I have worked for our family company for over 30 years. Summerleaze Ltd was founded by my grandfather in 1928. It was originally (and remains partly) a gravel company in the Thames Valley.
In the 70s we diversified into waste disposal (i.e. filling the holes back in). By the end of the 70s, we realised we needed to do something about the gas coming back out of the holes from the rotting waste (landfill gas), and became one of the earliest investors in renewable energy.
Our initial efforts (with Warwick University) in the early 80s to purify and liquefy landfill gas to run our trucks on came to naught as the oil price collapsed. So we switched to generating electricity. We commissioned our first renewable power station in 1988, which was around the time I joined the business.
There was no market for privately-generated electricity at that time. Electricity was not privatised until 1990. The small band of early-adopters of renewables were pretty free-market, as their main priority was a market for their electricity.
In the course of privatisation, the government discovered that nuclear was not "too cheap to meter", it was too expensive to sell. They needed a way to make it look more appetising, so they introduced a subsidy justified by the carbon benefit. (It is often forgotten that Margaret Thatcher was the first world leader to champion action on climate change.) They called the subsidy the Non-Fossil Fuel Obligation (NFFO), which made it difficult not to provide something equivalent for renewables.
And so the first subsidy for renewables was introduced unintentionally in 1991. In a foretaste of energy policy ever since, it was (a) badly-designed, and (b) a honey-pot for "rent-seekers". The free-market early-adopters were rapidly crowded out by the rent-seekers. We are one of the last of the free-market investors in renewables.
Most players are in the business of persuading the government that they are a special interest that ought to be specially favoured. Government responds by trying to weigh the rival claims, rather than by ignoring them and sticking to the provision of an institutional framework that is blind to these claims.
Politicians, bureaucrats, academics and other advisers over-estimate their capabilities and have a propensity for complex and counterproductive legislation. After a decade of battling these forces unsuccessfully, I became increasingly interested in whether there had been any academic analysis of what my first boss called "the Greater Bureaucracy" and its symbiotic relationship with the large corporations, or as he called them, the "Fat Lazy Bastards" (what we now refer to as corporatism or crony capitalism).
I studied a little economics at university (though my degree is in History), but found it uninteresting. It was bog-standard mainstream economics, and its models seemed to abstract-away most of the reality. I had focused on the practical since graduation. But my search for writing on the Greater Bureaucracy led me to a little book called Bureaucracy, by Ludwig von Mises. It was an epiphany. Although it was written in 1944, it described and explained the world as I experienced it more accurately and clearly than a century's worth of mainstream economic textbooks. I devoured Mises' other works. It turned out that economics could be relevant and interesting, just not as it is taught in most schools and universities.
Mises led me to Hayek (and the rest of the Austrian School of Economics), and Hayek led me to the Institute of Economic Affairs (IEA). I was looking for anywhere in the UK where Austrian economics was still alive. That ruled out most of academia, whose economics departments had largely airbrushed the Austrians from their textbooks. Fortunately, Hayek was central to the IEA's story, and he had not been forgotten there.
I became an enthusiastic supporter of the IEA, and eventually a trustee. It (and sister organisations like the Adam Smith Institute and Liberty Fund) dramatically broadened my economic education. So many schools of thought help to explain the way aspects of the world work: public choice, new institutional, behavioural, evolutionary, experimental, etc. They provide an explicit framework for things of which you had an intuitive sense without a clear anatomy. That even includes parts of the cursed mainstream (aka orthodox or neoclassical) economics, whose merits as thought experiments can come into focus if you strip away the misinterpretation of them as representative or predictive of the real world, except in the loosest sense.
- View recent blog entries
- Member for
- 14 years 8 months