The Surface Transportation Board needs to avoid adding new inefficiencies to supply chains by rejecting a cumbersome proposed regulation on freight railroads.
Reciprocal switching already occurs based on private agreements between railroads. But Democrats, first under Obama and now under Biden, have wanted to give the government more power to determine switching agreements in the name of promoting competition. (For a more in-depth discussion of the regulatory history and effects of mandated reciprocal switching, see my piece from January here.)
February 14 was the deadline for organizations to provide written comments before the STB hearing. The last time organizations were asked to comment, in 2016, a wide array of interests that don’t usually agree came together to oppose the STB regulation. This time, it’s the same story. The STB should listen to the disparate voices speaking out against this regulation and abandon it.
The Association of American Railroads (AAR), in a massive 611-page filing, provides evidence that freight-rail rates have not seen significant increases in the past few decades, which undermines shippers’ claims that the industry has been behaving monopolistically. To understand why reciprocal switching is such a big deal for railroads, it’s helpful to watch this video from AAR that shows how a switch actually works. It sounds relatively simple in the abstract — just switch cars from one railroad to another — but the video demonstrates that a typical switch of one car between two railroads can take six days and involve eight trains, three rail yards, and 68 separate rail operations. That process should only be undertaken when it makes economic sense, AAR argues, not when government bureaucrats decide it would promote some other goal.
Economic analysis from a wide variety of groups concludes that mandated reciprocal switching would not be helpful. The International Center for Law and Economics writes in its filing that “the regulatory solutions the STB offers are in search of competition problems, evidence of which remains conspicuously absent.” The center’s filing argues that market interventions, while sometimes necessary, need to be backed up with evidence, and the STB has not done the necessary work to demonstrate a particularized economic problem in need of solving.
Mark Jamison, a professor at the University of Florida and a fellow with the American Enterprise Institute, draws parallels between the STB’s proposed rule and regulations in the telecommunications industry that were adopted under similar pretexts. His filing provides evidence that purportedly pro-competition regulations in telecommunications “generally slowed innovation and led network providers to compete less and invest less.” Those are questions of actual history, not economic theory, and he argues we have no reason to believe the same principles applied to railroads will turn out any better.
Reason Foundation’s filing points out that the STB’s economic analysis is largely based on a study that was released in 2010 based on data from 2008. “The U.S. railroad industry of 2022 looks quite different than the industry of 2008,” Reason’s Marc Scribner writes. “Most strikingly, the sharp decline of coal-fired electricity generation has led coal-by-rail tonnage to decline by nearly half since 2008.” Basing a regulation on data that old is not sound policy-making, regardless of the contents of the rule. Scribner isn’t impressed by the contents either, writing that the STB fails to adequately consider how the rule will affect railroads’ ability to compete with trucking.
The Progressive Policy Institute argues in its filing that “a 2016-vintage regulatory approach is totally wrong for the 2022 economy.” The institute’s chief economist, Michael Mandel, writes that the consequences of supply-chain disruptions we see today demonstrate the importance of prioritizing efficiency in the future. He argues that under the proposed rule, “railroads would have to give a high priority to moving goods in a way that met the reciprocal switching requirements, rather than lowering costs and speeding goods to their ultimate consumers.” The higher costs that would result would then be passed on to consumers, needlessly reducing purchasing power and possibly contributing to inflation.All Our Opinion in Your Inbox
That’s why the American Consumer Institute (ACI) opposes the regulation as well. ACI’s filing argues in strong terms that the proposed rule “would destroy the billions of dollars of annual consumer benefits” that have come since deregulation. ACI’s research found “no empirical evidence of a market failure to justify the calls [for mandated reciprocal switching] by shipping industry lobbyists, whose companies are collectively more profitable than the rail carriers they seek to subjugate.” Small businesses have also been beneficiaries of self-sustaining, deregulated railroads, and the Small Business and Entrepreneurship Council registered its opposition to the proposed rule on similar grounds.
The Intermodal Association of North America (IANA) believes that the proposed regulation in its current form would worsen supply-chain difficulties. Its filing says that the STB’s proposed rule would result in “a decline in rail infrastructure; decreased network velocity; a deterioration in domestic intermodal service; and an adverse impact on intermodal’s ability to compete with over-the-road trucking.” The IANA’s membership includes railroads, but also motor carriers, water carriers, port authorities, and logistics companies — all of whom believe that supply chains as a whole will be made worse because of the regulatory burden imposed on freight rail.
It’s not only the major Class I freight railroads that oppose mandated reciprocal switching. The American Short Line and Regional Railroad Association opposes it, too, saying in its filing that “while short lines often consider themselves ‘shipper representatives’ and we certainly have our share of frustrations with our Class I railroad partners, we see this rule as counterproductive and likely to cause more harm than good.”
Echoing Amtrak’s concerns from 2016, Chicago’s commuter-rail system, Metra, warned the STB that mandated reciprocal switching could cause more traffic delays in the Windy City’s dense railway network.
Aside from economic and operational concerns, there are also safety concerns. Patrick McLaughlin of the Mercatus Center is a former economist with the Federal Railroad Administration, the industry’s safety regulator. In his filing, he points out that switching is an inherently dangerous operation, and mandating more switching for no economic reason needlessly puts workers at risk of injury.
Rail workers aren’t too excited about reciprocal switching, either. SMART-TD, the largest railroad union in North America, opposes the rule for its effects on railroad safety and finances. It doesn’t help workers for railroads to make less money, and the union is concerned that its members could be laid off or face pay cuts if the regulation goes into effect. The Brotherhood of Locomotive Engineers and Trainmen is concerned about the effect the regulation would have on collective-bargaining agreements. Unions aren’t concerned about efficiency like other groups are. They’re just looking out for their members, and they still oppose the regulation.
What about environmentalists? The National Wildlife Federation, along with ConservAmerica, C3, and Third Way, wrote a letter to the STB arguing that the railroad industry “currently offers the most environmentally friendly way to move goods over land.” Freight that gets disrupted by new inefficiencies in railroads doesn’t just disappear. It “could shift to more carbon-intensive modes of transportation,” e.g., trucking. Making railroads less efficient is bad for the environment, too.
At this point, you’re probably wondering who on earth supports this thing. The answer: shippers. The dynamic is similar to that of the Ocean Shipping Reform Act, where shippers are trying to capitalize on dissatisfaction with supply chains to get regulatory changes they have wanted for decades. The Rail Customer Coalition’s letter to the STB argues that the regulatory hurdles that shippers currently face to get mandate reciprocal switching are too high and that “reciprocal switching would empower rail customers, including farmers, manufacturers, and energy providers, to choose a carrier that provides the best combination of rates and service.”
There will always be a strained relationship between shippers and carriers. Shippers are always going to want lower rates, and carriers are always going to complain that shippers are making unfair demands. But in this case, the evidence presented to the STB clearly leans in the railroads’ favor. It’s not often in Washington that economic analysis, consumer interests, small-business interests, safety analysis, organized labor, and environmentalism all point in the same direction.
The 3–2 Democratic majority on the STB has a choice. It can side with the evidence from all those groups that normally disagree. Or it can side with shippers and President Biden, as requested in his executive order on competition. If it does the latter, in the face of all the prevailing evidence, it will be adding new inefficiencies to supply chains at the worst possible moment.
A significant portion of the $751.7 billion spent annually on K–12 education is used to purchase non-public goods and services.
In a recent tweet, journalist Nikole Hannah-Jones, creator of the 1619 Project, recycled a common refrain against school-choice programs, noting that “they funnel public dollars into privately run institutions.” Similar talking points are being used in Michigan, Texas, and other states to block policies that give families access to their students’ education dollars and more opportunities for their kids.
This argument is misguided and ignores the fact that public education wouldn’t exist without the private sector. The reality is that much of the $751.7 billion spent annually on K–12 education is used to purchase non-public goods and services.
The wheels of commerce are spinning well before the morning bell rings, with public schools spending over $27 billion annually on transportation services. Manufacturers such as Blue Bird — a publicly traded company that recorded $1.019 billion of sales in 2019 — supply the nation’s 480,000 yellow buses, and about one-third of school districts outsource bus services to private contractors, saving public schools millions of dollars each year.
Without these companies, millions of students would be stuck at home, but that’s only the start. School districts also partner with private entities to build the schools, playgrounds, and athletics facilities they rely on each day.
Nationwide, spending on capital consumes roughly 10 percent of all K–12 education dollars each year, totaling $76.3 billion in 2019 alone. Districts finance much of this spending by issuing municipal bonds, which require private-sector assistance from investment banks, attorneys, and ratings agencies and are purchased by investors such as money managers and insurance companies.
For their part, public-school advocates — including teachers’ unions and other school-choice opponents — almost always support bond referenda, despite the cadre of private actors that profit from them.
Once bonds are approved, school districts hire architecture, engineering, and construction companies to do the work. For example, construction giant Balfour Beatty contracts with districts across the country from Texas to California and has completed over $500 million in projects for the public schools in Wake County, N.C., alone.
Inside classrooms, a similar story unfolds. While nearly half of all education dollars are spent on employee salaries, benefit expenditures for things such as pensions and health insurance account for 21 percent of spending. This includes teacher retirement contributions that are made each year to massive pension funds that invest in equities, real estate, and other financial vehicles that help fund managers diversify risk and hit performance targets. Teachers have a vested interest in U.S. economic growth and benefit from the success of corporate giants such as ExxonMobil, Amazon, and Berkshire Hathaway.
Schools are also increasingly reliant on technology companies to supply computers, tablets, and software solutions that support instruction, and it’s estimated that $26 billion to $41 billion is spent each year on education tech. Similarly, states depend on private firms to administer statewide exams, such as the $388 million in contracts Texas awarded to Pearson and Cambium Assessment.
In some cases, school districts even pay private-school tuition for students they can’t serve. The National Association of State Directors of Special Education says that about 1.5 percent of public-school students with disabilities are placed by their districts into private schools. This practice helps families obtain specialized services and means that public-school districts are already doing exactly what school-choice opponents fight against — sending public dollars to private schools. The only difference is that district bureaucrats, not parents, are the ones calling the shots.
Of course, not all these examples of private-sector partnerships are wise investments or the best use of scarce resources. After all, K–12 transportation is in desperate need of reform, and construction projects can be wasteful. The real issue that opponents such as Hannah-Jones have with school choice isn’t with public dollars going to the private sector, but with competition for students and their per-pupil funding. The public-school monopoly gets weaker when parents can access their education dollars and use them for the private services that they choose, and that’s a good thing.
In what amounts to state-orchestrated discrimination, California is using bizarre grounds to mandate racial and gender diversity on corporate boards.
The trial commenced this week in Crest v. Padilla, a lawsuit filed by Judicial Watch to enjoin California from requiring that publicly held corporations headquartered in California include at least one director who “self-identifies” as a woman. Pursuant to California’s SB 826, by the end of 2021, up to three self-identified women will be required, depending on the size of the board.
In September 2020, two years after enacting SB 826, California went even further, when Governor Newsom signed AB 979 into law. That law requires that California-headquartered public companies also include at least one director from an “underrepresented community,” and by the end of 2022, up to three such directors, depending on the size of the board. The statute defines a “director from an underrepresented community” to be an individual who “self‑identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self‑identifies as gay, lesbian, bisexual, or transgender.” Arabs, Armenians, Persians, and Turks, who often are viewed as non-European whites, are excluded from the list of favored minority groups.
A small board could appoint a Rachel Dolezal who self-identifies as an African-American woman to satisfy both requirements. Or, if the board can find biological white males who identify as Alaskan Natives or use the pronoun “she,” they (meaning all of them, not “they” in the royal or gender fluid sense) could satisfy both statutes with a board consisting only of confused white males.
California’s corporations are rejecting this social engineering. In March 2021, the California secretary of state reported that of 647 companies to which SB 826 applies, only 311 reported compliance. At least 50 companies avoided compliance with both statutes by leaving the state or going private.*
Judicial Watch has also sued to enjoin AB 979. That action is in its discovery phase. Both Judicial Watch actions were filed in state court and assert that California laws pertaining to race, ethnicity, sexual preference, and transgender status are presumptively invalid, and taxpayer-funded resources may not be used to implement such laws absent a compelling government interest. Judicial Watch alleges that the California legislature knew these bills to be unlawful when enacted and that the laws cannot pass strict scrutiny.
Though a Judicial Watch victory on SB 826 likely would presage a victory in its similar action against AB 979, three federal lawsuits have potentially greater national implications. Merland v. Weber and Alliance for Fair Board Recruitment (AFBR) v. Weber allege that both statutes violate the 14th Amendment and federal civil-rights laws. The National Center for Public Policy Research last week filed a complaint with the novel premise that the California statutes violate shareholder rights to vote for board nominees based on merit, free of government-imposed race, sex, and sexual orientation quotas.
