Portrait of an Elitist
By Arnold Kling
In today’s business section, the Washington Post profiles energy secretary Steven Chu.
Aides say Chu’s ability to understand and absorb technical information sets him apart from the previous 11 energy secretaries…
“People don’t appreciate what’s going on,” he says, “that we are laying the groundwork for prosperity.”
How do you read the following sentence?
Tough publicity lies ahead when some of the beneficiaries, such as new battery or solar-panel manufacturers, inevitably fail – if there were no risk of failure, private money would step up.
This is the reporter talking. I think many readers would come way thinking that the reason we need public funds in energy research is that private investment will only come in if there is no risk of failure. I know this is not exactly what the sentence says, but I get the impression, particularly reading the rest of the article, that the reporter thinks that way. Presumably, so does the editor.
What the reporter should say is something like the following: suppose that, taking into account the probabilities of success and failure, a project would have a positive return on average. Then presumably private capital would step up. It is the projects that have a negative expected return that require government funding.
When the reporter praises Chu’s technical expertise, the reporter might note that no venture capitalist has hired Chu in order to provide technical expertise on investment decisions. Apparently, they can use other experts to make their decisions. The reporter might ask why taxpayers should be forced to invest their money based on Chu’s expertise, rather than allowed to make their own choices about venture capital investments.
When Steven Chu promotes energy ventures by investing his own money or raising money from voluntary participants, you can write a portrait of him that is as fawning as you like. But what you are doing now is flattering someone who is already so arrogant that the think he is entitled to tens of billions of other people’s money.