Steven Chu as Energy Secretary

President Elect Obama has named his new Energy Secretary, Steven Chu a brilliant man who won the Nobel Prize in Physics in 1997 for cooling and trapping atoms using lasers. His selection signals a shift in priorities for the department from development of nuclear weapons and spent fuel disposal to alternative energy development and reduction of greenhouse gas emissions and therein lays my disagreement with the president elect.

For now, I will set aside any discussion of externalities such as greenhouse gasses, and focus on economic organization. It is the same disagreement that I have with my father-in-law, an engineer and former employee of the International Atomic Energy Agency who held diplomatic rank with the United Nations. He's a smart guy to and a good man. He believes more in a top-down organization of society in which politicians have broad visions for society's direction. They present these visions to physicists, engineers, and others even if they are not workable today. In the long run, ten to twenty years, scientists overcome the barriers and implement the politicians' vision.

I believe in a more spontaneous organization. When traditional energy sources become expensive, individual consumers acting in their own interest, change consumption habits, switching to more efficient vehicles, refrigerators, insulating homes, etc. Companies selling these products are incentivized by profit to increase their efficiency. Energy consuming firms also demand more energy efficient equipment, and their suppliers are incentivized by profit to provide it.

Simultaneously, energy producing businesses are incentivized by high profits to expand energy production. If one source of energy, say oil, becomes expensive they will find the next best source and when it is cost efficient bring it to market.

When push comes to shove, I trust the private sector's ability to produce cheap alternative energy through self interest more than the government's ability to produce it through benevolence.