Wednesday, May 27, 2015

Book Review: By the People

The terms ultraright and ultraleft are not symmetric concepts.

Ultraright typically denotes neo-fascist groups, such as Golden Dawn, or France's National Front. The closest American analog might be whatever it is that surrounds David Duke. I have no kinship with these groups. I believe in individual liberty and small government--ultrarights instead assert the fascist meme: We're poor because the foreigners stole all the money. A synonym for ultraright might be far right.

Ultraleft is a more technical term of art, described by Lenin in his famous book "Left-Wing" Communism: An Infantile Disorder. Ultraleftism, far from being a different ideology than mainstream Marxism, instead differs primarily on tactics. Ultraleftists favor terrorism or direct action instead of basic political work. People whose idea of political action is to trash Seattle during trade agreement meetings are ultraleftists. Insofar as it had any political content, the Occupy movement was ultraleftist.

The ur-ultraleftist was Lenin's brother, who was executed for an assassination attempt against the czar. In response to that searing event, Lenin rejected terrorism as a tactic, and indeed, for most of his life opposed political violence altogether. Not because he was a pacifist, but because he thought it was ineffective. In this he agreed with Mahatma Gandhi and Martin Luther King.

The key point is that, unlike my principled disagreement with ultrarightists, the mainstream far Left is distinguished from the ultraleft only by tactics. The Socialist Workers Party (SWP) of my day agreed with groups like the Weathermen and SDS in terms of outcome--a socialist revolution is necessary to overthrow capitalism and to create a better world. But we radically rejected their tactics, which we viewed as not merely ineffective, but downright counterproductive.

More tendentiously, the SWP expanded the definition of ultraleft to include the silly sectarian groups, e.g., the Spartacist League. While they didn't advocate violence or terrorism, they also wanted to short circuit the hard political work of building a revolutionary Party. They'd come to antiwar demonstrations carrying banners proclaiming Socialist Revolution Now, as though that were realistic. (Not that the SWP was any more realistic, but back in the day we thought we were.)

So now comes Charles Murray with his marvelous little book entitled By the People. It is addressed to those of us in the Conservative/Libertarian movement who Murray dubs Madisonians, and presents a tactical way forward for our movement. Mr. Murray's book is one of several that have appeared recently, including Kurt Schlichter's Conservative Insurgency (which I reviewed here), and Charles C.W. Cooke's The Conservatarian Manifesto.

To compare these books, I'd like to redefine the term ultraright in a Leninist sense, to be symmetric with ultraleft. That is, an ultrarightist is a person who subscribes to Madisonian ideals, but who advocates radical, uncompromising (stupid) tactics in the pursuit of those ideals. By this definition the neo-fascist groups are excluded because they are not Madisonians. We don't include by the term wackos like Timothy McVeigh, or the racist militias that supposedly occupy northern Idaho.

A synonym for ultraright (in our Leninist sense) might be Breitbartism, after the late Andrew Breitbart.

The first obvious point is that nobody on the ultraright subscribes to terrorism as a tactic. There is no Madisonian analog to the Weather Underground or SDS. Even the Tea Party fringe, represented by Glenn Beck's Taxpayer March on Washington that drew as many as half a million people, was extraordinarily orderly, to the point of cleaning up after themselves after the march was over. Try as they might, the Leftist media couldn't pin terrorism on the Tea Party, apart from a few ill-chosen signs in defense of the Second Amendment.

So that leaves only the sectarians--i.e., people who demand an instantaneous return to a Constitutional order. This is the Madisonian analog to the Spartacist League. These people are preaching to the choir. They inspire us Madisonians--who among us cannot warm to Sarah Palin's oratory or Andrew Breitbart's courage? But at the end of the day we're only 20% of the electorate. We can't win without finding allies outside of our movement.

And that is the message of Mr. Murray's book. His is a polemic against the ultraright (again, in our Leninist definition). He argues persuasively that Constitutional Governance Now is not a practical or reasonable demand. Too much has changed, both in our society and in the world.

For example, Social Security is manifestly unconstitutional. The enumerated powers of Congress does not permit the establishment of a Social Security system. And yet in a country where life expectancy is now 80 years, and human beings who are not capable of planning that far into the future, something like Social Security is inevitable. Mr. Murray suggests that FDR could have asked for a constitutional amendment, similar to what was done for the income tax or prohibition. That would have been a good idea. But today it is simply impossible to roll back Social Security, along with all the unconstitutional precedents it established.

