Ever since the 1890 Sherman Antitrust Act was passed into law, it has been illegal in America for businesses to conspire “in restraint of trade.” This means businesses cannot legally meet to agree to cut back industry wide production in order to increase prices. Almost as soon as America?s first federal anti-monopoly law was passed, however, businesses began discovering ways to get around it.
A famous example in the economics literature is how coal-mining companies made use of the fact that their labor unions were exempted from the antitrust laws. The companies could not legally conspire to reduce coal production by say, a third, but a four-month strike could achieve the same result! University of Chicago economist Henry Simons discovered in the 1940s that coal mining companies were indeed conspiring to restrain trade, but they were conspiring with their unions, not among themselves. The unions participated in the conspiracy because they and their members shared in the subsequent monopoly profits.
Other industries, particularly those in the energy sector, have similarly sidestepped antitrust laws with the help of the environmental movement, of all things. Environmentalist organizations are their “labor unions.” Consider the extraordinary success the environmental movement has enjoyed over the past 35 years in stopping oil exploration on the outer-continental shelves off both coasts, as well as in vast regions of Alaska, where there are known to be huge oil reserves. Domestic oil production might well be double (or more) of what it currently is without this anti-energy movement, and gas prices would be a small fraction of what they are. (I have been to Prudhoe Bay, where the Alaskan oil pipeline begins. The oil platforms take up almost no space in the vast, permanently frozen tundra and the pipeline itself, which is elevated above ground to transport heated oil to southernAlaska, is the hangout of choice for caribou and other wildlife).
No nuclear power plants have been built in decades thanks to the Dr. Frankenstein-style hysteria drummed up by the environmental movement. It may take well over a decade to procure all the governmental licenses to begin construction of a nuclear plant, and even then the government reserves the right to deny a building permit. This, too, makes energy scarcer and more expensive.
Hydroelectric power has also been stifled by litigation and legislation, and the same can be said of coal-fired power plants. No amount of pollution-control technology is ever enough for the environmental movement, even if it is proven that, because of diminishing returns, additional billions spent on newer technology will not make the air any cleaner. The natural-gas industry is similarly strangled by environmental regulation.
In light of all this, if anyone is to blame for the high gasoline, natural gas and electricity prices that nearly everyone is complaining about, it is the modern environmental movement. The hallmark of this movement is that it is opposed to industrial civilization much more than it is “for” the environment (who isn?t?). It realizes that energy is the lifeblood of modern capitalism, which is why it has waged political war on it.
In some circles, environmentalists are referred to as “watermelons” ? green on the outside and red on the inside ? because of the fact that the leading spokesmen of the movement are all avowed socialists. They can never get enough of denouncing capitalism while crusading to stop the American free enterprise system in its tracks in the name of Mother Nature. Ironically, they have played right into the hands of the energy industry by doing for the industry what it could not legally do for itself: restrict production to such an extent that monopolistic prices can be charged for all forms of energy.
America has gone to war in the past (the 1991 Gulf War, for example) for the purpose of maintaining the flow of oil to fuel the nation?s economy. In light of this fact perhaps a company of Marines should be dispatched to the Washington, D.C., lobbying offices of the Sierra Club, Friends of the Earth and other environmentalist organizations that have done far more to deprive Americans of needed energy supplies than Saddam Hussein ever did.
Thomas DiLorenzo is professor of economics at Loyola College; author of “How Capitalism Saved America” (Crown Forum/Random House, 2004); and a member of The Examiner?s editorial board.
