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I have spent some of the last week trying to get inside the heads of America's political leaders.
To me, they are a foreign country. The idea that we can kill our way out of our problems, the idea that science can be overruled by political will, the projection of hatred in order to maintain support – it seems outside the American experience.
But my first beat was in the oil patch. I drank with George H.W. Bush. I supported conservatives in my early life.
And the only conclusion I can draw is that, at the end, these leaders believe life is a zero sum game.
That is, there's a limited market. There is limited power. There are limited resources. If you have, and someone else has not, then you must fight to protect it.
There are many markets which are finite, on either the supply or demand side. The supply of diamonds is limited, so controlling all that supply was essential to the DeBeers business model. You can only eat so much fast food, or drink so many colas, so the share of market held by McDonald's or Coca-Cola has an upper limit.
What oil executives have always feared is monopsony, a monopoly of supply held by someone else. (This was fine when it was held by the Texas Railroad Commission back in the day.) Given how easy oil is to extract (once it's found), given the expense of bringing on new supply, securing control of the monopsony has meant power, and losing it a loss of all power.
I get that. But for most of my career, I have thankfully not lived in that world.
Instead, I've lived in the world of Moore's Law. Supply is not
constrained, and demand doesn't have to be, if you can just imagine new
things to do with computing power and networks. While demand ran ahead
of supply in the 1980s, and 1990s, it now falls far behind it. Laptops
sell for $499 because Microsoft can't waste any more MIPs and chip
supplies are abundant. Moore's Law of Fiber means the Internet backbone
has virtually unlimited capacity, in theory, and Moore's Law of Radios
means the same is really true in the Last Mile.
In my business, the zero sum game is something you route around. You overbuild the Bells and cable operators. You encrypt your emails, if you don't want them read.
In the Bush-Cheney world, however, the zero sum game is the only game in town. Failure to retain absolute power means absolute disaster.
And they have made the kind of world they feared. Were America to leave Iraq tomorrow, the blowback would be horrendous. Saudi supplies would be threatened. Iran would control the Middle East. And the price of switching to Russian supplies might reverse the outcome of the Cold War.
So they think, anyway.
But I don't live in that world, and I don't think the rest of us have to live in that world, either.
I believe that, with a proper floor price, Middle East oil can be replaced, first by Middle West biomass, and then by hydrogen produced from the Sun, the Earth, and water. I believe there are breakthroughs to be made. I believe Iceland and Hawaii can become major energy exporters. So can Arizona.
Those breakthroughs have not yet occurred. The energy equivalent of
the microprocessor is not yet in our hands. But I believe the
equivalent of transistors are within reach. We have solar cell
technology right now.
What helped bring the microprocessor to market, what helped bring the Internet to our lives, was a government commitment to buy. These were products of the Cold War. The Apollo program was a Cold War activity. When government saw an absolute need for breakthroughs, money was no longer an object, and breakthroughs came.
The essence of what must happen in our time is the replacement of the Zero Sum Game – its politics, its economics, and its mental assumptions – with those of Moore's Law. That's the only way to decisively win the present struggle.
I think we're close. I think we can get there for much less than the cost of one year in Iraq. And I believe that, in this case, the rising toll for oil and gas actually works to our advantage. We should take that advantage, set a floor price for energy, and guarantee a market for domestic supplies that come in at or below that floor.
I think of this solution as Open Source Politics in action. But I don't demand credit. I just want to get on with it.
End the zero sum game.
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