By Fester:
The United States massively and expensively subsidizes local sugar production which means consumers pay higher prices and my soft drinks don't taste quite as good as they could. We do this because of domestic political constraints and interest group politics that lock in preferential treatment to small, vocal and wealthy groups who are able to scream far louder for concentrated benefits than the mere murmurs from the vast majority of people who are minimally harmed by this policy.
It is a stupid policy, but there is a rational explanation for the policy that is rooted in internal domestic politics. There are plenty of policies that are less than economically efficient but make ideological or political sense.
Dave Schuler is arguing that economic inefficiency is an indictment on Iranian nuclear ambitions:
and it�s a waste of Iran�s resources to do so. They can get more
results for less money simply by modernizing their oil production
facilities.
National prestige projects, of which nuclear energy is one, rarely have to pass cost benefit analysis. It would be far more efficient for Iran to open up its entire energy sector to foreign investment and control, but there are strong ideological constraints that prevents this from happening. It would be more efficient for the US Navy to buy foreign designed and built corvettes but ideological and political constraints prevent this as well.
Dave assembles a bit more evidence to argue against peaceful Iranian nuclear intentions, and that evidence is more convincing, but the economic efficiency angle is damn weak.
I'm surprised you didn't mention the chief reason for those ridiculous sugar subsidies. They were designed mainly to screw Cuba.
ReplyDeleteI confess that at one time Schuler's argument carried a certain amount of weight with me. I considered Iran's massive hydrocarbon reserves and their limited low grade uranium reserves as arguing against the reality of their program being for energy production. After a certain amount of to-ing and fro-ing with Steve and a certain amount of link following I came to believe that this program is exactly what it seems: a nuclear power program. The Iranians are known for taking a long view of things and, in retrospective, investing in such a power development program makes sense when you actually have the resources to finance it and not when you start to run low on conventional resources. It doesn't hurt me to admit that I very much believe in nuclear power as a non-greenhouse gas producing energy alternative. I see no reason the Iranians shouldn't think so too.
ReplyDeleteBack in the Shah's time, Rummie backed nuclear power for Iran on purely economic grounds - it was argued that all that oil generated more economic growth as foreign currency than as fuel for power stations. Rummie gave Iran it's first reactor.
ReplyDeleteOn this one, I'd say Rumsfield was right, and that the argument still makes sense.
Regards, Steve