Similarly, the abolition of the regulatory state is impossible. There are too many institutional barriers to dismantling the EPA, OSHA, and the EEOC, ranging from corporate stakeholders, corrupt politicians (in both parties), a sclerotic court system, and an army of lobbyists. The Constitution as James Madison and Thomas Jefferson envisioned it is gone and buried, never to come back in its original form.

While I think Mr. Murray is too pessimistic, he is certainly correct in saying that electing, say, Ted Cruz as president is not going to make any difference. The problem is both more difficult and more complicated than that. What is required, instead, is something more...Leninist...for lack of a better word. Mr. Murray's strategy has three legs.

  • Compromise. We will have to come to terms with those aspects of the nanny/regulatory state that make sense. This includes Social Security, and some bits of the EPA, etc.
  • Alliances. We will have to find points of agreement with non-Madisonians. We can, for example, unite with Liberals on certain states rights issues, e.g., drug legalization.
  • Discipline. We will need to pick our battles very carefully. Mr. Murray proposes a form of lawfare, but one where the targets are very carefully chosen. For example, he excludes a battle against the tax regime, first because the income tax is constitutional, and second because it reduces our cause to pecuniary issues.
The ultraright approach is represented by Kurt Schlichter's book, Conservative Insurgency. Mr. Schlichter proposes a take-no-prisoners approach that would work wonderfully if we Madisonians were in fact a majority of the population. But since we're not and likely never will be, this is just wishful thinking.

In my review of Mr. Schlichter's book I argued why I believe the welfare state has to grow. I am not in favor of a growing welfare state, but I predict that it will happen. I mention this because Mr. Murray shares my analysis--modern technology will render large numbers of people unemployable. Madisonians have to come to terms with this reality, as unpleasant as it may be.

Oddly, Mr. Murray barely mentions immigration issues. I support relatively free immigration. Mr. Schlichter opposes it, as does Mr. Cooke. I am sympathetic to their arguments, nor do I doubt their Madisonian bonafides. But I will point out that fascist groups (we're poor because the foreigners stole all the money) all oppose immigration, mostly for racist reasons. Unfortunately, arguing against immigration allies us with people I don't want to be allied with, which is one of the many reasons I am pro-immigrant. I surmise that Mr. Murray shares my concern.

Further Reading:

Sunday, May 3, 2015

Book Review: The Frackers

I really enjoyed this book.

The Frackers, by Gregory Zuckerman, is an excellent account of the short history of fracking. It's a spellbinding description of the over-sized personalities that have made the phenomenon happen.

Unlike Silicon Valley, fracking is not the preserve of youth. Indeed, most leaders were older people. The modern founder of the art was a fellow named George Mitchell (not to be confused with the clown politician from Maine), who started work on the idea in his sixties back in the 1980s. He kept doggedly at it until his dying day--at age 94 in 2013.

Mr. Mitchell was born to Greek immigrant parents. His father's name was Savvas Paraskevopoulos, whose first job in America was working on the railroad. The Irish paymaster could neither pronounce nor spell his name, declaring from now on your name is the same as mine: Mike Mitchell. Son George married another Greek immigrant, siring ten children of his own, and settling in Galveston, Texas.

He went on to build Mitchell Energy & Development, turning it into a Fortune 500 company. The development part included Houston's planned community of The Woodlands, a successful suburb. But the money came from oil and gas. For most of his career he was a classic wildcatter.

Perhaps as a retirement activity, Mr. Mitchell became obsessed with the Barnett shale, a geologic feature that underlies Dallas. It was long known that there was natural gas in shale rock, but nobody besides Mr. Mitchell thought it could be profitably extracted. In the beginning he was a minority of one, but already being a billionaire he had some cash to invest in the hobby.

There are three ingredients to fracking's success. First was the use of explosives to crack open an oil well and get the oil flowing. Mr. Zuckerman tells us this practice began during the civil war. Second, in order to successfully remove gas from tight shale, fracking fluid had to be used to open up cracks in the rock, and then to prop them open so that the gas would continue to flow. Mr. Mitchell was the man who put these two concepts together, so we can rightly consider him the father of the industry.