When it passed SB 826, California’s legislature did not claim that California companies discriminate against female candidates for director. Instead, the legislature cited reports that gender diversity may improve a corporation’s financial performance. For AB 979, the legislature cited reports suggesting that racial diversity among executives might enhance earnings. The legislature did not cite any evidence that racial diversity on corporate boards improves performance, and academic studies have failed to establish that link.All Our Opinion in Your Inbox
The AFBR lawsuit alleges that the reports supporting AB 826 were not peer reviewed, or the result of sound statistical analysis. By contrast, numerous peer-reviewed studies analyzed by Jonathan Klick of the American Enterprise Institute have found no effect, or even a negative effect, from increased board diversity. And a study published last week found “a robust and significantly negative stock market reaction” to California’s gender quota mandate.
Beyond the lack of factual evidence, it is remarkable that progressives now identify profit as a “compelling interest” that overrides the heavy burden of using race, ethnicity or gender as the basis for state-orchestrated discrimination. And, despite the legislature’s rationale for the benefits of diversity, both statutes permit a board to exclude all whites and men. The hypocrisy is stunning.
California is not alone. By 2020, a dozen states had enacted or were poised to enact requirements to enhance diversity on boards, though most of the proposals stop at disclosure. Superficially, that is the approach taken by Nasdaq, which recently received SEC approval to require companies trading on Nasdaq to publicly disclose board diversity statistics and explain any failure to have at least two “diverse” directors, including one who self-identifies as female and one who self-identifies as either an “underrepresented minority” or LGTBQ+.
It has been axiomatic that the purpose of a board is to maximize shareholder value. Doing so requires experience and acumen. The Sarbanes–Oxley Act and the Dodd–Frank Act place onerous obligations on directors, particularly independent directors and members of the audit committee. The SEC has long required public companies to disclose biographical information about each director. In 2009, the SEC also required companies to explain “the specific experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director.”
Until fairly recently, a hugely disproportionate share of individuals with the necessary experience and skills to serve as directors were white men. But, by 2018, 25 percent of Fortune 100 board seats were held by women and 19.5 percent by minorities. Without government mandates, the boards of public companies have continued to become more diverse. The percentage of Fortune 500 boards with greater than 40 percent diversity has more than doubled in the last ten years.
Not only is this progress insufficient for progressives, but they reject the premise that corporations should maximize shareholder value, or that directors should be selected based on talent. Rather, their priority is “equity,” meaning that jobs are awarded to achieve parity with each group’s percentage in the population, regardless of qualifications.
It is difficult to see how the California laws comply with the Constitution, or federal law.
Racial balancing can never satisfy the compelling-interest requirement for racial and gender preferences. Chief Justice John Roberts succinctly reiterated this in Parents Involved in Community Schools v. Seattle School District No. 1 (2007):
Accepting racial balancing as a compelling state interest would justify the imposition of racial proportionality throughout American society, contrary to our repeated recognition that at the heart of the Constitution’s guarantee of equal protection lies the simple command that the Government must treat citizens as individuals, not as simply components of a racial, religious, sexual or national class.
The U.S. Supreme Court also has held that “racial classifications are antithetical to the Fourteenth Amendment, whose ‘central purpose’ was ‘to eliminate racial discrimination emanating from official sources in the States’” (Shaw v. Hunt , quoting McLaughlin v. Florida ). More than once the Court observed that “distinctions between citizens solely because of their ancestry are by their very nature odious to a free people” (e.g., Rice v. Cayetano  and Hirabayashi v. United States ).
Though the criteria for gender is somewhat more flexible, as Justice Ruth Bader Ginsburg explained in United States v. Virginia (1996), the “inherent differences between men and women” cannot justify the “denigration of the members of either sex,” support the imposition of “artificial constraints on an individual’s opportunity,” or permit government to “rely on overbroad generalizations about the different talents, capacities, or preferences of males and females.” Last year, in Bostock v. Clayton County, the Supreme Court extended the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 to include employment discrimination on the basis of sexual orientation and transgender status.
The Supreme Court has applied prohibitions on state action to a private company when the state requires the unlawful act. In California, the improper acts are specifically mandated by the state, at risk of escalating fines.
The destructive fixation on race and gender has had profoundly negative effects on education, the military, government, science, and other sectors. With the quality of corporate boards at America’s largest corporations now under siege, the outcome will not be any better.
America’s high national living standards lead us to consider things like abundant access to clean water, comprehensive cellular service, and a reliable electric grid commonplace. Much of the rest of the world regards them as luxuries unavailable to many people.
Consequently, we tend to think about these things only when they don’t work. Cloudy water creates a crisis. A cell phone outage leaves us stranded. Failures in the power market leave us, literally and figuratively, in the dark about what to do.
The critics of how the market allocates the distribution of electric power allege competition would lead to more brown- and blackouts. Despite abundant evidence they are wrong, they don’t trust the competitive market system to keep the lights on. Even now they’re waging a campaign to upend the market structure in places like my home state of Virginia, where competition has overall helped maintain reliable and affordable electricity.
Electricity generators in the United States operate under different structures, dictated by state and the federal governments. Historically, utilities have been integrated vertically, creating geographic monopolies on the production and sale of electric power. Unified ownership of the different parts of the supply chain – generation, transmission, and distribution of power – by a single producer/distributor creates exclusive service territories with captive customers.
Economics teaches that monopolies are bad, even at the state level. Dependence on a single source for anything leaves customers without the freedom to decide what’s best. Competition is the consumer’s friend. Just look at the explosion in services offered by the telephone companies thanks to the competition created by the breakup of Ma Bell.
The explosion in content creation driven by the internet is analogous to what might happen to power generation if competitive pressures were introduced to the generation of electricity in states currently lacking choice. There are nuances of course but, in general, the restructuring of power markets would end the distribution monopolies. Existing utilities would maintain control on distribution networks, but in most cases will be separated from the generation of power.
Currently, there are seven Regional Transmission Organizations (or RTOs) and Independent System Operators (or ISOs) in the United States that run competitive wholesale power markets. They facilitate open access to power transmission and operate the transmission system independently of, and foster competition for, electricity generation among wholesale market participants.
In short, they replace the cost-based regulatory model with a market-based competitive model, functioning as “power pools” from which multiple independent utilities can draw and share reserves to make power cheaper for you and me. Over time, they have evolved to optimize generator output over wide geographic regions – again, generally reducing consumer costs.
According to U.S Energy Information Administration data, between 1997 and 2017, increases in retail electricity prices in states with competitive electric markets and monopoly states were about the same, while customers in monopoly states saw a slightly higher percentage increase in rates. A Retail Energy Supply Association found that customers in states that still have monopoly utilities saw their average energy prices increase nearly 19 percent from 2008 to 2017, while prices fell 7 percent in competitive markets over the same period.
In competitive markets, electricity is purchased at market-determined wholesale prices. Customers, you and me, can choose a provider rather than be required to purchase our electricity from our local utility. The monopoly system, equally or more expensive from a price perspective, is often tainted by political corruption and scandal. In the last year or so, scandals involving utilities seeking to influence legislation or secure taxpayer bailouts led to the toppling of the top lawmaker in both the Ohio and Illinois House of Representatives.
“Pick a year, and you will find some scandal among monopoly utilities. The corruption shows no sign of slowing down. Instead, the breadth, depth, and cost of such scandals only seem to multiply,” the Conservative Energy Network notes.
It’s time to pull the plug on the old system. Competition in the electricity market produces cost savings for customers, improves service and reliability, and encourages innovations leading to environmental benefits. The drive to gain new customers that comes once a restructured, competitive wholesale market for electricity is introduced – and which several states are in the process of creating – empowers customers, reduces costs, and keeps the lights on.
America’s financial elite is helping to finance America’s prime strategic adversary.
As a new, more skeptical consensus about America’s economic relationship with Beijing emerges in Washington, Wall Street is growing more tightly integrated with China than ever before. The disconnect highlights one of our nation’s biggest vulnerabilities in our confrontation with China over who will determine the course of the 21st century.
American capital markets are the most open, liquid, and valuable in the world. They are also increasingly a source of funds for China’s most strategically important companies. Chinese companies that produce surveillance technology and weapons of war that could one day kill Americans finance their investments with Wall Street capital.
Historically, both Republicans and Democrats have been weak when it comes to identifying and correcting these kinds of problems. Politicians in my own party have too often been reluctant to intervene over concerns about the “free market.” But things are changing. Faced with the catastrophic impacts of deindustrialization, which has choked opportunity for the American working class, and a growing reliance on an authoritarian regime, more of my colleagues in the GOP have awakened to the dangers of economic policymaking that prizes short-term economic efficiency over all else.
American capital markets are increasingly a source of funds for China’s most strategically important companies.
But just as many Republicans have grown more skeptical of big business’s cozy relationship with Beijing, large swaths of America’s financial and corporate sectors are making a play for a new base of political support—this time complete with deep-blue, progressive social stances on hot-button issues in our politics.
It’s the height of hypocrisy. U.S. corporations with lucrative business ties to the Chinese Communist Party will boycott states here over anti-abortion laws, while Beijing systematically sterilizes Uyghur women. They routinely inflame divisive race issues within the U.S. while marginalizing African American actors or erasing Tibetan characters to keep Chinese audiences happy.
And in instances when the U.S. government has acted, our financial sector, fearful of losing out on a lucrative investment opportunity, often intervenes to protect state-tied Chinese firms. For example, after the Trump administration called for the delisting of Chinese companies tied to Beijing’s military from the stock market last fall, it was Wall Street that initially went to bat to ensure that three Chinese telecommunications firms complicit in state censorship, China Telecom, China Mobile, and China Unicom, were spared. (After several reversals and a failed appeal process, the three ended up recently delisted.) And just this month, the Biden administration allowed one of China’s biggest companies, Xiaomi, to relist on U.S. exchanges.
Democrats should be skeptical of the opportunistic progressive social stances in our finance and tech sectors. The presence of a diversity and inclusion czar does nothing if a company is profiting off of slave labor in Xinjiang.
More fundamentally, Wall Street advances the goals of the CCP with its investment in China, which needs American capital to grow its economy. As China has evolved from an export-driven economy to one reliant on state-led investment, it needs foreign investment to help pay for its debts. Investing in China funds the Chinese companies powering Beijing’s economic strategy and industrial policy.
In 2019, the United States became a net investor in China for the first time in history. How did this happen? The answer lies with the fund managers. As China has “opened” its market to American financial companies and sought the listing of its businesses on American stock exchanges, the portfolios of American investors have been increasingly invested in Chinese companies. Many well-meaning Americans may inadvertently be propping up a genocidal regime because Wall Street does it for them.
Furthermore, Chinese firms listed on U.S. securities exchanges are widely shielded by their government from the full oversight of American financial regulators, putting teachers’ pensions and retirees at risk.
Thankfully, there are legislative solutions that both Republicans and Democrats should be able to support. First of all, we should ban any U.S. investments in Communist Chinese military companies. This is part of the reason why I first introduced my Taxpayers and Savers Protection (TSP) Act in 2019—to ensure the retirement savings accounts of federal workers and service members didn’t end up invested in Chinese companies tied to the People’s Liberation Army or engaged in human rights abuses.
In instances when the U.S. government has acted, our finan-cial sector often intervenes to protect state-tied Chinese firms.
Similarly, no Chinese company on the U.S. Department of Commerce Entity List or the U.S. Department of Defense list of Communist Chinese military companies should be allowed to access U.S. capital markets—a move that could simply be accomplished by passing my American Financial Markets Integrity and Security Act.
We can also require increased scrutiny of activist investors in companies tied to national-security work or supply chains—particularly ones related to China—through my Shareholder National Security Awareness Act. Finally, we must ensure that Chinese companies, the only ones in the world that routinely skirt U.S. regulatory oversight, are no longer welcome to publicly list on U.S. stock exchanges.
Americans from across the political spectrum should feel emboldened by the growing bipartisan awakening to the threat that the CCP poses to American workers, families, and communities. As we deploy legislative solutions to tackle this challenge, Democrats must not allow our corporate and financial sectors’ leftward shift on social issues to blind them to the enormity of China as a geo-economic threat.
Among the best remembered summits of the 20th century are those of Ronald Reagan and Mikhail Gorbachev. Reagan’s commitment to dialogue with America’s primary adversary and what then-Secretary of State George P. Shultz called his “personal chemistry” with his Soviet counterpart were hallmarks of his presidency. But even more important was the fact that Reagan had a clear strategy for victory in the global contest with the Soviet Union.
Reagan’s approach — applying intensive economic and military pressure to a superpower adversary — became foundational to American strategic thinking. It hastened the end of Soviet power and promoted a peaceful conclusion to the multi-decade Cold War.
Now it is useful to ask if a similar approach would be equally successful in America’s contest with an even more formidable rival, the People’s Republic of China, a challenger with whom the free world’s economies are intertwined and increasingly interdependent.
In 1983, Reagan approved National Security Decision Directive 75, which set the course for an assertive, competitive approach to the Soviets, in contrast to the “live and let live” aspirations of détente. Reagan drew on George F. Kennan’s innovative policy of containment, which acknowledged both the disastrous consequences of a hot war with the Soviet Union and the impracticality of cooperation with a Kremlin driven by communist ideology.
