japan in the 90's and America's Great Depression...and there may be many more to come.

My response to government intervention in energy

"This is one of those rare instances where government intervention could actually lead to efficiency, vs the usual case of making it impossible. If we are going to get to point x anyway, we should do it at a minimum of cost to the nation, a directive that I don't think we can count on the free market to achieve. Too many competing fiefdoms will put their own profit interests ahead of the greater good and draw the process out longer than it has to take."

*** Why should we think that in this one particular case, the government, as the coercive monopolizer of publicly-acceptable coercion, has any tool that will result in greater economic efficiency? ***

Fiefdom in IP is a much-longer subject to discuss, but it is definitely important to understand that IP law as CURRENTLY exists, with the obvious problems of our patent and copyright system would not exist under a free market. I do see our current model as a burden that promotes rent-seeking and predatory legal behavior over a competitive drive to best please consumers. Unfortunately, the lawyers (which are over-represented in DC) like this arrangement ;-P . I cannot tell you the absolute best means to protect the profit-motive of research scientists, but I am fairly sure it is neither socialism, nor incredulous legal privilege, especially in computer technology where the time-scales involved stretch longer than multiple generations of technology and software. Of course, I do not advocate an IP free-for-all, like China does. In fact, I think the government should back up our companies to sue China for their blatent protection of IP infringement.

As far as promoting ___ energy over fossil fuels, is it cheaper because it's CHEAPER, or is it cheaper because fossil fuels have been made more expensive or alternative fuels are subsidized through government force? If it's actually cheaper, there is no reason to think there isn't huge consumer demand and thus massive private producer interest. If it's simply cheaper after government distorts the market, then we are all paying an INCREASED burden, not a lesser one. Allowing fossil fuels to be freely used until they are replaced in the market means the average American retains a HIGHER quality of life until that day comes, as they are literally paying less per watt, allowing them more purchasing power in other areas (subsidies also raise cost as they require taxes which decrease purchasing power). And in allowing cheaper energy use until that day, it allows more economic means (cheaper, quicker) to get there, with lower research and development costs. In other words, government intervention may have the opposite effects of its intention - delaying the development of technology that is both cleaner and truly cheaper than fossil fuels. Ethanol?

Government bans on nuclear and other restrictions on energy also distort the market. Why spend billions to develop some technology if the government might simply ban it? Why aren't we currently using nuclear? Why don't we have more domestic oil? Had these two policies not been implemented some decades ago, we might not even be having this debate right now. We could be talking about energy being at all-time lows, rather than highs in price. Again, the policy had the opposite of its intended effect, and now we are seeing a new government fix, with the government blaming the market, even though the market can't function freely. Ironically, government is arguing that removing old, senseless restrictions would do little now. Well, what about THEN? If we hadn't done them THEN, then we would see results NOW. In turn, any "problems" it solves now will likely cause greater problems in the future.

Finally, are fossil fuels cheaper only because their users are not held liable for environmental damage? While there are no beyond-reasonable-doubt links to climate change (and little relative damages), there have been cases of coal plants' byproducts blanketing towns down-wind, degrading health and other qualities of life. Yet it turns out that this practice became legally tolerable, sparing it of liability during the Industrial Revolution, to protect big industry. "The gains outweighed the damages." But then why couldn't these businesses just suffer either the damages or the costs needed to prevent them? Instead of having true liability, we have bureaucratized, arbitrary liability. We have an EPA that can shut a business down for doing something environmentally unsound to their own land without harming anyone, while it can't do anything to stop the nation's largest polluter: the US Army. Why isn't GE shut down for its environmental damages and its nearly outright refusals to clean them up? They're "too big to fail". If polluters are held liable for the proven damages they cause, then fossil fuels may have an increased price tag. It is important to remember that protection of life and property is part of a free market, and that protecting businesses from the consequences of their compulsory damages to others is actually a distortion of a free market. Thus, if alternative energy is cheaper due to its lack of pollution, this should be reflected without "government intervention".