Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

24 June 2012

Selling Below Cost


[For comment on Mohamed Mursi’s election as President of Egypt, click here.]


Free trade helps avoid war
Tariffs are bad
So is selling below cost, and for similar reasons
Below-cost selling is hard to detect and identify
Conclusion

Free trade helps avoid war. In all the encomiums to free markets that pervade our culture, one important point often gets lost. Free markets can prevent war. At least they reduce the risk of repeating the last century’s wars.

The two great wars of the last century were part imperialistic and part economic. If you ignore the imperial and racist motivations, the economic part seems relatively simple.

Germany and Japan felt deprived. Neither had been a colonizing power. In fact, Japan itself had all but been colonized under the influence of Admiral Perry’s “Black Ships.” Both nations lacked access to developing markets and natural resources, principally oil. So once war started, Japan drove right for the oil and rubber fields of Indonesia and Malaysia and Germany for North African (and later Romanian) oil.

Now fast-forward to the present. No one threatens war over oil because it’s a globally-traded commodity. Whoever can pay the going price can get it.

That rule seems fair to everyone. More important, it’s economically efficient. The nation or firm that can use the oil more efficiently can afford to pay more for it, and (in a free market) can get it.

Anyway the most competent extractors and users of oil are no longer states. They are private companies. Free trade in free markets works because our species has organized its best productive efforts in huge private firms: oil companies and car companies. Not only are these companies multinational in scope and operations. Their ownership and staffing are multinational, too.

So in extracting and using oil and gas, we’ve now grown up as a species. Nations and nationalism no longer matter so much. What matters is competence, efficiency and technology. The only way oil now threatens war is when one country threatens to take the profits from what another country sees as its own resources, as China may be doing now with the Spratly Islands and in the South China Sea.

That’s one reason why free trade is so important. Not only is it economically efficient. Not only is it the international equivalent of free markets domestically, which virtually every nation in the world has adopted as the best economic system, except for North Korea, Venezuela and Bolivia. Even Iran has.

But because free trade is efficient and seems fair, it also avoids the kinds of disputes (“This oil field is mine!”) that often has no resolution short of war.

Tariffs are bad. The same reasoning shows why tariffs are so destructive. Not only are tariffs economically inefficient: they protect high-cost manufacturers who overuse scare resources. They also breed justifiable resentment and conflict that can lead to war.

“This market is mine!” differs little from “This oil field is mine!” But that’s what tariffs say. That kind of possessiveness can make people angry and lead to war.

Indeed, that’s precisely what colonialism was—an indirect way of saying “This (developing) market is mine!” And that’s why colonialism often led to war among major powers, quite apart from the understandable desire of colonized peoples to be free.

So free trade is good for a whole bunch of reasons, including reducing the risk of war. That means tariffs are bad, for just as many reasons. And that’s why all our international trade agreements, including the agreements organizing the World Trade Organization (WTO), outlaw tariffs.

So is selling below cost, and for similar reasons. But what about selling below cost. Is it like a tariff—a barrier to international trade—or is it just a legitimate part of global business?

In order to answer that question, you must first ask why anyone would sell anything at a price below the cost of producing it. Isn’t the function of business to generate a profit? And isn’t profit the prime mover of free markets and free trade and the motivator of economic efficiency? So if you sell each item at a loss, aren’t you not only losing money, but throwing sand in the global economy’s engine?

The answer is that no one sells below cost expecting to do so indefinitely. The purpose of selling below cost is to drive competitors out of the market and—once they’ve left—to raise prices and make a profit again.

So selling below cost is just a more subtle and riskier way of saying “This market is mine!” It requires some patience and perhaps the deep pockets of a wealthy angel. But it amounts to the same thing.

If a subsidy drives the selling price of anything below cost, it’s much the same as a tariff. Eventually, someone has to pay for the accumulated losses through the subsidy, just as domestic purchasers of goods protected by a tariff have to pay for the tariff, usually in increased prices for the imported goods. That “someone” may be taxpayers of the subsidizer, or later purchasers of the same products, who must endure higher prices after the subsidizer has killed honest competition.

For these reasons, we Yanks outlawed below-cost selling in our own country over a century ago. We outlawed it with our antitrust laws.

Back then, we used different terminology because the tactics were slightly different. Long before the Internet and cheap national transportation, product markets were geographically fragmented. A single firm might have a monopoly in one market (say, in the South) yet meet strong competition in another geographic market (say, in the West). So that firm might raise its prices in its monopoly markets to subsidize below-cost sales in contested markets.

We called this practice “geographic price discrimination,” and we outlawed it. We did so first with the Sherman Act—the main source of out antitrust law—in 1890. When that law didn’t effectively eliminate the practice, we enacted a supplementary law in 1936.

Called the Robinson-Patman Amendments, the supplementary law explicitly prohibits price discrimination of all kinds. It outlaws geographic price discrimination, i.e., selling the same product at a high price in a dominated market to subsidize below-cost sales in a competitive market. But it also outlaws mere price discrimination: selling one product at a high price in a dominated market to subsidize below-cost sales of another product in a competitive market.

So the notion that selling below cost is unfair and economically harmful is nothing new. We’ve outlawed the practice in our own country for over a century, with specific prohibitions for 76 years.

What’s new is the context of international trade. In the bad old days, subsidies for below-cost sales came from big private firms that enjoyed local monopolies and wanted to expand them. Nowadays, subsidies for losses from below-cost selling come primarily from governments, not private firms operating in different geographic regions or selling different products.

The new international context raises all the old specters of imperialism, nationalism and even racism. But the economic questions are precisely the same. Why would anyone sell below cost? The most obvious reason is to drive out competition in order to dominate a market (which now may be global) and later to raise prices and profit.

Another reason—new in the international context—might be to dominate a market in order to gain a strategic advantage. This second reason is often why governments subsidize below-cost sales. It’s just another face of modern mercantilism.

Claims before the WTO have accused European governments of subsidizing Airbus, and China of subsidizing windmills, for precisely these reasons. Civilian aircraft comprise a strategic industry, with innumerable suppliers who create jobs and obvious spillovers into military aviation. And windmills promise to be a large part of our species’ clean-energy future. So, the claim goes, Europe and China, respectively, are subsidizing Airbus planes and Chinese windmills to get a leg up in these strategic industries.

What’s wrong with subsidies for selling below cost? Three things. First, they’re unfair: they tilt the playing field. And because they’re unfair, they raise all those old ghosts of nationalism, racism and war.

Second, selling below cost is inefficient. With non-market subsidies (typically from government) an inefficient firm can win. When an inefficient firm wins, the result is higher prices for everyone—higher than they would be from efficient firms, without the interference of subsidies.

Subsidized below-cost sales also create other inefficiencies, even in the short term. They make inefficient use of resources. The subsidized firm doesn’t have to conserve scarce inputs (such as oil or copper) or cut costs because it knows it can rely on government subsidies to take up the slack.

Below-cost sales also cause buyers to overuse the cheap product, which would cost more if not subsidized. In so doing, buyers overuse all the commodities and specialized labor used to make the subsidized product. Thus subsidized below-cost sales ripple through the entire economy, causing distortions and waste in the markets for all relevant materials, labor and even land.

Finally, selling below cost is just another way to avoid real competition, which is the driving force of free markets. Subsidizing below-cost sales says, in effect, “This market is mine! Don’t enter no matter how good you are, no matter how efficient your operations or how attractive your products. We will lower our prices by hook or by crook, and you can’t win.” That, of course, is not free-market economics.

Below-cost selling is hard to detect and identify. The economic theory under which we outlaw selling below cost is sound. So are the laws long on our books that outlaw the practice. So are the rules of the WTO. But identifying selling below cost is not easy.

Below-cost selling is not like a tariff. Tariffs are open charges applied to foreign goods but not to the same goods of domestic manufacture. Where they exist, governments advertise them, in part to discourage foreign competition.

But governments try to hide below-cost selling by their own firms and the subsidies that make it possible. They hide their subsidies in such things as tax relief, land concessions, or labor laws, i.e., concessions to workers.