Working from Kennan’s original intuitions, the operational approach that Directive 75 emphasized was “external resistance to Soviet imperialism” and “internal pressure on the USSR to weaken the sources of Soviet imperialism.” Rather than trying to reduce friction with the Soviets as prior administrations had done, Directive 75’s aim was “competing effectively on a sustained basis with the Soviet Union in all international arenas.” Within nine years, the Soviet Union collapsed, worn out by economic pressure, an arms race it could not win and internal political contradictions.
The goal of a competitive strategy versus Chinese Communist Party aggression should be different. The United States and like-minded liberal democracies must defend against the expansion of the party’s influence, thwart its ambitions to dominate the 21st century global economy, and convince Chinese leaders that they can fulfill enough of their aspirations without doing so at the expense of their own people’s rights or the sovereignty of other nations.
These efforts must apply Reagan’s fundamental insight — to win against a rival of China’s magnitude requires sustained pressure against the true sources of the adversary’s power.
China is an economic juggernaut. Through its engagement with the United States and other major markets, it has made itself central to global supply chains, moved to dominate strategic industries and emerging technologies, and built up a military designed to win a war with the U.S. and its allies. Numerous multinational corporations and global financial institutions pump capital, technology and know-how into China. This transfer of capability and competitive advantage can be used against the free world to devastating effect. As the CCP puts it, China is poised to “regain its might and re-ascend to the top of the world.”
To foil China’s plans for preeminence, the United States and its partners should restrict investment into Chinese companies and industries that support the CCP’s strategic goals and human rights abuses. The U.S. should work to block China’s access to Western technology in areas that contribute to military advantage and to construct a new global trade and supply chain system that reduces dependency on China. With India, Australia and Japan, the U.S. must also maintain preponderant military power in the Indo-Pacific to convince Chinese leaders that they cannot accomplish their objectives through threats or the use of force.
In all of this, America and its allies should be confident. At the start of the Reagan administration, the Soviet Union, like China today, appeared to be at the height of its ambitions, exerting influence in every corner of the globe. One decade of focused American strategy helped bring about a peaceful conclusion to what many believed could have been an endless Cold War.
Just as Reagan generated the national and international will necessary to overcome the Soviet challenge, the Biden administration can galvanize efforts to compete effectively with an emboldened China. That effort will bolster the administration’s goal of building back the United States’ strength and prosperity.
The Trump administration’s recognition of that the Chinese Communist Party is a strategic competitor was a crucial shift in U.S. foreign policy. There is now a bipartisan consensus in Washington about the need to sustain a multinational effort to restrict the party’s mobilization against the free world. Applying pressure abroad and fostering growth at home will allow the United States and its partners to prevail in this century’s most important competition, preserve peace, and help build a better future for generations to come.
How do you make a case against capitalism while appearing to defend consumers’ rights and values? You make a movie called The Social Dilemma.
The movie is cleverly done. It purports to oppose manipulation by Big Tech of social media users, calling out advertisers who manipulate people for profit. At the same time, the movie engages in its own manipulation. How does it do so? To quote Elizabeth Barrett Browning, “let me count the ways.”
State the credentials only of the people on your side
Throughout the ninety-four-minute movie, various commentators argue that social media have done great harm. In every case but one, the commentators criticize social media, warning us of its many harms. The movie states quite prominently, without exception, the credentials for all the negative commentators, and the credentials are impressive. The main commentator throughout is Tristan Harris, identified as a former design ethicist at Google and also as president of the Center for Humane Technology. Another commentator is Sandy Parakilas, identified as a former platform operations manager at Facebook and a former product manager at Uber. Yet another is Justin Rosenstein, whom the movie identifies as a major player at Google and then Facebook. A fourth is Shoshana Zuboff, an emeritus professor at Harvard Business School and author of The Age of Surveillance Capitalism. That’s not a complete list.
In the whole movie, only one person expresses skepticism about the idea that manipulation by social media is sui generis. He expresses this view at a panel in which he challenges the aforementioned Tristan Harris. This skeptic points out that newspapers and print media also played on people’s addictions and ability to be influenced. He notes that when television came along, it did so as well, but in different ways. This, according to the skeptic, is just the next thing.
Here’s what’s most interesting about this skeptic. Only because I’m an economist do I know who he is. “That’s Kevin Murphy,” I said to my wife, who was watching the movie with me. Who’s Kevin Murphy? You wouldn’t know from watching the movie. You had to pay close attention even to know it was Kevin Murphy. I had to pause and rewind and only then did I notice that he had a name card in front of him. Probably not one viewer in fifty notices that, and probably not one viewer in a thousand knows who he is. So let me tell you. Kevin M. Murphy is a star economist at the University of Chicago. He won the John Bates Clark Medal in 1997, given in those days only once every two years to the most outstanding American economist under age forty. He’s the only business school professor ever to win a MacArthur genius award. But the movie tells you none of that.
That’s how the movie deals with controversy: allow only one person to challenge the narrative and don’t even tell the viewer who he is. The basic narrative is that Facebook, Google, and other social media manipulate us. But when it comes to manipulation, those media have nothing on the makers of The Social Dilemma.
Hint at the problem without ever showing the problem
The bad actors in the movie’s narrative are advertisers and the wealthy social media firms. At one point in the movie, Parakilas states, “It’s not like they’re [the social media companies] trying to benefit us. Right? We’re just zombies and they want us to look at more ads so they can make more money.” What’s the problem with that? You might think in a standard-length movie, the critics would try to say why. Here’s the amazing thing: they don’t.
So let’s fill in the missing reasoning. Think about why companies would pay social media firms to advertise. It’s to get people to buy their products. If advertising on social media were seen as completely ineffective, companies would pay precisely zero for advertising. The fact that they keep paying and that social media companies get rich by selling advertising, month in, month out, means that advertising is effective.
Wouldn’t you want the critics in the movie to then point to how advertising manipulates our tastes for products, causing us to buy things we don’t “really” want? Amazingly, they don’t.
The closest the movie comes to making a case is near the end of the movie, when Rosenstein states:
Corporations are using powerful artificial intelligence to outsmart us and figure out how to pull our attention to what they want us to look at, rather than the things that are most consistent with our goals and our values and our lives.
But why would they do that? Isn’t it easier to sell us things that are consistent with our goals, our values, and our lives?
The critics point out numerous times that the companies are continuously refining their algorithms to learn more and more about you. They imply that that’s bad without ever saying why. There’s an old saying whose origin is unknown that goes as follows: “Half the money I spend on advertising is wasted, and the trouble is I don’t know which half.”
I think we can all agree that waste is bad. So isn’t it good rather than bad that advertisers and social media are continually honing their tools to put in front of your eyes items that you really have a high probability of buying? They aren’t there yet. Sometimes when I Google an item I’m thinking of buying, within what seems to be minutes an ad for that item shows up on my Facebook page. It’s almost always mildly annoying, either because the advertised item is a brand I don’t want or because I was just exploring and have decided that I don’t want that item at all. Which means that not half, but perhaps 90 percent, of that advertising was wasted on me.
Some people find it creepy that advertisers know so much about us. I don’t, although I understand the feeling. But think back to how advertisers tried to reach us before social media existed. Imagine that you live in a Jewish household. Which kind of advertising by mail would you dislike more: mailers premised on the assumption that you’re Jewish or mailers premised on the assumption that your household is Muslim, Catholic, or Buddhist?
Make up history
In one segment of the movie, Harris contrasts social media with previous innovations, claiming that no one objected to bicycles on the grounds that those who used them would spend less time with their families. Neither he nor the movie presents any evidence for his claim. But here’s what I found with just a little search (on Google, by the way) about early attitudes toward the bicycle. In a 2001 book titled The Ride to Modernity: The Bicycle in Canada, 1869–1900, author Glen Norcliffe quotes an essay by Heather Watts on early cycling in Nova Scotia. Watts writes:
At a time when higher education, women’s suffrage, and the movement for dress reform were all topics of heated discussion, the bicycle became one more liberating influence on the restricted lifestyle of Victorian women. . . . This element of freedom and independence greatly appealed to women. They were no longer left at home, but could go on outings with their women friends or accompany their young man on an equal basis. Once tasted, the new freedom was hard to abandon.
If bicycling was a liberating force for women, and if women were able to ride with their women friends, is there much doubt about whether some critics at the time claimed that bicycling women would spend less time with their families?
Play up the downside of social media with little attention to the upside
I do think the movie scored a direct hit on a huge downside of social media: the purported effects on people between the ages of ten and nineteen. It presented some disturbing data about the effects on young girls, especially those ages ten to fourteen, of media such as Instagram that encourage them to compare their faces and bodies with what seem to be regarded as ideal body types. Here are two shocking statistics about what has happened since 2011, when Facebook and other social media had become widespread: the number of girls aged ten to fourteen per 100,000 who are admitted to hospitals for cutting themselves or harming themselves in other ways has risen 189 percent, and the number of girls aged ten to fourteen per 100,000 who have committed suicide has risen 151 percent.
One critic, Jonathan Haidt, a psychology professor at New York University’s Stern School of Business, gives a straightforward solution: set an age below which your child is not allowed to use social media and limit your child’s use of such media. To say it’s straightforward is not to say it’s easy. It’s probably hard, but parenting is hard.
To their credit, the critics do mention some upsides to social media. Harris says you can get on your smartphone and have a car show up quickly. Critic Tim Kendall, identified as the former president of Pinterest, notes that social media have helped people find long-lost relatives and organ donors. That’s pretty big.
But there are many more upsides. I can find some half-forgotten poem from high school when I remember only one sentence. That happened just last month with this poem. We can check a fact, we can follow friends, not just family, with whom we had lost touch, and we can compare airfares and make airline reservations in minutes, without either the use of a travel agent or even a phone call. I’ve just scratched the surface.
Discuss the upside as if it’s the downside
Critic Bailey Richardson, an early team member of Instagram, says that when the Internet first started, it was a weird, wacky place with lots of creativity. She recognizes that creative things still happen on the Internet, but now, she says, it feels like a “giant mall.”
That’s bad? Some people whom I’m close to have restricted diets because of various ailments. For them, shopping online has been wonderful. One person in particular needs to keep gluten out of her diet. And she is able to find appealing, tasteful, gluten-free items online much more easily than if she had to shop in her semi-urban, semi-rural part of the country. Imagine if she lived in, say, rural Nevada. Shopping online could be a godsend.
Attack wealth when it’s not that of your allies
At many points in the movie, the critics point out disdainfully how wealthy the social media companies are. That raises two questions. First, is there some chance they got that way by making things we want more available? Answer: yes. Second, how wealthy are these critics? Answer: very. Critic and investor Roger McNamee, for example, is a billionaire. Justin Rosenstein’s net worth is $150 million. The other critics are multimillionaires. Honestly earned wealth is not a mark against the wealthy, whether the wealthy be social media critics or social media firms.
Lay out your real agenda, with no evidence, at the end
Near the end of the movie, probably many viewers are hooked. Then we get to what seems to be the agenda of the critics and the movie makers: to end, or highly regulate, free markets.
Zuboff states, “These markets undermine democracy and undermine freedom and they should be outlawed.” The movie director possibly forgot to insert a sentence or two telling us which markets Zuboff is referring to. Whatever markets she wants to end, that would be a major hit on capitalism.
Rosenstein complains that social media corporations go unregulated “as if somehow magically each corporation acting in its selfish interest is going to produce the best result.” One gets the idea that he’s never read Adam Smith, who indeed did arguein The Wealth of Nations that “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.”
Rosenstein also says mining the earth and pulling oil out of the ground are bad for humans. He claims as evidence of a warped, for-profit system that trees and whales are worth more dead than alive. And then he jumps the shark, or maybe I should say the whale, by saying “we’re the tree; we’re the whale.” How exactly social media companies kill us and how exactly they gain from dead consumers he leaves as an exercise for the viewer.
Various friends told me that The Social Dilemma would upset me. It did. As noted, I found the facts about young girls very disturbing. The biggest upset, though, is that a bunch of critics and a movie director manipulate viewers into not knowing that there is another side to this debate, understate the benefits of social media, and use the movie as a vehicle for a rant against capitalism. Other than that, the movie was great.
If news writers had any integrity, the headlines following the 2020 election would have read like the one on this column. Instead, the media gods who helped put Joe Biden over the top expound on why Donald Trump‘s protests are without merit and just another example of Republican sore-loserism.
The former vice president’s apparent margin of victory is not all that large. At the time this was written it was about 6 million votes out of about 150 million cast. That works out to about 4 percent and could, depending on recounts, slip lower.
In the states that appear to be making the difference—Arizona, Georgia, Michigan, Pennsylvania, Wisconsin—Biden’s lead is extremely narrow, much as Trump’s was when he defeated former secretary of state Hillary Rodham Clinton to win the White House in the first place. It’s hard to argue the man most of the media anointed the new American chief executive before all the votes were cast has a mandate to do much of anything.
Nonetheless, if he eventually becomes president, the calls for him to act swiftly and decisively will be frequent, loud, and—from his point of view—problematic. In the Thursday, November 19 edition of The Wall Street Journal author and political cartoonist Ted Rall argues forcefully that, without the support of progressives who held their nose and voted for him anyway, Biden wouldn’t be going back to Washington and instead would be headed back to Delaware.
Progressives who would have preferred Vermont senator Bernie Sanders may have pushed Biden past Trump in the popular vote and in the states that will determine the outcome in the electoral college, but on almost every other measure they were defeated. By a small majority, the nation indicated it may not want four more years of Trump, but it’s clearly repudiated the progressive agenda.
The GOP may have lost seats in the U.S. Senate but it’s most likely maintained control. The outcome hangs on two runoffs in Georgia—both of which the Republicans are favored to win—unless an audit of the votes pushes incumbent GOP senator David Perdue back up over 50 percent of the vote, where he was for most of election night. Right now, he’s at 49.71 percent, and the 0.3 percent he needs to avoid a runoff might be overcome just by the uncounted votes being discovered across the state.
The Republicans were also projected to lose seats in the U.S. House of Representatives. Instead, they won all the top targeted races, lost no incumbents seeking reelection, and gained enough seats not only to get above 200—a crucial barrier in the battle for the majority—but to put Speaker Nancy Pelosi‘s ability to control events on the floor in doubt. Enough moderate Democrats are saying privately (and thanks to some propitious leaks, publicly) that they’re not willing to walk the plank for her and the “The Squad” is in for a rough going.
Looking around the country, the Republicans picked up one governorship in 2020 (Montana) and the New Hampshire state legislature. This gives the GOP the prized “trifecta” in each state which, when added to the dozens they already had, means that while Washington is gridlocked the GOP can use states to pass the reforms they’ll take national the next time they have the White House.
At the same time the Democrats, who enlisted the substantial fundraising support of former president Barack Obama and former U.S. attorney general Eric Holder in an attempt to flip legislative chambers to Democratic control, failed everywhere they tried. They may have spent tens of millions or more in pursuit of this goal with nothing to show for it. Contrary to late predictions, the GOP held on to state legislatures in Texas and Arizona comfortably when the battle for control was expected to be a close-run thing. And they held the legislatures in Wisconsin, Michigan, Pennsylvania, North Carolina, Georgia and enough other key states that predictions are already being made that, based solely on the upcoming reapportionment of U.S. House seats among the states, the Republicans are headed to a decade-long majority. No wonder Mrs. Pelosi is saying this is her last term as speaker.
Even at the lawmaking level, progressivism was crushed. Voters in California, who went for Biden over Trump by about two to one, rejected an effort to repeal the 1996 Proposition 209 that prohibits the state from considering race, sex, color, ethnicity or national origin in public employment, education and contracting. At the same, in progressive Colorado, voters said “Yes” to a cut in the state income tax rate from 4.63 percent to 4.55 percent. In Illinois, voters rejected a measure to establish a graduated income tax and in Montana voters limited the ability of local governments to interfere with issuing of “concealed carry” firearms permits.
If there’s one takeaway from the 2020 election, it’s that, despite the aggressive support it received from donors, elected officials, candidates for office and the mainstream media, progressivism is on the decline. Heck, Joe “I am the Democratic Party” Biden even rejected it while debating Donald Trump. The course is set and if the new president—whoever it is—is smart enough to follow it then the sailing should be smooth. If not, it’s stormy weather ahead.
In Washington, bad ideas are like bad pennies: They keep turning up.
In early 2019 a group of well-connected Washington insiders was suggesting with the utmost sincerity that it would be best to have the Pentagon in charge of the push to 5G, the next-level communications network. The primary reason for this, they said, was national security and the threat posed by China.
President Donald J. Trump, a man who is in no way soft on China, wisely rejected their advice. In a Rose Garden press conference with Federal Communications Chairman Ajit Pai, he rejected the government-led approach, calling it “not as good, and not as fast.” Instead, he committed to a 5G buildout that would be “private sector driven, and private sector led,” ending talk of a nationalized network.
Or so we thought. The Wall Street Journal recently reported that the idea of a 5G network run out the Pentagon is once again on the table. A new proposal for a government-managed system under the supervision of a single company is once again under discussion. And, as before, the firm the DoD has in mind has little to no experience managing large information clusters.
The reason the idea’s come back has more to do with the swamp-dwellers who profit off big government contracts than with the science involved, the efficiency needed to bring 5G to life quickly, or the ability of firms in the private sector to make it all happen. It’s crony capitalism at its worst.
The best way to get to 5G is to allow the best minds and best engineers in the best firms to develop competing technologies – with the winner to be chosen in the marketplace. The plan being pushed yet again by the DoD gives one company – in this case, most likely Rivada Networks – control of the spectrum and its allocation as well as access to the protected intellectual property of those who’d be doing the job if the Pentagon had not taken the project over. At least that’s the opinion of 19 U.S. Senators who wrote the department complaining the way it wanted to move forward “contradicts the successful free-market strategy that has embraced 5G.”
Somehow what President Donald J. Trump likes to call “the race to 5G” is again in danger of being taken over by the officials in charge of it. Instead of fair competition, a vital future national and economic security project is being influenced unfairly by what leading congressional Democrats including House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., say is a plan “specifically crafted to enrich President Trump’s cronies.”
Partisan hyperbole aside, it’s easy to see Pallone’s point. Building a national 5G network requires more than influential political connections. Rivada Networks, the company lobbying hardest to win the bid, is not exactly known for its ability to build out and manage broadband networks. Its proposal to manage FirstNet, a nationwide public safety broadband system, was shot down due to concerns at the Interior Department over concerns about the insecurity of its technology.
One might think this would give the Pentagon pause, yet Rivada’s advocates within the department say they are confident the company can get the job done and have an operating network functioning within three years. Of course these are some of the same people who have already spent more than a decade and hundreds of billions or more on the development of the new multi-service Joint Strike Fight and still haven’t gotten it right.
Chairman Pai, a national hero for his work preventing the Internet from coming under the thumb of the U.S. government as a regulated utility, has dismissed the effort to get to a nationalized 5G run by the Pentagon as being a costly and counterproductive distraction from what America ought to be doing. The federal government moves slowly by design. Processes that work quickly in an authoritarian country like China don’t work in America. Here, roadblocks and rulemaking are the order of the day. Washington can’t compete with the U.S. private sector. In Beijing, the private and public sectors are indistinguishable.
Thanks to President Trump, Chairman Pai, and others who understand the stakes, America is a lot farther down the road to a working 5G network than people might believe. Thanks to a competitive market where the nation’s three largest carriers have all prioritized building the nation’s biggest, fastest 5G network, we’ll get there faster and in better shape than if we let the government do it.
In late spring, oil prices dipped below zero for the first time ever. Futures contracts for May delivery traded as low as negative $37 a barrel, as producers and speculators paid refineries and storage facilities to take excess crude off their hands.
In some sense, this historic moment was inevitable. Oil markets are completely saturated. Worldwide coronavirus lockdowns have depressed energy demand. And in March, Saudi Arabia and Russia announced they would increase production, thus exacerbating the glut.
President Trump has tried to help beleaguered U.S. producers. He recently mediated a deal between Saudi Arabia, Russia, and other major oil producers, who collectively agreed to cut production by nearly 10 million barrels a day.
But prices are still falling. And now, the White House is toying with other ways to prop up U.S. oil producers, ranging from tariffs on imported oil to direct cash payments to energy companies.
This desire to help energy companies, and the millions of workers they employ, is commendable — but ultimately counterproductive. In the long run, the industry will emerge stronger if the White House allows the free market to resolve this crisis.
This pandemic-induced economic crisis is going to be painful for the energy sector. Cost-cutting and layoffs are already underway.
But the industry is strong and adaptive, and has bounced back from past crises by investing in technology. In fact, economic pressure encourages the kind of innovation and belt-tightening that helps companies thrive in the long run.
The United States last faced low oil prices in 2014 and 2015, when Saudi Arabia ramped up output to try to cripple U.S. producers that specialized in fracking — a technique used to extract oil from underground shale rock. By early 2016, prices had dropped below $30 a barrel, well below what U.S. shale producers needed to break even.
The government didn’t come to the rescue, which forced frackers to get creative. They researched how to extract more oil for less, and came up with a variety of new techniques, like drilling several wells simultaneously and using drones to detect faulty equipment. As a result, the average break-even price for frackers dropped from $69 a barrel in 2014 to an average of $40 a barrel by 2017. Had the government tried to solve the problem by slapping tariffs on Saudi crude, the U.S. oil industry likely would have never set its all-time production record of 13.1 million barrels a day in February.
We can be confident the U.S. energy industry will apply its ingenuity to this crisis, too — because these days, it excels at invention. In 2019, the oil and gas sector increased adoption of digital technologies, including cloud data storage and new software. Over the next five years, digitizing could slash the cost of oil production by almost 10 percent.
By using sensor technology — tiny, data-tracking devices attached to oil-field gear — producer ConocoPhillips recently cut in half the amount of time it took to drill new wells in South Texas. Other companies are using data analytics to search for the best drilling locations.
In short, the pressures of a downturn are likely to encourage even more future-focused transformation. The industry doesn’t need to hide behind tariffs. If we trust the free market to encourage creativity, in the long run, we’ll all benefit from a cheaper and more efficient energy supply.
America used to be the place where, as Emerson is said to have observed, the person building the better mousetrap could be assured the world would beat a path to their door. We were driven by an entrepreneurial spirit that led to an increase in global living standards and produced some of the great advances of mankind.
Nowadays the pathway to prosperity is blocked by plaintiffs’ lawyers, federal and state regulators, crusading consumers advocates, environmental activists and others who believe the only institution on which we can rely to solve the really big problems is government.
That’s a shame because the spirit of free enterprise problem-solving is still alive and well. Everyone who realizes there’s profit to be made coming up with solutions are hard at work doing what so many of the so-called smart people say is impossible.
“We are a nation that knows how to solve big problems when we set our minds to it,” says Nate Morris, the CEO of Rubicon, a technology company at the leading edge of 21st century waste management. “Waste is a big problem, and we should not wait for someone else to try to solve it. We should do the work, we should use innovation and free markets to drive transformation, and we should build a stronger, more resilient economy in the process.”
The numbers alone are scary. According to some estimates over the next ten years nearly 95 million metric tons of plastic waste the United States once sent to China for permanent disposal will have to go put elsewhere thanks to import restrictions.
Whether or not it can be done, an effort must be made to try. Right now there are two approaches: one, as typified by Rubicon’s efforts, relies on innovation, investment, and consumer-driven demand to creates a new infrastructure relying more on the use of recycled goods to manage waste and prevent the build-up of discarded plastics and other items the American shopper depends upon. The other approach, the one government regulators, social justice warriors, and those like them prefer is to the use and manufacture of certain items no matter how expensive, inconvenient, or comparably unsafe the alternatives might be.
On Wednesday Rubicon issued a report, Toward a Future Without Waste, that shows how technology-based solutions can increase the proliferation of sustainable products The evidence comes from its experiences delivering results for its customers, with plenty of examples demonstrating the market-based approach to waste and emissions reductions works. The company found, for example, that local governments could generate significant cost savings while sending fewer materials to landfills through the making better use of technology.
Using the RUBICON SmartCity technology suite “helped the city of Atlanta save up to $783,453 annually while reducing the recyclables going to landfill by 83 percent by adjusting the city’s solid waste service schedule,” according to the report. As one estimate has it, it has the potential to save US cities up to $208 million over the next 10 years through reduced disposal costs, optimized fleets, and other metrics. For cash strapped urban centers like Atlanta, that’s money that can instead be channeled into childhood conservation education and other environmental stewardship projects that can create a pathway to the clean air, water, and environment everyone wants but is so often too expensive to get, we’re told by experts, without draconian changes to the way we live our lives.
Advances in technology have also made it easier to dispose of products that are hard to recycle. The fast-food chain Chipotle partnered with Rubicon to create a mail-back pilot program at 25 of its locations to keep single-use gloves out of landfills. From April 2019 through December 2019, the report says, more than 625,000 gloves were recycled, giving the company plenty of incentive to expand the program to all its stores.
“There are currently two ways to make money from waste. One is by setting up the equivalent of a utility, where big corporations and big government agree to a one-size-fits-all approach, charging businesses and households to haul away their waste and bury it,” Morris says. “The other is a free market-based, dynamic approach: cooperate with others and innovate to help people reduce or reuse more of their waste— and inspire a new generation to build on our progress to bring about the end of waste as we know it.”
This is the kind of private sector, technology-based innovation that can change the planet for the better while adding favorably to the corporate bottom line. It requires no government regulation, no special licenses, and no additional fees to bureaucratic institutions that “feed the beast” while giving us all a cleaner world to live in.