Caution to the Winds
Maybe there’s nothing to those predictions that the end of oil is near, or the allegations, such as those by oil-industry veteran Matthew Simmons (MBA ’67), that Saudi petroleum reserves are way less than what is believed. But something’s going on when a fossil-fuels magnate like T. Boone Pickens, the octogenarian billionaire oilman, says it’s time to throw caution to the winds — literally. A big investor in wind power (a special research interest of HBS professor Richard Vietor), Pickens says he’s too old and too rich to care about making more money, even as he spends $58 million in an ad campaign that argues that the United States must immediately get into wind and solar in a big way (http://pickensplan.com).
Ironically, it was Pickens who helped bankroll the Swift Boat ads that in 2004 sank wind-surfing presidential candidate John Kerry, who was far more amenable to alternative-energy initiatives than George W. Bush (MBA ’75). Boone’s 11th hour-conversion highlights a peculiar business penchant: a tendency to shoot itself in the foot and harm its own best interests by hurting the larger economy. (At this writing, Exhibit A is, once again, Wall Street). For decades, many private-sector industries (e.g., oil and gas, automobiles) and their lobbyists and water carriers in Washington ensured that fledgling alternative-energy industries, perhaps America’s best hope for a manufacturing future, would not get the tax, public policy, and subsidy support that King Carbon enjoyed year after year. Sure, business can drive positive change, but it can also stunt it and slow it.
One of the first things that supposedly business-friendly President Ronald Reagan did upon taking office in 1981 was to remove the solar panels that his supposedly business-hostile predecessor Jimmy Carter had installed on the White House roof. Imagine if alternative energy had instead been an ongoing national priority for the last thirty years. Wouldn’t the American economy, the country itself, and indeed the rest of the world be much better off today? Entrenched, short-term interests — business’s inherent conservatism — can stifle its innovative, ground-breaking impact and its inherent progressivism. Is that just a case of markets at work, or a case where markets just don’t work?