Governments can can hide a subsidy in virtually anything that businesses rely on, from the price of electricity to insurance against fire and casualty. In socialist or formerly socialist systems like China, where state enterprises sell inputs like electric power, it’s easy to hide subsidies in non-market or special prices for such inputs. The state subsidizes below-cost production by charging below-cost rates for inputs used in production.

So it’s much harder to detect and identify selling below cost than to spot tariffs. Maybe that’s why the practice has been resurging lately. And that’s definitely why disputes about below-cost sales are often drawn-out affairs requiring lots of lawyering.

Two types of legal proceedings address below-cost selling. First, a private firm here at home can bring a case before the US International Trade Commission (USITC), claiming injury from that practice. In order to prevail, it must prove that some importer is selling goods in this country below cost. It must also prove that those sales are injuring a domestic industry in which it competes. Then the President, who governs foreign policy, must agree.

Only after all these hurdles are passed can the USITC impose so-called “countervailing duties” on the imported products. These duties neutralize the illegal subsidies and drive the products’ final prices above the cost of producing them.

If successful, these USITC proceedings produce something that may look like a tariff. The countervailing duties increase the domestic prices of the imported items above their unfair imported prices.

But although countervailing duties act like tariffs, they are not tariffs. Their sole purpose is to counteract selling below cost. They seek not to protect inefficient domestic firms from global competition, but to protect efficient domestic firms from being driven out of business by unfair foreign subsidies.

Nevertheless, because countervailing duties resemble tariffs, they are legitimate causes for trading partners’ concern. If trading partners think countervailing duties themselves are improper or unfair, they can complain to a dispute-resolution panel in the World Trade Organization.

There the complaining party is an aggrieved state, not a private business. There the state can claim that the countervailing duty is in error and is really an illegal tariff in disguise. If it wins its case, the complaining state can gain the legal right to impose countervailing tariffs or other import restrictions of its own, in retaliation for the improper countervailing duties.

States aggrieved by unfair subsidies can also take action before the WTO, claiming the right to impose import barriers to domestic sales below cost. Those barriers can take the form of countervailing duties, quotas, or even exclusion of unfairly subsidized imports. In other words, a state (such as our own US) can seek the legal right, in proceedings before the WTO, to impose countervailing duties or other import barriers against below-cost sales, despite the WTO rules that outlaw tariffs generally.

The modern WTO is hardly an ancient body. Its existence dates to 1996, only sixteen years ago. Yet its laws and procedures, recognized in international treaties, reflect the current global consensus on free trade.

Free trade is good, the WTO Agreements say. Anything that undermines free trade is bad. And states that are victims of bad practices have the right—in special exceptions to the general rule of free trade—to retaliate with their own trade sanctions.

So below-cost selling is not only illegal in the United States, where it has been so for over a century. It is also illegal worldwide. A private firm can use USITC proceedings to make a case in the United States, using the leverage of our huge market to get foreign firms’ and foreign states’ attention. A foreign firm can contest the claim of below-cost selling before the USITC or, through its state as claimant, before the WTO. In both tribunals, cases turn on a basic factual question: were the sales of imports really below cost?

These are not easy cases for either party. They are especially hard when they involve sales emanating from states like Russia or China, which only recently adopted free-market economics. The claimant has to show that selling prices are below the seller’s costs, and the seller can show real (unsubsidized) costs that the claimant missed.

The claimant’s task is usually harder because the seller usually has all the information. As a result, the court or tribunal sometimes relies on “constructed” costs, or costs inferred from general market prices for materials, labor, etc. But however hard applying it may be, the prohibition against selling below cost remains vital for free markets in international trade.

Conclusion. Outlawing below-cost selling is not protectionism. If we can prove below-cost selling, the WTO Agreements, which 155 nations have signed, allow us to impose so-called countervailing duties on imported products in order to neutralize the effect of the unfair and economically inefficient subsidies.

Those duties may resemble tariffs in effect. But they are not tariffs in substance. They do not say, “Don’t bring your products in because we will tax them until they are uncompetitive.” Instead, they say, “Don’t bring in artificially cheap products, expecting to kill free-market competition here, because we’ll tax them just enough to neutralize the unfair price advantage of your subsidy.” The sole (and legitimate) purpose of these countervailing duties is to prevent unfair subsidies from distorting free markets at home and abroad.

In this country, that’s the same goal that antitrust law has had for more than a century. We Yanks believe the rule prohibiting selling below cost to be economically sound, and we obey it ourselves. So in applying that rule to products from China (or anywhere else), we are doing nothing more than following the Golden Rule, treating others as we treat ourselves.


Mohamed Mursi, Elected President of Egypt

Egypt’s election commission announced the results of its presidential election today. Mohamed Mursi, the Muslim Brotherhood’s candidate, won by 51.7 percent to 48.3 percent.

As far as anyone can tell from abroad, the election was free and fair. It certainly wasn’t manipulated by the Army, which put up its own token candidate after dissolving the Islamist-dominated Parliament, who lost.

So Mr. Mursi has the distinction of being the first truly democratic elected leader of one of the world’s oldest nations. In five millennia, he’s unique. That simple accomplishment ought to make everyone inside and outside of Egypt take a deep breath and cut him some slack.

There is no reason to suspect that the Army falsified the results. If it had, it would have cut down Mursi’s margin of victory. So Mursi self-evidently commanded the allegiance of a majority of Egyptian voters. How he uses their mandate only time will tell.

The future of Egypt’s new and fragile democracy is unclear. But one thing is certain. The word “Muslim” in the name of Mursi’s political party will produce an epidemic of Islamophobia among ignorant people in the US and EU.

Western powers cannot afford to indulge or even tolerate that outpouring of mindless fear and hate. If France, a Catholic nation, were emerging peacefully from decades or centuries of tyranny, should we quake to find its leading political party with the word “Christian” in its name? Should we fear Germany’s Christian Democratic Union, its leading center-right party?

Of course not. Just so, we should wait and see what the Muslim Brotherhood does with its long-awaited and legitimate electoral mandate. In particular, we should wait and see whether religion or much-needed economic progress becomes its chief practical goal. In the meantime, there are three very practical reasons to hope for and expect the best.

First, the secular and still powerful Egyptian Army stands ready to do everything and anything necessary to suppress extremism in domestic or foreign policy. The main risk now is not that it will do too little but that it may interfere too much. (The army may already have done too much, too soon, in dissolving the Egyptian parliament and commandeering constitutional reform.)

The precedent of Turkey is clear and compelling. A strong, secular and self-restrained army can moderate extremism. It can eventually allow Islam to take its appropriate place in a majority Islamic society while preserving democracy and minority rights.

The balance between military and civilian authority will be delicate and at times precarious, as it has been in Turkey since the death of its great leader Kemal Atatürk in 1938. But Turkey today works and works well. There is no reason that Egypt—the world’s most populous Arab nation—cannot work every bit as well. The world and Egypt’s people must provide the time, space and support that Egypt’s first-ever real democracy deserves.

The second reason why the world (and especially the US) should be supportive of the new regime is the Muslim Brotherhood’s history. That movement has indeed produced extremists, including Al Qaeda Central’s Ayman al-Zawahiri, the only surviving member of the late bin Laden’s original crew. These men made a career and political platform of blowing innocent people up.

But people who see the entire Brotherhood as a group of unredeemed terrorists are missing some important points of fact. Under the draconian Mubarak tyranny, all the bad terrorists long ago fled Egypt to carry their quixotic and doomed “armed struggle” against the West abroad. The few who remained were jailed or executed. The rest of the Brotherhood inside Egypt went underground to form a political party and work quietly for peaceful change.

When the Arab Spring came to Egypt, it took the Brotherhood by surprise. At first the Brotherhood was reluctant to accept it or participate in it, fearing a trap or a false dawn.

But the Brotherhood was the only thing in Egypt remotely resembling a political party. And so it eventually joined the Tahrir Square Revolution, as it had to do.

Once it joined, the Brotherhood’s initial success was foreordained. It had worked quietly to organize Egypt’s people against tyranny for decades, with its leaders constantly under threat of jail, torture and execution. So naturally it had a leg up in organization, leadership and popular support. But the Mubarak regime’s repression undoubtedly taught it caution and moderation.

How much of those lessons remain will be a key factor in the Brotherhood’s success in real politics. The party’s leaders, who are not stupid, must know that.

The third and final reason to respect Egyptians’ choice and work and hope for the best is Mursi himself. As usual, Western media seem to know little about him. They should learn fast. But they all describe him as a US-trained engineer.

That fact alone is important, maybe vital. Mursi is not an imam or religious leader. He’s an engineer, trained in our own country. By training and inclination he’s a builder and a practical man. Engineering didn’t choose him; he chose it. He won the election in part just by being the non-army candidate. But he also won in part by reaching out to the center, as any leader of a diverse society undergoing rapid change must do.

Mursi has a hard road ahead of him. He has to work with the army and convince it—and Egypt’s dissenting voters—that he’s not a fanatic. He has to push for new parliamentary elections and prepare his party for them while at the same time tolerating and even nurturing legitimate opposition parties and non-army candidates (unlike his octogenarian rival for the presidency, Shafik). He has to show the generals and skeptical secular Egyptians that he and his party are ready to govern all of Egypt for the benefit of all. And he has to do all this without alienating or disappointing his party’s members, who have waited decades for freedom and are now impatient. Most of all, he has to show all of Egypt’s people that the Revolution is real and can make their lives better.

None of this will be easy. But who can do it better than Mursi? Who is leader of the only organization resembling a genuine political party in Egypt’s long and tortured history? Who managed to prevail in a free and fair election in the aftermath of a popular revolution that was utterly disorganized and chaotic, but peaceful? Who is trained as a builder and maker, not an ivory-tower religious thinker?

No one can predict the future. But my money is on the engineer to succeed.

And succeed he must. Just think of F. W. de Klerk and Nelson Mandela in South Africa. Like apartheid South Africa, Egypt cannot afford to let Mursi fail. Nor can the world. For there is no guarantee nor any present prospect of a second chance.

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20 June 2012

“Old Europe”


Over the last decade or so, we Yanks have said some pretty stupid things. Dubya’s “Mission Accomplished” banner, unfurled in May 2003, preceded nearly a decade more war in Iraq, including a minor civil war. That war is still ongoing today, just not with our own combat troops.

For sheer arrogant stupidity, it’s hard to top that one. But That Idiot Rumsfeld came close, with his frat-boy taunt of “Old Europe.”

To see just how dumb Rumsfeld’s jibe was, let’s take a clear-eyed look at recent history.

Let’s take science first. Over the last two decades, we Yanks have virtually abandoned basic science outside of medicine. The trend began with our killing the Superconducting Super Collider in 1993. Now its counterpart, the Large Hadron Collider, sits in Geneva. So our scientists must go to “Old Europe” to explore the mysteries of the subatomic universe. Ernest O. Lawrence, who designed the world’s first cyclotron at Berkeley over ninety years ago, is probably rolling over in his grave.

Next let’s take law—international law. We were only one of the victors in World War II. But were were the only one whose territory and civilian population were intact. We could have stomped our enemies with heavy boots, as victors had done to vanquished since time immemorial. Instead, we followed Jesus’ advice and loved our erstwhile enemies [search for “Marshall Plan”]. We built up their economies with the Marshall Plan, creating the world’s first, third and forth most prosperous nations today (including our own).

That history is well known. What’s less well known now is how we changed international law with the Nuremberg Trials [search for “Old Europe”]. For the first time in human history, we imposed individual responsibility for aggression and atrocities on an errant society’s leaders, not collective responsibility on its hapless population. We did the same thing in Japan.

As I have noted elsewhere, that small step was a giant leap for mankind. If continued and strengthened, it has the potential to halt the endless parade of clever demagogues causing self-destructive tremors in the landscape of human history. There is nothing like putting tyrants and butchers on public trial to show that power entails responsibility, not just to one people or ethnic group, but to our entire species.

So far, so good. But where is that tradition continuing now? Not here. In “Old Europe.”

Europe has the International Criminal Court, which we Yanks have refused to join. In the past decade it or specialized offshoot tribunals have prosecuted such evil men as Slobodan Milošević, the Butcher of Kosovo, Ratko Mladic, the Butcher of Srebrenica, and Charles Taylor, now sentenced to 50 years imprisonment for, among other things, “terrorism, rape and murder of civilians, . . . [and] recruiting child soldiers and child sex slaves.” Omar al-Bashir, the Butcher of South Sudan and Darfur, is under indictment, and Bashar al-Assad, Syria’s Butcher, may be next.

Where is the US in all this highly public legal action against butchers and tyrants? Nowhere. The operational planner of the biggest butchery of innocent civilians in our own history—Khalid Sheikh Mohammed—still sits in a military prison awaiting trial before a military tribunal, part or all of which may be closed.

So who carries the ball of public and well-publicized trials of the worst criminals our species has produced? Who keeps the path-breaking precedent of Nuremberg alive? “Old Europe,” that’s who.

In finance the story is much the same. Our Yankee bankers created the biggest financial catastrophe after the Great Depression. Yet not one of this economic atrocity’s architects has yet come to justice. Most have not only escaped accountability; they have waxed ever richer.

Yet in “Old Europe,” the process of accounting already has begun. Under the leadership of Germany’s Chancellor Merkel, private holders of Greek bonds have been forced to take a 50% “haircut.” If Greece defaults, they may take more.

That’s called “capitalism.” It’s also called “free markets.” You want to bet on the sovereign bonds of a weak state? Fine. But if you lose, you pay. If you are a corporation, your shareholders pay, not innocent taxpayers. That’s personal responsibility—something today’s right wing talks about endlessly but somehow always manages to evade.

The game is not over yet. The bankers have tried to protect themselves with a huge store of derivatives, now reaching the astronomical height of $700 trillion globally. (No, that’s not a typo.) Their endless quest to keep gambling but never lose may yet cause another Great Depression, this time completely a completely global one.

But at least “Old Europe” has made a start at restraining financial villains with the same sort of personal responsibility that the Nuremberg trials imposed on Nazi war criminals. We have not. Europe also has has begun to adopt serious, stringent regulation, and its leaders have proposed a tiny tax on financial transactions to fund the next big bailout. Here, too, “Old Europe” leads.

Then there’s the question of bailouts versus “austerity.” It should be obvious by now that we have both, in a global vicious cycle that is busy repeating itself in time and space.

Politicians in the world’s democracies promise their people things too good to be true. To get re-elected, they make them happen by borrowing money. Bankers lend the money readily but unwisely, often charging too little interest. They then pass the risk off to other bankers by buying credit-default swaps and other derivatives from the likes of Goldman Sachs. When the whole financial house of cards inevitably crashes, the pols and bankers conspire to force ordinary people, collectively, to pay up.

That’s called “austerity.” The name makes it sound like a good old Calvinist virtue. But it’s not. It should be called “we play, you pay.”

The individual architects of this vast Ponzi scheme bear no individual responsibility. Pols get re-elected, their parties continue, or they retire into comfortable and well-deserved obscurity. Bankers collect on their derivatives, take their bonuses, and prepare to do the same again.

No voters besides those of France and Greece seem to have noticed two glaringly obvious points. First, this state of affairs is utterly unsustainable. As in any Ponzi scheme, something eventually must break. The trick now is to make sure that “something” is not the global economy. Second, unless there is a solution soon, the people—ordinary taxpayers and workers—will be the ones left holding the bag of debt and financial destruction.

Merkel’s haircut of Greek bond holders has the potential to break this vicious cycle, but its near-term consequences are unpredictable. Just think of all those $700 trillion worth of derivatives as a delicately balanced house of cards about to fall.

The solution is now obvious, at least in rough outline. We need some variant of Keynesian economics, which brought us out of the last depression. We must borrow money one last time, but not to bail private bankers out yet again. We must borrow money to prime the pump of the global economy and make the debt seem smaller. Then we must raise taxes to pay it off quicker. Finally, we must clamp down hard on miscreant bankers, unwind the Everest of derivatives, and make sovereigns tighten their belts and bankers take real, personal risk again. In other words, we have get back to real capitalism and stringent regulation, keeping bankers and pols on a short leash.

This is not easy stuff. It’s easy to say, but not to do. We not only have to walk and chew gum at the same time. We have to do three things simultaneously and effectively: (1) stimulate the flagging global economy (the real one, not finance), (2) cut government debt (and constrain ebullient pols) by raising taxes, and (3) tighten regulation drastically to get the mess the bankers have made of global finance back under control and under some semblance of the personal responsibility that used to be capitalism.

We Yanks are doing none of these things—not one. Our system is structurally incapable of acting, and our population is confused by demagogues. In contrast, “Old Europe” has already taken the first steps toward doing (2) and (3).

Recent elections in France and Greece suggest it is also considering step (1)—exchanging mindless “austerity” for some stimulus to the real economy. The French socialists won a complete majority to push for less austerity and more growth. The Greeks stepped back from the brink and probably won’t repudiate the Merkel-bargained bailout that already made private bankers bear 50% of the loss. But, as any observer of Greece knows, the Greeks are not sanguine about mindless austerity.

Since the Crash of 2008, global leaders have done little to address its underlying causes. They staved off immediate catastrophe at astronomical expense. Then they kicked the can down the road. We Yanks are stuck in political paralysis. Only “Old Europe” offers a ray of hope.

As I wrote before, personal responsibility is the salvation of our species. We Yanks imposed it after World War II and then dropped the ball. “Old Europe” has picked that ball up, with prosecutions for tyrants, mass rapists and butchers, retirement for clueless politicians, and “haircuts” for improvident bankers.

So as you think of “Old Europe” and its present struggles, remember that it’s the historical source of all our good Enlightenment values, including racial equality. (The British abolished slavery long before we did and fought to contain it in Africa.) And understand that Europe has wisdom, born of two millennia of struggle, suffering and trying to perfect those values.

Anyway, it now should be clear even the to dumbest investor that we are all in this together. Europe sneezes and we shiver. We are our brothers’ keepers, worldwide. If others suffer, so do we, and vice versa. The Crash of 2008 proved the latter proposition.

“Old Europe’s” people and leaders seem to be catching on to these essential truths quicker than we Yanks. So don’t count “Old Europe” out.

We don’t need endless bailouts of private investors followed by “austerity” for the masses. We need a way to break the vicious cycle and return to rational, stable, dull finance. Europe is groping for a practical way to do that. We stand transfixed by ideology like a deer caught in the headlights, unable to move. We could do far worse than follow “Old Europe’s” lead.

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16 June 2012

Four Ayatollahs and a Decider


As we await with trepidation the Supreme Court’s decision on so-called “Obamacare,” it’s a good time to think about how our system really works. Who makes the ultimate decisions that shape our society? Are we really a “democracy” as we claim? Are the deciders rational?

Some day soon—perhaps Monday—the Court will announce whether 30 million people who don’t now have health insurance will get it, or whether they will be thrown back into health-care limbo. For those 30 million people, mostly poor and unemployed, few decisions could be more consequential.

Our nation has the most advanced medical technology in human history. The Court will decide, in effect, whether the 30 million will have to join a real insurance pool so that they can enjoy that technology, or whether they will suffer and die if they get sick or injured because they can’t afford the private admission fee.

This decision is a matter of life and death for millions. The President and Congress did the best they could to solve a long-festering problem of access to health care. No one thinks their solution is perfect. But it was and is the best our elected representatives could come up with—not just in the Obama Administration, but for the last century. The issue goes back precisely 100 years, to Teddy Roosevelt, not Franklin.

Unfortunately, our Court will not decide based on consequences. It will not decide based on empathy for the 30 million. The four ideological so-called “conservatives” and the decider [subscription required]—Justice Kennedy—will rule based on legal abstractions and abstract ideology.

Faced with a valid act of Congress, signed by the President, the Court can only reject the law for failing to comply with our Constitution. According to the Court’s so-called “conservative” majority, it will have to ask itself what our Founders, who wrote and ratified our Constitution, would have thought if they were alive today, but without any knowledge of modern times or intervening history.

That’s their criterion: so-called “original intent.” They care not what the Constitution means today, but what it meant in 1791, the year it was ratified. They seek a time warp in which the intervening two centuries never happened.

There were no CAT scans or MRIs in 1791. No one knew what DNA is. The acronym didn’t exist. There were probably only a handful of people on our whole continent who would even have understood that “deoxyribonucleic acid” is the name of an organic chemical.

A heart transplant is routine today. Then it would have been considered witchcraft. Anyone attempting one would probably have been burned at the stake, like the “witches” in the Salem witch trials.

But the good “conservative” justices want to transplant themselves back to that era to decide what we should do today. They want the dead hand of history to rule us now.

How, pray tell, does their rule differ from that of Iran’s Ayatollah Ali Khamenei, its Supreme Leader, who rules absolutely based on the language of the Qur’an, written over thirteen centuries ago?

The Qur’an is older than our Constitution, much older. But isn’t the principle the same? What abstract thinkers think their revered ancestors thought rules the present day. There’s not much attention paid to present circumstances or consequences. We look backward, though a glass darkly, to see “solutions” to our most dire current troubles.

The “wisdom” of the past beckons. But it lacks one essential thing: empathy for real people who may suffer and die in the present tense.

The good Ayatollah at least has the moral sense to recognize that the lust for nuclear weapons is “evil.” Can our four Supreme Court ideologues recognize the same about letting poor people suffer and die in a society that could easily save them?

Mohammed had no nuclear weapons. Even as a prophet, he probably could not have grasped their diabolical destructive power. Likely he would have instinctively agreed with the Ayatollah that their use would be the ultimate evil.

But who really knows? In each case, all we have are a dry legacy of words on paper, centuries old.

We ought to draw from those words basic moral lessons and reason from there. But the so-called “conservative” majority on our Court won’t go back to the underlying morals—the ethos of a new society settling in a wilderness and trying to take the old world’s best and leave the worst behind. Instead, they just want to trust just the old words, the bare abstractions. In so doing, they basically arrogate to themselves the power to make it all up.

History repeats itself. The same thing happened nearly a century ago, eighty-three years ago, to be precise.

Then, there was another financial catastrophe. Then, the finance sector caused that one, too. The mechanism was much simpler than today’s derivatives, but its impetus was much the same. Buying securities on margin was supposed to add more joy to a party that would never end. But the party did end, with suddenly bankrupt people jumping out of Manhattan skyscrapers to their deaths. The Crash of 1929 began the greatest financial catastrophe, so far, in human history.

When FDR tried to play the practical politician and make things better, who held him back? The Supreme Court, of course. The same sort of so-called “conservatives” existed then. Roosevelt called them the “nine old men.” (There were no women on the Court in those days.) For several years, they found all sorts of abstract reasons to strike down the laws that he proposed and that a worried Congress duly enacted.

Roosevelt resolved to “pack” the Court—increase its membership with new appointees and change its direction. Congress had, and still has, the power to do that.

But Congress balked. No one wanted to disturb the mystery of history, or to take responsibility for deciding what the Founders would think if they had grown up and had been educated then, rather than in the eighteenth century. So FDR backed down, and his program of national renewal had to wait several years to begin. Law schools now teach those old cases as bad law, examples of what happens when so-called “jurists” become political.

Will it be just so with President Obama? As we await the Court’s current big decision with fear and trembling, we have two awful precedents to digest. Both are, of course, rulings by the Court’s so-called “conservative” majority.

One held that cities and states cannot legally control deadly small arms within their borders. Ultimately they must ask the Court to shape the limits of their power to control armed violence. And while they wait years for a decision, real people—including a congresswoman—suffer or die from needless gun violence, at the hands of deranged or criminal gunmen. (Why are the perpetrators always men?)

The second decision—Citizens United—held that corporations are “persons,” and that money is speech. So corporate managers and rich people can use their wealth to propagandize the American people to do their bidding. Goebbels waxes green with envy, rather than mold, in his grave.

To say that these decisions undermined American democracy would be an understatement of Obamanian proportions. But the so-called “conservative” members of the Court profess to uphold sacred historic values, known only to themselves.

Like the good Ayatollah, they live in their heads, not on the ground. Live people and their current cares mean nothing compared to their divine abstractions. Facts themselves don’t matter unless they fit the theory.

Scientists would flinch. But that’s the way things are.

So Justice Kennedy must wrestle with his abstract ghosts. “Liberty,” the news says [subscription required], is his obsession. But is it the “liberty” of free riders to shun insurance to save a few bucks and later burden taxpayers with their care if they get sick or injured? Or is it the “liberty” of 30 million ordinary people to participate in the medical-technological revolution that our society has wrought at great expense, and therefore to be free from fear?

Only Justice Kennedy knows. Because the Court is otherwise deeply divided by abstract ideology, he alone will decide. He alone may have the strength to consider real people and real consequences.

Is that democracy? A single man—appointed, not elected—deciding matters of life and death for 30 million people, based on his personal notions of “liberty”? And we belittle the Ayatollah!

If the concept of “judicial restraint” means anything to Justice Kennedy, he should let this one go by. To set his own idea of “liberty” above the admittedly imperfect result of a century of political striving would be the height of hubris. We will soon see whether this man has a trace of the humility that marks great jurists.

As for contempt for the poor and underserved, we’ve seen it all before. Their “betters” condemned the street beggars in Dickensian England for laziness, lack of education, bad manners, and unfortunate birth. So today the so-called “conservatives” condemn the poor, unemployed, and recently fired as responsible for their own suffering. The more things change, the more they stay the same.

But our species’ dirty little secret is to the contrary: cooperation and social cohesion. We can’t accomplish much on our own, as individuals. Together, we can fly the globe, reach the Moon, build nuclear and renewable power stations, and make nuclear weapons to destroy each other and our planet.

Without each other—without cooperation and cohesion—we are nothing. But there can be no effective cooperation without empathy. Hitler and Stalin tried to force cooperation. They seem to have failed.

So as we look to the future, we should look to leaders who have empathy. Who has more, the President or the Supreme Court’s so-called “conservative” majority? the President or Mitt Romney? The Ayathollah or the street demonstrators in the Arab Spring? Upon the answers to these questions, the future of our nation and perhaps our species will depend.

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09 June 2012

The Future of Nuclear Power


Introduction
1. The economic dilemma: cheap power from obsolescent plants versus safer but more expensive power
2. Why we still use obsolete designs
3. Designing for safety
Conclusion

[For a description of a possible meltdown-proof design, click here.]

Introduction. Over a year ago, I promised an essay about the future of nuclear power after Fukushima. It’s been a long time coming, but this is it.

The reason for delay is that nuclear power is an exceedingly complex subject. In academic terms, it’s quintessentially “interdisciplinary.” It involves science, technology, engineering, economics, politics, psychology (including industrial psychology), labor relations, community planning, ethics and morality. Next to space travel, nuclear power is probably the most complex thing our species has yet attempted.

Nuclear weapons are much simpler. To meet their design goal, which is primarily deterrence, they just have to work once. Or they have to give the appearance of working as designed. They don’t have to work continuously and reliably, for decades, putting their components and structure under the intense stress of high temperatures, enormous pressures, corrosive chemicals and damaging radiation. And they don’t have to work through natural disasters like the earthquake and tsunami that destroyed the Fukushima plant.

There is also another reason I waited. I wanted to let the political fallout from Fukushima settle. Now that it appears to have done so, two things are clear. First, two of the greatest national engineering paragons—Germany and Japan—are on the verge of abandoning nuclear power once and for all.

That’s not all bad. Nuclear power involves radioactivity, and radioactivity has risks. If Germany and Japan switch to truly renewable power, they might help retard global warming and encourage a global transition to a sustainable civilization.

But to the extent they switch back to fossil fuels, especially coal, Germany and Japan will accelerate global warming and, by example, encourage a global energy suicide rush. If engineering powerhouses like Germany and Japan go back to coal, you can bet that India, Pakistan, most of Africa and Latin America, and large parts of China will, too. Then the ice caps might melt and give us runaway climate change.

The second self-evident aspect of Fukushima’s political fallout is the realization that people and policy makers worldwide know little or nothing about nuclear power. They are just scared.

The conclusion I draw from these facts is that nuclear power requires a thorough, expert, interdisciplinary analysis at the highest level. Ideally, the final report should be global, and preparing it should take at least five years. It should have political input and address some mixed technological-economic-political questions. But its authors should be established and peer-recognized experts.

This plenary analysis should put the tradeoffs—all tradeoffs—before policy makers and the public for open discussion. It should consider at least four alternatives: (1) continuing to exploit our fully depreciated and outdated nuclear power plants; (2) building new plants on the most modern existing designs; (3) developing and testing new designs for the specific purpose of meltdown proofing and avoiding the need for continuously cooling spent fuel; and (4) switching to more advanced nuclear technologies, like liquid fluoride thorium reactors, that promise vastly reduced risk and millennium-scale fuel availability.

Here are the reasons for this proposal.

1. The economic dilemma: cheap power from obsolescent plants versus safer but more expensive power. Nuclear electricity is cheap today. On my table costing various sources of energy for moving cars, it comes in first, i.e., with lowest cost (although the differences with industrial natural gas and solar photovoltaic electricity are not significant).

Why is that so? Is it something intrinsic about nuclear power? Or is it something about the way we’ve used it so far?

Simple accounting suggests the latter answer. The vast majority of nuclear plants in operation today, including the ones now halted in Japan, are based on 1960s designs. Their original designers never expected them to last this long—for half a century.

Although some parts of these plants have been replaced over the years, their most critical (and most expensive) parts are fully depreciated. Their construction bonds are all paid off. The expense of construction has been recovered. The only current costs are for fuel, maintenance, waste disposal and occasional electronic upgrades, and waste disposal is halted, at least in the US. That’s why nuclear power is the cheapest form of energy in use today.

The problem is that, after fifty years or so, these fully depreciated power plants are obsolete. Not only do they have things that even their routine engineering staff would like to repair, replace or redesign if they could find the money. These plants’ basic design concepts are obsolete. Even the goals of their design are.

Imagine yourself driving a car or working on a computer designed in the 1960s. Your car wouldn’t have seat belts, collision bags, fuel injection, automatic braking systems, or skid control, let alone GPS. If American, it would deliver between 11 and 20 miles per gallon. Your desktop and laptop computers, let alone your mobile devices, wouldn’t even exist. With something as complex and potentially as dangerous as a nuclear power plant, the risks posed by obsolete designs are much, much greater than anything posed by an obsolete car or computer.

So the basic economic dilemma is clear. We can continue to have cheap electric power coming from fully depreciated plants of obsolete design. But we can do so only if we’re willing to accept the risks of another Chernobyl or Fukushima. That the people of Germany and Japan have signaled they are unwilling to do.

There are alternatives, including the four more modern approaches listed in the introduction to this post. All have two common features: (1) they reduce the risk of disasters substantially, some to the vanishing point, but (2) they are going to cost a lot. All also offer the same general advantage of nuclear power as today’s mostly obsolete plants: they are carbon neutral and won’t accelerate global warming.

So here we have the dilemma. We can continue to rely on nuclear power and even expand it. In doing so, we can solve our energy “crisis” and (with electric cars and trains) makes ourselves fully energy independent. But if we want to do so safely, we are going to have to spend some money, probably a lot of money.

From a short-term economic perspective, all we’ll really get for that money is safety. So the spending is a hard, hard sell. If we continue on our present course, we can continue to enjoy cheap nuclear power at some risk. But after the next Fukushima, the public may reject nuclear power globally, as Germany and Japan appear to be doing. Then the world may return to fossil fuels and accelerate global warming.

2. Why we still use obsolete designs. Why is our species running hundreds of nuclear power plants based on now-obsolete design concepts? The answer is mostly history, plus a bit of inertia.

Nuclear power grew out of the search for nuclear weapons, not vice versa. After World War II had started in Europe, but before the US became involved, Albert Einstein wrote his famous letter to President Roosevelt. In it, he suggested that an atomic bomb might work, that the Nazis were working on it, and that we ought to try to develop one first.

That was 1939. The first “atomic pile”—an experimental nuclear heat- and radiation- generating device—demonstrated the principles of nuclear power in 1942. But it was just a stepping stone in what eventually become the Manhattan Project, whose explicit goal was developing nuclear weapons. So the first use of the theories of physics that underlie both nuclear weapons and nuclear power was military.

Later, as engineers and physicists began working on power generation, their primary goals were also military. They wanted power plants for submarines that didn’t need frequent refueling and that didn’t produce any gaseous exhaust to asphyxiate the crew or give away the sub’s location. Nuclear power fit the bill precisely, enabling relatively safe, silent, hard-to-detect subs that could stay under water as long as their crews could stand to be confined.

Admiral Hyman Rickover is famous for his comments on the difficulty of nuclear-power engineering. But to understand his remarks, you have to understand his principal concern. His goal was nuclear-powered submarines carrying nuclear weapons, not a civilian power program. He wanted power plants small enough to fit on subs, and he wanted them now, in the context of the Cold War.

So Rickover, like everyone else in the budding nuclear power industry, took all his clues from the military. The industry used the few published papers and as many results of secret military research as they could discover. They adapted the concepts learned in developing nuclear weapons and submarine power plants to civilian, terrestrial use.

Wars colored everyone’s view in those days. We had just ended history’s most destructive war (in the Pacific) with the first use of nuclear weapons. We were in a nuclear arms race with the Soviet Union and, to a lesser extent, with “Red” China. We weren’t worried about proliferating nuclear weapons because our two most dangerous adversaries already had them. We were worried only about how fast and how well we could increase and enhance our nuclear arsenal to maintain supremacy and effectively deter a first strike.

An engineer’s designs depend on the goals you give him. In those days, nonproliferation, the spread of fissionable material, and the risks of radioactivity were farthest from our minds. We didn’t care if nuclear power plants produced fissionable material suitable for weapons. In fact, we wanted such plants. For over a decade, an important goal of our nuclear reactors was to help produce fissionable material for weapons. Our first commercial nuclear power plant, at Shippingport, PA, did not open until 1957, a year after the first large-scale nuclear power plant in England. And ours was based on design concepts that Rickover had helped develop for submarines.

These historical facts explain why the vast majority of our nuclear power plants today are obsolete. Not only are their basic design concepts outmoded. The very goals that motivated the designs are, too.

Today our goals are quite different. We no longer want want nuclear power plants to use or generate fissionable materials suitable for weapons. We have so many excess weapons that we have agreed to cull them. And we fear what emerging nations and even non-state actors might do with nuclear power plants that produce fissionable material for nuclear weapons as by-products.

Today we also worry about the risks of nuclear power much more than we did then. In those days, there wasn’t much fuel, spent or otherwise, to worry about. We didn’t really understand the public-health implications of radioactivity until the fallout from nuclear-weapons testing in the atmosphere began to motivate treaties banning it. That didn’t happen until the mid-1960s. Although we understood the theory of nuclear-plant meltdown by about the same time, the first real meltdown, at Chernobyl, didn’t occur until 1986.

So the basic design concepts of nearly all our nuclear power plants in use today derive from the military goals of World War II and its aftermath, including the Cold War.

Inertia explains the rest. The period under discussion above, from 1942 to about 1965, saw the greatest investment in engineering, physics, and related technological infrastructure in our nation’s history, perhaps in our species’. The Manhattan Profect alone, for example, commandeered about 10% of our electrical power (for uranium enrichment), as well as large fractions of our advanced industrial output and the best of our tech-savvy manpower nationwide.

Of course neither we Yanks nor anyone else could sustain that sort of massive investment in a single endeavor indefinitely. So as the Cold War lapsed into stalemate and eventual resolution, there was no effort to review and revise the designs of nuclear power plants that had arisen in wartime, let alone their basic principles or goals.

As a result, America’s nuclear power industry is stuck with designs for nuclear reactors that use and/or produce uranium 235 and/or plutonium, the only two isotopes also used in nuclear weapons. Alternative designs, such as liquid fluoride thorium reactors, we abandoned because the isotopes they used and the isotopes that were byproducts of their operation were not useful in making weapons.

In the national relaxation from that intense and pressure-filled era, our nuclear-power industry just coasted. It used the designs it had because they worked and because there was a pre-existing industrial infrastructure to provide fuel for them. There were no other reasons. These designs weren’t particularly fuel efficient, and they weren’t particularly safe. But they were there.

So inertia gave us the plants we have today. And the inertia only increased once those plants were fully depreciated and their construction bonds paid off. What executive would spend huge capital resources just to get the same thing she now gets—electric power—more expensively but also more safely? So we are now getting cheap power from obsolete plants whose basic design concepts addressed wartime goals.

3. Designing for safety. In the frenzied forties, fifties and sixties, no one having much to do with nuclear weapons or power worried much about safety. We worried about whether the Nazis and later the Soviets would get better weapons first.

Knowledge of the dangers of radiation to individual survival and public health emerged only slowly. The wartime annihilation of Hiroshima and Nagasaki produced lots or horrific data, but both the US and Japan kept it secret to avoid causing public alarm. And no one suspected that reactors for civilian nuclear power held similar dangers.

The public became aware of the dangers of atmospheric dispersion of radioactive materials only in the sixties. That awareness ultimately motivated bans on atmospheric testing of nuclear weapons. The risk of meltdowns didn’t enter the public consciousness until the near-meltdown at Three Mile Island in 1979. Full awareness didn’t strike until after the Chernobyl disaster in 1986. Now Fukushima has brought awareness home for good.

So it’s not as if designing really safe nuclear power plants is impossibly hard. It may be relatively easy. We just don’t know, because we’ve never tried. We’ve only tried modifying basic designs based on obsolete concepts developed in an era when safe and widespread use of nuclear power was not even an important goal, let alone the dominant one.

We do have good reasons to believe that making nuclear power much safer is well within our capability. Theory tells us so.

I’ve explained the theory in detail elsewhere and won’t repeat the description here. But the basic principles are simple enough for anyone to understand. Nuclear reactions that produce electric power occur when separate blobs of fissionable material are brought close enough together to form a nearly critical mass. Then they spontaneously emit large volumes of neutrons and other radiation, which produce heat. Move the blobs apart, and the reaction dies down.

These basic principles suggest how to prevent meltdowns and how to make spent fuel much safer. If you let gravity move the blobs of fissionable material apart in an emergency, you don’t have to rely on complex electronic and physical precautions that require reliable external electric power to work. If gravity can move the blobs far enough apart, you don’t even have to cool them continuously. Imagination suggests a simple design that might work.

Of course the same principles apply, in theory, to spent fuel. Move the rods far enough apart, or disassemble them into even smaller blobs, and convective or conductive cooling can keep them safe, without the need for constant circulation of cooling water requiring electric power.

Implementing these precautions might require much bigger reactors and much more space for storing spent fuel than we use today. But that’s precisely the point. Designing for safety might change existing designs radically. It certainly would radically change nuclear- reactor designs for the confined spaces and limited resources of submarines.

Then there’s the concept of liquid fluoride thorium reactors. According to competent nuclear engineers, who should know, we built at least one reactor on this principle during the Cold War. It worked. The radioactivity of its fuel, operation and spent fuel was orders of magnitude smaller than that of the uranium and plutonium reactors in use today. It required far less water cooling, and in theory could be air cooled. And we have enough thorium right here in America to supply all our current power needs for a thousand years.

Implementing either of these approaches—meltdown proof designs and/or liquid fluoride thorium reactors—would require a huge effort and lots of money. We would have to do more research, more testing, and educate and nurture a whole new phalanx of nuclear engineers and physicists. (Since Three Mile Island and Chernobyl, nuclear engineering hasn’t exactly had the popularity of investment banking as a career choice. Fukushima didn’t help.)

Power executives making easy money operating fully depreciated and paid-off power plants don’t see the need for making that investment. They think we are safe enough. They think, “We’ll never be as careless as those fools at Chernobyl and Fukushima!”

Looking at dismal records of executive and commercial hubris, including those of our banking sector, the public is full of doubt. In Germany and Japan, the public wants to abandon nuclear power, with its obsolete and fully depreciated plants. But it takes that view largely because no one is offering any serious nuclear alternative. All on offer is just more of the same.

The rest of the world is caught in between. One more serious nuclear disaster, anywhere in the world, could spell the industry’s global demise, even if the disaster didn’t compare to Chernobyl or Fukushima.

Conclusion. Nuclear power is a complex business. When you consider fuel extraction, possible scarcity, military implications, the fuel cycle, and spent-fuel disposal—let alone the advanced industrial infrastructure needed to support all these things—it looks like the most complex thing our species has yet attempted, save sending men to the Moon.

No wonder the public is hesitant! It doesn’t understand any part of this complex puzzle, because no one has developed the necessary information. All the public knows is that an innocent slip—in one of two human societies best known for the quality and care of its engineering—rendered parts of Japan’s most populated region unfit for human habitation for generations, and that there are other ways of generating electric power.

The public doesn’t fully understand the three principal benefits of nuclear power. First, it offers “baseload” electricity, to fix the intermittency of free wind and sun, with a zero carbon footprint that will not accelerate global warming. Nuclear energy is the only technology that offers enough of this sort of power to serve the entire globe, regardless of geography.

Second, because nuclear power doesn’t use fossil fuels, its increased use will help avoid the continuing, intermittent economic “crises” that inevitably arise from the scarcity and increasing prices of fossil fuels. It will take some time and much more widespread use than we now make of fissionable materials before their scarcity and increasing prices will raise the price of electric power significantly.

Finally, radically new designs like liquid fluoride thorium reactors (LFTRs) promise to ameliorate or eliminate other limitations of nuclear power. They have two key advantages.

First, the spent fuel of LFTRs has a much lower level of radioactivity, with a much shorter half-life, than the spent fuel of any uranium- or plutonium-cycle plant. LFTR’s would reduce the level of spent-fuel storage danger and its persistence by several orders of magnitude.

Second, LFTRs are scalable, just like like natural-gas plants, solar plants and wind farms. They need not be as big or as grand as the huge nuclear-power plants now operating in the countryside and serving whole cities or regions. In theory, they could be small enough to power a single building or building complex, or to provide baseload backup for a small solar array or wind farm. And with a millennium of thorium here in our own country, the problem of scarcity-induced economic issues would be remote.

So there are lots of promises, but as yet no action. The power industry is content with the status quo. The public is not. The two are on a collision course, with the industry likely the long-term loser.

To prevent that collision, what we need is a plenary review of the entire industry, emphasizing new designs and future prospects. The public wants more safety but has no idea how to achieve it or how much it would cost. The industry has no idea what direction to take, so it stays the current (and unacceptably dangerous) course. Lack of knowledge produces mutual paralysis.

It goes without saying that any reliable, plenary analysis must come from experts, not politicians or economic/policy think tanks. It should involve the most knowledgeable and respected experts not only here in the US, but worldwide. And it must include experts from every relevant field: nuclear physics, nuclear proliferation, nuclear engineering, nuclear safety, radiation medicine, public health, energy economics, and power-plant economics.

There is no reason why this study should not be a global collective effort. After all, a subsidiary goal would be to reduce the risk of weapons proliferation and develop a power-plant cycle with no risk of encouraging weapons development or making it easier. And in the short-to-medium term, who wouldn’t want to help one’s neighbors (or even adversaries) reduce their use of fossil fuels, thereby lowering their cost for everyone and retarding the acceleration of global warming?

A delayed decision is a poor decision. While advocates for this or that plead their cases, mostly based on personal or institutional self-interest, the obsolete plants continue to run, bringing the next nuclear catastrophe closer and closer. If another one happens anytime soon, the rest of the world will likely take the path of Germany and Japan.

Ultimately, that might not be the worst outcome. But as an intelligent species, we shouldn’t make that fateful choice without proper study and consideration.

So the public needs to know from experts how safe nuclear power can be made and how much safety will cost. It needs to hear from experts about the benefits of nuclear power, the extraordinary benefits promised by LFTRs, and the cost and time frames for realizing them. Only then can policy makers, let alone the public, make rational decisions.

The most likely consequences of the present vacuum of reliable public information are: (1) a return to fossil fuels, (2) accelerated global warming, and (3) a series of scarcity-induced economic crises as even shale gas runs out. If we use shale and other natural gas to replace coal and run our cars, shale gas will last us less than four decades.

So we’d better get cracking on safe nuclear power. Since the field is so complex and expensive, the first step is a thorough, expert and preferably international study of the options for research, development and implementation.


Footnote: Here I refer to the reactor, reactor vessel, systems for moderating the reaction and shutting it down, containment structure, spent-fuel storage pools, cooling systems, and their supporting physical structures: pipes, tubes and valves. The instrumentation and control electronics have been updated from time to time. But the basic designs of the things that generate power and pose risks of meltdown and the spread of radioactivity in a failure (like Chernobyl) or natural disaster (like Fukushima) are nearly half a century old. The result is like putting new avionics in a World-War-II piston-propeller aircraft.

Coda: A Possible Meltdown-Proof Design

The idea of a meltdown-proof fission reactor is not just bare theory. With a little imagination, one can conceive of real designs that could work.

In our present, outmoded reactor designs, cylindrical rods contain the nuclear “fuel,” i.e., the fissionable material whose approach to critical mass causes the nuclear reaction that generates heat. But suppose the fuel-containing elements were spheres inside those cylinders. Suppose further that their “skin” was a metal or ceramic with a very high melting point that was relatively permeable (and impervious) to neutron fluxes, so as not to retard the nuclear reaction in normal operation.

Now suppose that these fuel spheres were stored in vertical cylinders of the same “skin” material. At the bottom of the spheres, a circle of the same material, able to support the spheres’ weight at normal temperatures, would hold them inside the cylinders. But what would hold that circle in place against the weight of the fuel spheres above would be bolts or other fasteners made of an alloy that melts at a specially selected temperature.

That melting temperature would be high enough above the reactor’s normal operating temperature to provide a reasonable margin of operating error. But it would be low enough to provide a considerable margin of safety. That is, the fasteners would be designed to melt, and let the fuel spheres fall out of their vertical holding cylinders, long before the reactor’s temperature reached levels dangerous to the containment vessel or the reactor itself.

Underneath the collection of fuel-sphere-containing cylinders would be a thing that looks like the working part of a old-fashioned lemon juicer. It wouldn’t be like the modern plier types. Instead, it would look like a symmetrical mountain with grooves in its slopes. The grooves would be larger than the fuel spheres and would radiate out in all directions.

When the reactor reached the critical temperature in an emergency, the fasteners would melt. Propelled by gravity, the fuel spheres would fall out of their containing cylinders onto this “mountain,” where the grooves would direct them outward in all directions. They would roll outward in their separate grooves until there were nothing resembling a critical mass of fuel anywhere in the reactor vessel.

When the little spheres of fuel rolled far enough apart physically, the reaction would cool down. If the spheres’ collecting points were numerous enough and far enough apart, they would roll to a point where no further cooling would be necessary—certainly none that required continuous water cooling.

To prevent meltdowns, all this sort of design would rely on is two ineluctable natural phenomena: the melting points of materials and the force of gravity. It would need no electric power, no delicate instruments, and certainly no continuous cooling to stay safe.

With modern automated robots inside the containment vessel, this design could have another advantage. After the emergency had passed, robots inside the containment vessel could install new bottoms and meltable fasteners in the fuel cylinders, pick up the dispersed fuel spheres, and put them back in. They thus could restore the reactor to normal operation again with the help of restored electric power.

Not only would this design pose virtually no danger to human society outside the reactor vessel. It could prevent the reactor from damaging itself, allowing it to resume normal operation unless a major disaster, like the earthquake and tsunami in Fukushima, destroyed it completely.

Of course there would be engineering challenges in implementing this design. Creating a near critical mass for normal operation might require using small cylinders of fuel, rather than spheres, inside the master cylinders. That would make the “juicer mountain” more difficult to design. And making the fuel-unit “skin” for the spheres, mini-cylinders and containment cylinder, as well as the meltable fasteners, might require some advances in materials for use in the hellish, radioactive environment inside a nuclear reactor.

But the simple facts of history remain. No one thought of anything like this sort of design at the time the basic concepts of our current nuclear reactors were conceived. No one thought of it because reducing the risk of meltdown was not a design criterion. The first real meltdown came at Chernobyl in 1986. Our designs were conceived in the 1960s.

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02 June 2012

Looking for God in a Godless World


[Note to commenters: I’ve been traveling and am a bit behind in responding to comments. I’ll get to them in the next few days.]

What is “God”? That question may seem remote from our cares du jour—what’s going to happen in Europe and how it will affect our presidential election. But I think the question and its consequences have legs far longer than most people believe. Read on.

For agnostics like me, the question is much more interesting than whether God exists. People have been trying to prove or disprove that for as long as human history. No one has yet won that battle decisively, and probably no one ever will. So I don’t devote much time to thinking or reading about it, let alone trying to answer it. I much prefer to think about, “if God exists, what is God”? What is his/her/its essence?

To me, God is the personification of human morality. It’s what we do for each other and our species, rather than for our individual selves. It’s what motivates soldiers to die for their country, whistle blowers to call Citbank and its legions of lawyers out for institutional policies that foster and reward liars’ loans, and Cory Booker to rush into a burning building to save a potential victim. It’s something that we believe in that’s bigger than ourselves, our families, and our human institutions.

You might think that this form of God contradicts our essential, selfish, individual nature. To an indefinable extent, that’s true. But which is the bigger and better part of our nature? Individually, we are weaker than many chimps, smaller than a horse or rhinoceros, and far more vulnerable than any big cat. Yet collectively, we are the top of the food chain and the dominant species on our planet.

So if “God” is what motivates us to work together, and occasionally to sacrifice our individual selves to the common good, it’s a big part of our evolution, our species and even our individual genetic identity. In that sense, God is built into our DNA.

But there, too, lies a paradox. Individually, we are weak, small and stupid. Collectively, we are strong, intelligent and masters of our small planet. So if God is to prevail among us, it must rely upon human institutions, too. It can’t depend entirely upon extraordinary people like Jesus, who come along only once every couple of millennia.

Hence the Catholic Church.

But, aye, there’s the rub. Any outsider who looks at the Catholic Church today—not to mention many Catholics—has to be full of doubt.

After murder, pedophilia may be our most repugnant crime. To use children’s immature, innocent and pristine bodies, against their will, to satisfy adults’ sexual cravings is a crime in any society. There can be no excuse of expediency, since most children cannot bear children, let alone from homosexual abuse.

So how could the Church, which has stood—often alone—for human morality for large parts of two millennia, institutionally countenance and conceal such repugnant crimes to protect its own?

That’s the significance of the trial now before a jury in Philadelphia. Unfortunately for the Monseigneur caught in the middle (after his Cardinal’s convenient death), the trial is not really about him. It’s about a human institution that protected criminals, under any moral code, for far too long.

But it’s even more than that. Religion itself is on trial. Religion requires human institutions to propagate and maintain itself. Run by humans, those institutions are inevitably fallible, whatever their divine pretensions. And their recent record is not particularly good, even as compared to much-maligned secular governments.

So it is that secular governments are prosecuting Catholic pedophiles, and the tide of prosecutions will only wax larger. Civil suits are like to follow, with large damage awards. If successful, they might do what centuries of wars with Protestants could not. They could give the coup de grace to the mightiest religious institution in human history.

The Catholic Church is not the only failing religious institution. Islam is failing, too. Many of its practitioners can’t see the writing on the wall, but it is there to see.

Islam suffers from the exact opposite of the Catholic disease, which is too much centralization in Rome. In contrast, Islam is dispersed. Not only does it have various sects, including Sunni, Shiites, Wahhabis, and Sufis. Even within each sect, it has no universally recognized religious authority. How else could the late Obama bin Laden, a Saudi renegade with absolutely no religious training or authority, purport to issue a “fatwa” (religious decree) ordering Muslims to kill innocent Americans and Westerners wherever they may be found?

If a Catholic assumed religious authority in like manner, he/she would be excommunicated in short order. But Islam is decentralized, and that is both a blessing and a curse. It is still waiting for its Martin Luther to set individual consciences free to see God in their own individual way. Yet while it waits, it is vulnerable to false pretenders like bin Laden and al-Awlaki, and their self-evident evil stains its legacy and promotes Islamophobia.

So what have believers of various stripes today? The two great proselytizing religions—Catholic Christianity and Islam—are on the ropes. Karol Józef Wojtyła, known to Catholics as Pope John Paul II, was one of the last millennium’s greatest Catholic leaders. But he is dead. His successor is nothing more than a religious accountant or lawyer. He is an anally retentive scholar without a soul, ignorant of all the great social movements of our time, opposed to women’s ordination and justice for homosexuals.

Grand Ayatollah Ali Sistani of Iraq appears to have the intellect but not the leadership. While mimicking our doctrine of separation of church and state, his brand of “quietism” keeps him from mimicking Pope John Paul II. Into the vacuum of leadership that he and others left strode the late bin Laden, Murderer of Innocents.

So as people outside China and India look for moral sustenance, where can they turn? There is no easy answer.

That’s why I continue to believe in the President. More than any other current leader, he seems to understand an essential truth about our species. Individually, we are nothing. We are individual animals brighter than birds and monkeys, nothing more.

But collectively, we can remake ourselves in God’s image. We can make a Paradise for ourselves, right here on this Earth, if we cooperate and love our enemies and our neighbors as Jesus taught. Or we can make our Earth a Hell, by fighting each other and ignoring the clear and present danger of global warming.

More than any politician in my lifetime, with the possible exception of Karol Józef Wojtyła, the President understands this essential truth about our species. Time after time, he has sought compromise over confrontation, often to his political disadvantage. In 2008, I thought he could attract some evangelicals and other believers to his side. I think he still can. (Or at least he could convince them to stay home on election day.)

The major theme of this election is of course the economy. But an important minor theme is the search for God, in the form of much-neglected human morality.

It’s there in the search for a way to keep Iran from becoming a belligerent nuclear power without starting a murderous war. It’s there in evangelicals’ quest for absolute truth in the Bible. It’s there in their misguided hope for an apocalyptic “Rapture,” which would likely take the form of nuclear Armageddon or runaway climate change. It’s there in the anguish of so many Catholics, who are trying to decide whether to leave the Church that has nurtured them from birth but has also coddled pedophiles.

There is no way that Mitt Romney can tap into this angst. He’s a Mormon—a member of an outlying religion misunderstood and distrusted by the vast majority of Americans. For largely good reasons, neither he nor the President wants to introduce Romney’s religion into the campaign. More important, he has lied far too often—even about his successes, such as health-care mandates in Massachusetts—to claim the mantle of moral leader. Who can believe in a man who changes his views with every poll?

The President can exploit this moral angst. At his core, he is a moral man, a Man of God, if you will. Again and again, he has turned his cheek and tried to cooperate with his sworn enemies, just as Jesus advised. He has tried honestly to find common ground with adversaries as varied as the Tea Party and Iran. And while (for good reasons) he has broken some campaign promises, he has always tried to tell the truth, concealing only actionable intelligence.

So I cannot understand why neither he nor his campaign has yet introduced this attractive facet of his persona into the campaign, as subtly as they feel necessary.

In a Godless world, believers and even unbelievers are looking for something to believe in, just as they were in 2008. Obama has it in him, but he has to bring it out. It will take some of his superb political understanding, not just quoting scripture, to do it in a way that modern people, both religious and secular, can understand.

But he can do it. Doing so might give him victory, no matter what happens in Europe. And even if he loses, he can leave a moral legacy he can be proud of. After two millennia, who remembers Caesar more than Jesus? And whom does Obama resemble more?

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