The third key to fracking's success, which Mr. Mitchell did not initiate, was horizontal drilling. This is a practice where a well is drilled down to the gas-bearing layer, and then horizontally drilled along the layer. Mr. Zuckerman reports that this practice originated in a government lab, probably the only positive contribution of the federal government to the industry. It was later refined to a high art by Harold Hamm, founder of Continental Resources.

A second difference between fracking and Silicon Valley is that, in the latter, most of the participants graduated or attended elite schools, Stanford and Harvard being the most prominent. That's much less evident with the frackers. Mr. Mitchell's alma mater was Texas A&M; another common choice was the University of Oklahoma.

Still, generalizations are made to be broken. Aubrey McClendon graduated from Duke University, co-founding Chesapeake Energy at age 28. He comes from a distinguished family, sharing his heritage with a former Oklahoma governor, and the founders of the Kerr-McGee Corporation. Still, as his mother often pointed out, illustriousness didn't translate into a trust fund--Mr. McClendon would have to earn his own way in the world. Despite lacking for money, he did inherit blinding charisma, capacious intelligence, and single-minded drive. He's since made and lost a fortune, and made it again. Today he's a billionaire--again.

His partner was a fellow named Tom Ward, one of 13 children of an alcoholic, hardscrabble farmer from rural Northwestern Oklahoma. He grew up in Grapes of Wrath country. Interested in oil from the beginning, he majored in petroleum land management at the University of Oklahoma. No famous pedigree there, but Mr. Ward also came with a high IQ and a prodigious work ethic.

Chesapeake Energy (founded by McClendon & Ward in 1989) was named for Mr. McClendon's pleasant vacations along Chesapeake Bay--it was always an Oklahoma company. They added horizontal drilling to the tools inherited from Mr. Mitchell. Instead of the Barnett Shale, the company branched out to other fields such as the Austin Chalk and the Bakken. Mr. McClendon raised money and leased drilling-rights acreage. It was left to Mr. Ward to turn those assets into a revenue stream by producing natural gas.

They were successful beyond their wildest dreams--too successful in fact. Mr. McClendon, suave and charming, was an ace on Wall Street and brought in money by the bucket. He used that to buy up drilling rights in odd places where nobody else expected there'd be natural gas. He got it cheap. Through the 1980s people assumed that the US was running out of oil and gas. Through the 1970s gas prices had slowly risen, reaching $2.71 in 1984 (worth $6.28 today). Mr. McClendon assumed he'd make a killing selling gas, which he did.

But Mr. Ward (along with others) was too successful. Fracking was so productive that by the late 1980s gas prices began to go down. By 2012 they reached a low of $1.89. Fracking was no longer profitable, but Mr. McClendon couldn't stop. He kept buying drilling rights and going deeper in debt. Mr. Ward, who didn't like the debt, quit. And eventually Mr. McClendon got fired (only to come back again in a different company).

A third difference between the frackers and Silicon Valley is that no women are involved. Silicon Valley supposedly excludes women, but at least there they make up 10-15% of the leadership--most famously Sheryl Sandburg. But amongst the frackers there are zero women. The men are all highly driven, single-minded, workaholic, and extraordinarily intelligent. In many respects they are all very far out on the bell curve--not just in terms of intelligence. Few women are to be found amongst those very unusual people.

Silicon Valley was and remains an important driver of technological progress. But so far in the 21st Century fracking is the most important new technology. Government played only a very small positive role (along with a somewhat larger negative one). The major oil companies (ExxonMobil, et al.) also ignored the business until it was too late--they remain bit players. This was an industry founded by wildcatters, using their own money and following their own dreams. It is a true, American success story.

Mr. Zuckerman gives a balanced and (I believe) correct account of the environmental hazards. The industry has mostly underplayed those (Mr. Mitchell being a notable exception), an attitude that now hurts them. The environmental critics, on the other hand, have hugely exaggerated the risks involved. Fracking is much better for the environment than any alternatives, especially coal. I'd argue it's cleaner than solar power given the current state of that technology.

Panic-mongering aside, fracking is here to stay. And eventually the technology will spread around the globe. The world is not running out of fossil fuels any time soon.

Further Reading: