Ensuring America’s Freedom of Movement: A National Security Imperative to Reduce U.S. Oil Dependence was issued by CNA in October 2011. (CNA, in this case, is a not-for-profit analytical organization located in Alexandria, Virginia, and is not to be mistaken for the Chicago-based insurance and financial services company.) Ensuring America’s Freedom of Movement is a product of CNA’s Military Advisory Board (MAB), and is the fourth report issued by the MAB. Accordingly, I refer to it in the rest of this review as MAB4.
This review may be somewhat out of date in places, though not in its thrust. I began writing it almost two years ago, when Ensuring… was published. I have not been in a hurry to post this review because Ensuring… is an inconsequential bit of fluff and unlikely to influence policy. But post I must, because the existence of the MAB and MAB4 are affronts to the distinguished intellectual heritage claimed by CNA.
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A critical reader — someone who is not seeking support for preconceived policy prescriptions — will be disappointed in MAB4. If there are valid arguments for government initiatives to foster the development and use of alternatives to oil, they do not leap out of the pages of MAB4.
The main point of MAB4 is to urge
government … action to promote the use of a more diverse mix of transportation fuels and to drive wider public acceptance of these alternatives. (p. xiv, emphasis added)
The CNA MAB supports the President’s plan to act now to address the worst effects of climate change and to improve our nations’ energy posture and competitive advantage in clean energy markets. The CNA MAB continues to identify the security implications of climate change and to protect and enhance our energy, climate and national security today and for our future generations. (June 26, 2013)
Despite token acknowledgement of the power of markets to do the job, the authors consistently invoke the power of government, in the name of “stability.”
There is much pointing-with-alarm at the instability caused by “dependence” on imported oil — with a focus on the Middle East. But the only “hard” estimate of the price of instability is a poorly documented, questionable estimate of the effects of a 30-day closure of the Strait of Hormuz on GDP and the output and employment of the U.S. trucking industry. Empirical estimates of the effects of sudden reductions in oil imports (oil shocks) are available, but the authors of MAB4 did not use them — or perhaps did not know about them.
It would have been instructive to compare the cumulative losses to GDP resulting from actual oil shocks with (a) the costs of maintaining forces in the Middle East to deter overtly hostile shocks (e.g., the closure of the Strait of Hormuz by Iran) and (b) the costs to taxpayers and consumers of government subsidies and edicts to promote the development and require the use of alternative energy sources. But no such comparison is offered, so the critical reader has no idea whether efforts to wean the U.S. from oil — especially imported oil — make economic sense.
Moreover, the authors of MAB4 reject the possibility of drawing down U.S. forces in the Middle East, for “strategic” reasons, which means that (in the authors’ view) taxpayers should continue to foot the bill for Middle East forces while coughing up additional sums to subsidize the development and use of alternative energy sources. I am all in favor of a forward strategy that is aimed at deterring and countering adventurism on the part of America’s enemies and potential enemies. It would be foolish in the extreme to allow our enemies and potential enemies to aggrandize their power by denying America’s access to a vital resource, such as oil. (Iran and China, I am looking at you.) It would be (and is) doubly foolish to throw bad money after good by also succumbing to the lobbying efforts of corn-growers, makers of solar panels, and kindred rent-seekers.
In sum, MAB4 is a piece of advocacy, not objective analysis. True believers in the wisdom and infallibility of government will rejoice in MAB4 and hope, pray, plead, and work for the adoption of its recommendations by the federal government. Critical readers will check their wallets and wonder at the naivete and presumptuousness of the 13 retired flag and general officers who constituted the MAB when CNA extruded MAB4.
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I will elaborate on the preceding observations in the rest of this review, which has six main parts:
- I. Background: CNA and the MAB — This part is for the benefit of those readers — almost all of you, I’m sure — who know nothing of CNA or its Military Advisory Board.
- II. An Overview of MAB4 — This part outlines the organization of MAB4 and summarizes its findings and recommendations, which come into play throughout the review.
- III. The Hidden Foundation of MAB4 — MAB4’s findings and recommendations rest on a foundation of hidden assumptions — biases, if you will. Part III articulates those biases.
- IV. The Analytical Superstructure of MAB4 — This part focuses on the facts and logic of the substantive portions of MAB4, namely, Chapters 1 and 2. They are found wanting.
- V. MAB4 vs. CNA’s Standards — CNA proclaims itself an organization that upholds a long tradition of high standards and objectivity. Are the MAB and MAB4 consistent with that tradition? Part V answers that question in the negative.
- VI. Summary Assessment — A final 534 words, for the benefit of readers who want to skip the gory details.
(The rest of this very long review is below the fold.)
I. BACKGROUND: CNA AND THE MAB
A. CNA’s Origin, Mission, and Stated Standards
This section gives background information about CNA, for readers who may be unaware of its history. There is more to this recitation than background; MAB4 (and perhaps its predecessor reports) should be assessed in light of CNA’s distinguished history and stated ideals. The following quotations are taken from CNA’s website, as of this date:
CNA’s approach to research is a modern iteration of the Newtonian principle that complex, dynamic processes are best understood through direct observation of events and people.
That was the methodology CNA’s analysts first applied in the 1940s when they pioneered the field of operations research by helping the Navy address the German U-boat threat. Not content to study the problem from afar, this small group of MIT scientists insisted on deploying with Navy forces in order to observe operations and collect the data needed for meaningful analyses. Their groundbreaking work, and the anti-submarine warfare equations it produced, set a standard for operations research methods that CNA has maintained for 70 years.
Today, with more than 350 professionals at its headquarters and 45 researchers in the field, CNA still takes a real-world approach to its work. On-site analysts carefully observe all aspects of a process—people, decisions, actions, consequences—and then collaborate with a headquarters-based research team to assess data, and arrive at findings.
CNA’s research model has proved valuable to an array of government decision makers, and its work, which in its early decades focused solely on defense-related matters, has grown to include investigation and analysis of a broad range of public-interest issues including education, health care and public health, homeland security, and air traffic management.
CNA operates on the principle of conducting honest, accurate, usable research to inform the important work of public policy decision makers—a principle that is never compromised.
Neither of the quoted passages refers to the MAB. But, as discussed next, the MAB is a component of CNA, it is supported by persons from CNA’s other components, and it is overseen by an officer of CNA, who approved MAB4. It is therefore reasonable to assume that the foregoing standards are meant to apply to the MAB and its products. Whether MAB4 meets those standards is one of the subjects of this review.
B. The MAB and Its Relationship to CNA
CNA’s website indicates that the MAB is a creature of the corporation, not a part of CNA’s Center for Naval Analyses, a Federally Funded Research and Development Center (FFRDC) sponsored by the Department of the Navy (DON).
The first paragraph of the prefatory section of MAB4 (“To the Reader”) gives some background about the MAB and its efforts:
In 2006, CNA brought together 11 recently retired three and four-star generals and admirals to form a Military Advisory Board (MAB), with the goal of examining the national security implications of climate change. Over the last five years, the CNA MAB has published three reports on the nexus of energy, climate, and national security. In this most current report, which is the result of the fourth convening of the MAB, we focused our efforts on the national security implications associated with shifting the U.S. transportation sector to alternative fuels. (p. iii)
As of the issuance of MAB4, the MAB consisted of 13 retired flag and general officers: 3 Army, 4 Navy, 3 Marine Corps, and 3 Air Force.
The Executive Director of the MAB is Sherri Goodman, Senior Vice President, General Counsel and Corporate Secretary, CNA, and former Deputy Under Secretary of Defense for Environmental Security (p. v). According to the Wikipedia article about Goodman, she has
overseen four major reports establishing the links between U.S. energy policy, climate change and national security: “National Security and the Threat of Climate Change” (2007), “Powering America’s Defense: Energy & the Risks to National Security” (2009), “Powering America’s Economy: Energy Innovation at the Crossroads of National Security Challenges” (2010), and [the subject of this review] “Ensuring America’s Freedom of Movement: A National Security Imperative to Reduce US Oil Dependence” (2011).
A CNA research team contributed (in unspecified ways) to the preparation of the report. The team consisted of a program manager, lead writer, and four research analysts (p. v). The report was prepared and produced with the help of several other members of the CNA staff (p. vi).
In short, MAB4 may be taken to represent CNA — for better or for worse.
II. AN OVERVIEW OF MAB4
The document begins with an “Executive Summary,” which opens with a statement about the relevance of the authors’ military experience. This is followed by a recap of the contents of the report, which — at more than five pages in length — is a good substitute for reading the 19 pages of relevant material comprised in Chapters 1 and 2.
The heart of the report is Chapter 1, “Much to Gain: The National Security Benefits of Reduced Oil Use.” There, the authors’ contend that significant foreign-policy, defense, and environmental problems will be alleviated by a 30-percent reduction in the rate at which the U.S. consumes oil. The attainment of that reduction becomes the authors’ rallying cry.
Chapter 2, “Alternatives to Oil,” is a compendium of ways in which the U.S. — including the armed forces — might cope with a 30-percent reduction in oil use. One way, of course, is to use oil more efficiently. The other ways are to bring on line and encourage the use of substitutes for oil.
There is a coda, “Efficiency, Diverse Fuels and Shared Responsibility.” It is an exhortation to pull together, and do what the authors would like us to do. Pulling together, of course, means “collective” action, decreed by America’s “leaders.” No more shilly-shallying around with somewhat free markets and consumers’ preferences.
Scattered through the report, on nine pages headed “The Voice of Experience,” are authors’ statements that seem calculated to underscore the urgent and commanding tone of the report.
I will say no more about the coda or the authors’ statements. To do so would be to give undue attention to the authors’ appeals to authority. This review focuses on the assumptions, facts, and logic that underlie MAB4’s findings and recommendations.
B. Findings and Recommendations
Although MAB4 stands or falls on the substance of Chapters 1 and 2, the Executive Summary is a useful point of departure for an assessment of those chapters. According to the Executive Summary:
1. America’s dependence on oil constitutes a significant national security threat.
2. A 30 percent reduction in “our” use of petroleum would significantly improve our national security.
3. “We” can achieve a significant portion of a 30 percent reduction through greater efficiency in how “we” use oil.
4. There are many promising alternatives to oil as a transport fuel—some available today, others on the horizon. If managed properly, all of the most promising alternative fuels examined can reduce overall national security risks rather than continuing “our” overreliance on oil as a singular fuel source.
(I have put “our” and “we” in quotation marks because government is not the main consumer of petroleum in the U.S. It is tellingly presumptuous that petroleum in private use is considered “our” petroleum, about which “we” must do something. That mindset leads to the belief that “we” — meaning the government, acting at the behest of kibitzers and pundits — should dictate to private users of petroleum. As I will discuss, there is ample reason to reject that belief.)
The authors’ line of argument is followed by several recommendations:
1. To assure our national security, government must take action to promote the use of a more diverse mix of transportation fuels and to drive wider public acceptance of these alternatives.
2. In the immediate future, our nation’s leaders must develop a comprehensive energy roadmap or strategic plan to enable consistent and strategic energy policies and investments.
3. The U.S. must take swift and aggressive action to reduce our use of oil.
4. The Department of Defense should continue to be a leader in advancing alternative transportation fuels while balancing mission effectiveness and overall efficiency. DOD must be provided the necessary resources so innovation and experimentation with alternative fuels is not traded for military capability and capacity. DOD should be provided with the necessary authority to establish long-term alternative fuel contracts as a way to assure markets and lower the alternative fuel price.
III. THE HIDDEN FOUNDATION OF MAB4
A. Analysis or Advocacy?
I worked at CNA for 30 years, and spent 16 of those years as an analyst, director of analysts, and reviewer of analytical reports. My first assignment was as a cost analyst on a project that compared the costs and effectiveness of land-based (USAF) and sea-based (USN) tactical air power in a variety of scenarios. I learned quickly that there is a template for cost-effectiveness projects. The template consists of two simply stated (but sometimes poorly executed) practices:
- Postulate an objective; assemble an array of alternative, closely competing options for attaining the objective (e.g., alternative types of bases, aircraft, and weapon loads); and, then, holding constant the costs or effectiveness of the options, determine which option would (on paper, at least) be the most effective or cost the least.
- Identify critical assumptions and variables; estimate the effects of variations in the assumptions and values of variables on the cost-effectiveness comparisons; and display prominently the results of the variations (sensitivity analyses) in the documentation of the results of the analysis.
I mention this for three reasons. First, the objective postulated by MAB4 – the reduction of U.S. oil use by 30 percent – is not the relevant objective, as I point out below. Second, the issue central to MAB4 — “dependence” on oil and its national-security implications — could have been treated as a cost-effectiveness problem, but is not. Third, although there is much discussion of various ways of achieving the objective preferred by the authors — less “dependence” on oil — there is nothing resembling a sensitivity analysis, which is unsurprising, inasmuch as there is no cost-effectiveness analysis to begin with.
MAB4 is advocacy adorned by analysis. This kind of advocacy often goes by the name “policy analysis.” Policy analysis is intended to support a political position — in this case, the formulation of an “energy policy” that would dictate, more than ever, the kinds of energy available to Americans and the characteristics of vehicles (and other things) that use energy.
Policy analysis often seems credible, especially on a first reading. But, on inspection, it is usually has these characteristics:
- It stipulates or quickly arrives at a preferred policy, then marshals facts, calculations, and opinions that are selected because they support the preferred policy.
- If it offers and assesses alternative policies, they are not placed on an equal footing with the preferred policy. They are, for example, assessed against criteria that favor the preferred policy, while other criteria (which might be important ones) are ignored or given short shrift.
- It is wrapped in breathless prose, dripping with words and phrases, like these that are found in the opening paragraphs of MAB4’s findings and recommendations: “Immediate and aggressive action,” “consequences of inaction … are grave,” “sense of genuine urgency,” “American leadership is at a perilous point,” “demand for oil is increasing at an alarming rate,” and “This is our moment, and we must act.”
Policy analysis, nevertheless, can be of value if it brings to the discussion of a serious issue novel concepts or fresh insights. Perhaps, despite the defects that I have outlined, and will describe in detail, MAB4 conveys novel concepts or fresh insights. We shall see.
B. Wag the Dog
MAB4 is built on a central assumption, to which I will come after relating an anecdote and making some observations about university life.
I studied at Michigan State University on a General Motors Scholarship. There was an annual dinner for GM Scholarship students, and the guest list included members of the MSU administration and faculty. At one of the dinners – probably in 1959 or 1960 – I was seated across from MSU’s first provost, Dr. Paul A. Miller. The conversation between Dr. Miller and those seated near him naturally turned to the question “What does a provost do?” Dr. Miller related this obviously well-rehearsed, tongue-in-cheek explanation:
The job of the university’s president is to make speeches, and the job of the university’s students is to think. The job of the provost is to keep the president from thinking and the students from making speeches.
That was some years before student speech-making (and less peaceful activities) became commonplace on campuses across the land, and before it became the job of the president of a university to provide an atmosphere in which only those speeches could be made that would not offend any one of several privileged groups of students. It was also before the mission of universities changed from that of helping students to acquire knowledge and habits of systematic, critical thinking to (in many departments, in most universities) that of transmitting and reinforcing pre-packaged attitudes toward “relevant social issues.”
The point of the anecdote about the duties of a provost is this: The job of the armed forces of the United States is to protect Americans and their legitimate overseas interests, so that Americans can get on with the business of deciding for themselves how best to organize their lives and livelihoods, mainly through voluntary and mutually beneficial social and economic arrangements. MAB4 turns that formula upside down. Its authors assume that government should increasingly dictate how Americans organize their lives and livelihoods so as to reduce the possibility that the armed forces of the United States will be required to protect those lives and livelihoods.
C. Semantic Confusion and Fear-Mongering
The preceding observations find reinforcement in the authors’ heavy reliance on the theme of “dependence.” Not only is “dependence” a key word in the title of MAB4, but “dependence,” its variants, and cognates — “overdependence,” “dependency,” “independence,” “addiction,” “rely,” relying,” “reliance,” and “overreliance” — appear more than 60 times in the text of MAB4. Those words are not neutral descriptors; they are value-laden substitutes for facts and logic.
Americans are not “dependent on” or “addicted to” oil. Americans — or the vast majority of them who do not draw the large, secure pensions that accrue to retired general and flag officers — are striving to better their lot. Oil is a resource that enables their striving. Curtailing the use of that resource without replacing it with something equally affordable may sit well with comfortable policy-making elites, but it should not sit well with anyone who actually cares about the well-being of his fellow citizens, the vibrancy of America’s economy, and the affordability of its defenses.
The idea of becoming less “dependent” on foreign oil — especially less “dependent” on oil that originates in the Middle East — is not a new one. It dates back at least to the “oil shocks” of the early 1970s. But the idea of “independence” enjoyed a resurgence in the wake of the Gulf War of 1990-1991, which was patently fought for the purpose of protecting the strategically situated oil-rich nation of Kuwait.
The war in Iraq — the immediate aim of which was to overthrow a hostile, oppressive regime — became conflated with the issue of American “dependence” on oil because cynics painted the war as a grab for Iraq’s oil. And no sooner had Iraq been tamped down than oil-rich and strategically placed Iran took advantage of America’s war fatigue to make belligerent noises while advancing its nuclear-weapons program.
The enmity between Israel and Iran only complicates matters, inasmuch as open conflict between Iran and Israel could lead to the closure of the Strait of Hormuz, through which a significant share of the worlds’ oil flows. And U.S. support for Israel, as against the Palestinian cause, was cited by Osama bin Laden as the raison d’être for the 9/11 attacks. But even before that, bin Laden had begun to target U.S. forces and embassies because of American “occupation” of Saudi Arabia, in the aftermath of the Gulf War.
Then there is the highly charged issue of “global warming,” which revolves around the issue of CO2 emissions and the effect of those emissions on global temperatures. As a consequence, “oil” has become a “dirty word” in its own right. (I will have more to say about the “global warming” issue in my comments about Chapter 2.)
Therefore, “dependence” on oil is “bad” because it conjures interwoven themes: America’s involvement in the long-troubled Middle East; America’s long-standing support of beleaguered Israel; the events of 9/11 (of which too many Americans said “we had it coming”); and the “badness” of oil itself, as a contributor to “global warming:” thus:
The global demand for oil has affected military engagements, been associated with economic recession, reshaped geopolitical relationships, caused domestic political upheaval, and led to significant environmental harm. Our own heavy use of oil has allowed or increased some of these destabilizing impacts. Reducing our use of oil can change this balance, increasing the prospects for stability. (p.1)
This is nothing more than fear-mongering, in the service of … what?
D. Stability for Our Time?
Would the authors of MAB4 abandon the Middle East? That is an implication of their observation (pp. 4-5) that “the annual military cost of protecting oil traffic in the Arabian Gulf was $74 billion.” Why mention the cost unless it could be eliminated or reduced significantly by curtailing “dependence” on oil from the Middle East?
The authors quickly deny any such implication:
It is our view that there are several other strategically important reasons for maintaining a significant military presence in the Middle East beyond protecting oil routes—we do not necessarily believe that reduced oil consumption would automatically lead to the return of troops stationed in the region. However, it is clear that by reducing U.S. demand for oil, and thereby reducing U.S. economic vulnerability to supply and price shocks, the United States would increase its options in military presence, operations, and costs in that region….
…If we begin to act now to make the U.S. economy less sensitive to turbulent oil prices (while other countries grow more sensitive), our leverage will increase when asking other countries to supplement, or cooperate with, U.S. forces in assuring the flow of oil through the region. The U.S. will, in our view, be relieved of some of the military and economic burden of protecting those sea lanes, and be able to focus resources elsewhere. This would also support a broader notion of shared global security, with regional challenges addressed with strong collaboration among allies.(p. 5)
The authors are right to suggest that the Middle East is too important strategically to be abandoned by the U.S. In fact, the U.S. must maintain a strong presence in the region for at least two strategic reasons. The first is to signal support of Israel, which — in addition to being a traditional ally of the U.S. — is a counterweight to militant, anti-American regimes in the region. The second is to ensure that the oil riches of the Middle East do not fall into hostile hands, as they could if a hostile regime (most likely Iran) were left unchallenged and, acting alone or with the support of another ambitious regime (e.g., Russia or China) subjected the U.S. and Europe to “oil blackmail.” Given those considerations, neither a military withdrawal nor draw down is in prospect. But — and this is a point that the authors seem to overlook — the maintenance of a strong U.S. presence in the Middle East would diminish the possibility that a hostile power (e.g., Iran) will try to interrupt the flow of oil, and such a presence would enable the U.S. to respond swiftly to any such interruption. Further [as I will discuss when I come to Chapters 1 and 2]:
- “Independence” from Middle Eastern oil will not insulate the U.S. from the effects of a disruption of the flow of that oil to the rest of the world.
- The relatively low cost to the U.S. of an oil shock almost certainly does not justify the burden of shifting prematurely (i.e., by governmental edict) from oil to alternative energy sources.
What the authors seek is a pretense of “independence” and the illusion of stability: Stability for our time, to paraphrase Neville Chamberlain.
E. The Nirvana Fallacy Writ Large
MAB4 is, above all, an exhortation to government to “do something” about “something.” This is a formula that has been invoked since the beginning of the Republic, though increasingly more often since the onset of the Progressive Era in the late 1800s. The exhortation betrays three beliefs, unconscious as they may be on the part of those who do the exhorting.
The first belief is that a particular phenomenon is so important — in the view of the exhorting person or group — that government should contrive to impose a particular outcome with respect to that phenomenon — regardless of the costs of that imposition, in treasure or liberty.
The second belief is a kind of prediction that proponents of government action usually cannot be bothered to test. This kind of prediction is known as the Nirvana fallacy: the logical error of comparing actual things with unrealistic, idealized alternatives. The actual things are the “somethings” about which government is supposed to “do something.” The unrealistic, idealized alternatives are the outcomes sought by the proponents of a particular course of government action. Thus legislation and regulation by mere mortals is taken as the functional equivalent of fiat lux.
This points to the third belief, which is that government — a mere creation of fallible, squabbling, power-lusting humans — is a kind of omniscient, single-minded, benevolent being that can overcome the forces of nature and human nature which gave rise, in the first place, to the “something” about which “something must be done.”
The evidence against these beliefs is so overwhelming that their persistence must be attributed to the psychological phenomenon summarized by Samuel Johnson as “the triumph of hope over experience.”
Proponents of government action will counter with the excuse that “something must be done” because of “market failure,” which is the failure of markets to produce outcomes preferred by the proponents. And yet they overlook government failure, and often seek to rectify it by exhorting more government action, which leads to more government failure, and so on.
Here are some salient examples of government failure — and its correlate, misfeasance — that ought to (but will not) give pause to the “do something” crowd:
U.S. Postal Service — Nothing more need be said, except that it has bled red ink for years because of the ineptitude of its leadership, the obstinacy of Congress, and the power of the various unions that represent the bulk of USPS employees.
“Entitlements” (Social Security, Medicare, Medicaid, and their expansion through Obamacare) — These grew from an understandable (but ill-advised) urge to provide for the elderly who were seen as unable to provide for themselves. Through the predictable processes of constituency-mongering, the “social safety net” has acquired almost-inviolable status as a subsidy for millions of persons who could well provide for themselves. This dependency has discouraged thrift and, in the process, stripped away a key source of funds for investments in economic growth. The looming burden of taxation promises to cripple an already hobbled economy.
Welfare, the Minimum Wage, and Affirmative Action — Altogether, these programs have succeeded in breaking up black families, denying to many young blacks an opportunity to join the ranks of the economically productive (and to advance on their own merit), fomented crime, caused racial resentment, and positioned aspiring black students and professionals for failure.
The Great Depression and the Great Recession — These two devastating economic downturns, one of which became an excuse for the enactment of Social Security and the other of which still lingers, are quintessential examples of government failure. In the case of the Great Depression, the Federal Reserve’s monetary policies (first too loose, then too tight) caused a recession to deepen into a depression. That depression lingered for almost a decade (and ended largely because of a catastrophic war) because of interventionist, anti-business policies that began under Hoover and continued, with a vengeance, under Roosevelt. We owe the Great Recession to a combination of too-loose credit (the Fed again) and too-loose mortgage lending: a policy insisted upon by the Federal Reserve and influential members of Congress, and reinforced by their minions at Fannie and Freddie. “Wall Street” — as a willing maker of credit — deserves blame for the resulting financial meltdown and recession only in the way that a prostitute deserves blame for serving her clients.
The Unnecessary Prolongation of World War II — See this, unless you cannot bear to think of FDR as anything but wise and saintly.
Defense and Police Services — These are public goods, but not for the reason advanced by believers in public goods, namely, that they would not be provided voluntarily because too many of their beneficiaries would try to take a “free ride” on paying customers, which would drive the prices of defense and police services too high to attract enough customers to pay for them. But that is an unproved assertion, which runs counter to everyday experience (e.g., charitable giving and voluntarism) and ignores the very high stakes that could drive major corporations and very-high income earners to combine in a joint defense of their considerable interests in the U.S. and abroad — a defense that would unavoidably benefit free-riders. In this regard, it is noteworthy that in 2007 the combined pre-tax income of households in the top quintile was $2.5 trillion and pre-tax corporate profits came to $1.7 trillion. It is arguable that a consortium of taxpayers and corporations could underwrite the cost of defense and police forces (including courts, prosecutors, etc.), which in 2007 came to about $900 billion ($662 billion for defense and $230 billion for justice). Further, it is also noteworthy that private security forces in the U.S. employ about 1 million persons (Figure 4, here), which is strong evidence of the willingness of businesses and wealthy persons to pay for self-defense.
A main consequence of the “publicization” of America’s defense and police forces is that they offer lucrative opportunities for various kinds of pork-barrel legislation (e.g., the location of military bases, the awarding of defense contracts, and patronage for political supporters), as well as the usual instances of waste, fraud, and abuse. Defense and policing are not sacrosanct functions of government, and their provision by government is far from an unmitigated blessing.
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Is government failure inevitable? Yes. Markets punish failure, as evidenced by the disappearance many large corporations and vast numbers of smaller businesses. But government — because of it power to compel obedience and financial support — can ignore failure and even reward it by throwing good money after bad.
V. THE ANALYTICAL SUPERSTRUCTURE OF MAB4
A. Chapter 1 – Much to Gain: The National Security Benefits of Reduced Oil Use
1. There Is More to National Security than Stability
For the authors, the key element of national security — the one that implicates oil — is stability:
Political stability involves ensuring internal order and governance, so that major institutions can function continuously and effectively. Geopolitical stability involves healthy relationships with the community of nations, so the nation can thrive in a global economy….
…It takes no leap of logic to see how global energy choices have often been destabilizing. (WWII in the Pacific was principally about Imperial Japan’s expansion to satisfy their need for raw material and oil in South East Asia.) As demand for energy grows and supply of petroleum shrinks, these effects may be magnified. The global demand for oil has affected military engagements, been associated with economic recession, reshaped geopolitical relationships, caused domestic political upheaval, and led to significant environmental harm. Our own heavy use of oil has allowed or increased some of these destabilizing impacts. Reducing our use of oil can change this balance, increasing the prospects for stability.
It is within this context that we consider the current national security implications of our oil dependence and, specifically, the implications of reduced consumption of imported oil. (pp. 1,2)
Stability, in other words, in the linchpin of MAB4. The problem with a focus on stability — and this applies to MAB4 — is that it ignores or dismisses the risk-reward equation. No pain, no gain, as the saying goes.
Should the fear of accidents have deterred the pioneers of the auto industry from, in effect, motorizing buggies and wagons? Should that fear have deterred many of those same pioneers and their many successors from constantly improving automotive design, thus enabling economic growth by moving vast numbers of persons and vast amounts of goods at rates and across distances that the buggy- and wagon-makers of the mid-1800s could not imagine? Stability is a luxury sought by timid souls and those who “have theirs.”
Imagine, if you can, the level of GDP had American companies (among others) had never taken the initiative to discover and exploit the vast reservoirs of oil that lie in regions of the globe which are now considered “unstable.” Should that initiative not have been taken? I am confident that the authors of MAB4 would answer “no” if the question were put to them. But that is the implication of their focus on the stability of oil production, especially in the face of possible threats to the flow of oil from the Middle East and other “troubled” areas. What the authors should have done, but did not do, is to compare the cost of keeping the oil flowing with the cost of developing, bringing on line, and using the alternatives to oil that they discuss in Chapter 2.
2. Jumping to the Conclusion
But having made stability the raison d’être of MAB4, the authors jump to the conclusion (there is no better phrase for it) that Americans, their businesses, and their governments ought to use less oil, and that this reduced “dependence” on oil will do much to avert the specter of instability that haunts the authors.
There is a middle ground that the authors seem to have overlooked: the substitution of domestic for foreign production of oil, as new domestic sources are discovered that can be exploited efficiently through the use of new technologies. In fact, oil imports, which accounted for 60 percent of U.S. consumption in 2005, now account for only 46 percent of U.S. consumption, and probably will account for less and less as the years go by, if the forces of economic regress can be held at bay. But the authors not only want to reduce imports, they want to reduce oil use, because their agenda is broader than national security. They have appointed themselves guardians of the environment and climate, as if there were not already enough such self-appointed guardians at work.
3. Upside-Down Economics: The Trade Deficit and other Bugbears
Returning to the matter of oil imports, the authors indulge in some dubious economic reasoning:
First, and perhaps most significantly, [a “meaningful reduction” in oil imports] would reduce the national trade deficit. In 2010, the cost of petroleum imports accounted for 42 percent of the $645 billion goods trade deficit . These outflows, which increase with rising oil prices, are funds that could otherwise buy domestically produced fuels or other goods, and support jobs and economic development at home .
Reducing oil imports would lessen the economic impact of the projected rise of oil prices. Most industry and government experts predict oil prices will continue to rise for decades . They cite growing demand in rapidly developing countries such as China and India; slowed or decreased production in traditional oil-producing regions; and a realization that oil must come increasingly from regions that are politically unstable, environmentally challenging, or technically difficult to access (like ultradeep-sea drilling). These forces will inevitably increase the spending of every American, not only on transportation fuel, but also on food, goods, and services that all rely on oil-fueled transport as well. (p. 2)
The authors should have consulted an economist before committing that passage to print. In the matter of the trade deficit, I turn to the late Herbert Stein:
Few subjects in economics have caused so much confusion—and so much groundless fear—in the past four hundred years as the thought that a country might have a deficit in its balance of payments. This fear is groundless for two reasons: (1) there never is a deficit, and (2) it would not necessarily hurt anything if there was one.
The balance-of-payments accounts of a country record the payments and receipts of the residents of the country in their transactions with residents of other countries. If all transactions are included, the payments and receipts of each country are, and must be, equal. Any apparent inequality simply leaves one country acquiring assets in the others. For example, if Americans buy automobiles from Japan, and have no other transactions with Japan, the Japanese must end up holding dollars, which they may hold in the form of bank deposits in the United States or in some other U.S. investment. The payments Americans make to Japan for automobiles are balanced by the payments Japanese make to U.S. individuals and institutions, including banks, for the acquisition of dollar assets. Put another way, Japan sold the United States automobiles, and the United States sold Japan dollars or dollar-denominated assets such as treasury bills and New York office buildings….
Because the current account and the capital account add up to the total account, which is necessarily balanced, a deficit in the current account is always accompanied by an equal surplus in the capital account, and vice versa. A deficit or surplus in the current account cannot be explained or evaluated without simultaneous explanation and evaluation of an equal surplus or deficit in the capital account….
Contrary to the general perception, the existence of a current account deficit is not in itself a sign of bad economic policy or bad economic conditions. If the United States has a current account deficit, all this means is that the United States is importing capital. And importing capital is no more unnatural or dangerous than importing coffee….
How about the issue of foreign ownership?…
Stein’s article continues with some outdated figures. Here is a more current view: As of the end of 2010, the net international investment position of foreigners was $2.5 trillion, or about 5 percent of the net value of of tangible assets in private hands, excluding land. Despite hysterical claims to the contrary, foreigners do not “own” the U.S. Foreign investments are a stake in America’s economic success, not a means of undermining it.
What about the so-called national debt, that is, the indebtedness of the federal government? Foreigners held 31 percent of U.S. government debt as of March 2011, about the same percentage as a year earlier and significantly greater than the 17 percent of 10 years earlier. Those foreign holdings have helped to underwrite government spending; whether that spending is a good or bad thing is a separate issue. The spending decisions preceded the borrowing, and — it is safe to say — that the cost of borrowing had little or no influence on the spending decisions. As for the borrowing, foreign investors have put their money in what they consider to be a safe place. If they reduce their holdings over time, it will be because they have doubts about the credit-worthiness of the U.S. government and the soundness of the U.S. economy — not because they have evil designs on the U.S.
What about the so-called “outflows” (the trade deficit) that are caused in part by purchases of foreign oil? The alternative to those purchases — unless and until more economical domestic sources of energy come on line — is to waste money by spending it on higher-priced domestic energy. That would not promote the purchase of “other goods” or “support jobs and economic development at home.” To understand this, think of trade between someone in Maryland and someone in Virginia — trade that is, presumably, beneficial to both parties or else they would not sustain it for long. If the Marylander decides to “buy Maryland” even if the he must pay more for the item he has been buying from the Virginian, he will have less money to spend on other items and less money to invest in some kind of job-producing venture. It makes no more sense to complain about buying goods because they are made in China than it does to complain about buying goods because they are made in Virginia.
What about the statement that “reducing oil imports would lessen the economic impact of the projected rise of oil prices.” If imported oil becomes increasingly more expensive relative to domestic alternatives, buyers will reduce imports on their own. But it makes no sense to reduce oil imports in anticipation of changes in relative prices that may not come to pass. Markets, if allowed to work, will send the price signals that alert everyone in the chain of production and consumption, from drilling rig to gas pump, that it is time to make a change.
The “peak oil” concept is a notable example of failure to understand the role of markets as signaling services. There is a hint of “peak oil” panic in the authors’ tone; for example: “As demand for energy grows and supply of petroleum shrinks….” (p. 1). “Peak oil” panic is another manifestation of non-economic thinking. As Daniel Yergin writes, the advocates of “peak oil”
argue that the world is fast approaching (or has already reached) a point of maximum oil output. They warn that “an unprecedented crisis is just over the horizon.” The result, it is said, will be “chaos,” to say nothing of “war, starvation, economic recession, possibly even the extinction of homo sapiens.”
The date of the predicted peak has moved over the years. It was once supposed to arrive by Thanksgiving 2005. Then the “unbridgeable supply demand gap” was expected “after 2007.” Then it was to arrive in 2011. Now “there is a significant risk of a peak before 2020.”…
This is actually the fifth time in modern history that we’ve seen widespread fear that the world was running out of oil. The first was in the 1880s, when production was concentrated in Pennsylvania and it was said that no oil would be found west of the Mississippi. Then oil was found in Texas and Oklahoma. Similar fears emerged after the two world wars. And in the 1970s, it was said that the world was going to fall off the “oil mountain.” But since 1978, world oil output has increased by 30%.
Just in the years 2007 to 2009, for every barrel of oil produced in the world, 1.6 barrels of new reserves were added. And other developments—from more efficient cars and advances in batteries, to shale gas and wind power—have provided reasons for greater confidence in our energy resiliency. Yet the fear of peak oil maintains its powerful grip.
The idea owes its inspiration, and indeed its articulation, to a geologist who, though long since passed from the scene, continues to shape the debate, M. King Hubbert. Indeed, his name is inextricably linked to that perspective—immortalized in “Hubbert’s Peak.”…
By 2010, U.S. oil production was 3½ times higher than Hubbert had estimated: 5.5 million barrels per day versus Hubbert’s 1971 estimate of no more than 1.5 million barrels per day. Hardly a “minor deviation.”…
“Hubbert was imaginative and innovative,” recalled Peter Rose, who was Hubbert’s boss at the U.S. Geological Survey. But he had “no concept of technological change, economics or how new resource plays evolve. It was a very static view of the world.” Hubbert also assumed that there could be an accurate estimate of ultimately recoverable resources, when in fact it is a constantly moving target.
Hubbert insisted that price didn’t matter. Economics—the forces of supply and demand—were, he maintained, irrelevant to the finite physical cache of oil in the earth. But why would price—with all the messages that it sends to people about allocating resources and developing new technologies—apply in so many other realms but not in oil and gas production? Activity goes up when prices go up; activity goes down when prices go down. Higher prices stimulate innovation and encourage people to figure out ingenious new ways to increase supply.
The idea of “proved reserves” of oil isn’t just a physical concept, accounting for a fixed amount in the “storehouse.” It’s also an economic concept: how much can be recovered at prevailing prices. And it’s a technological concept, because advances in technology take resources that were not physically accessible and turn them into recoverable reserves.
In the oil and gas industry, technologies are constantly being developed to find new resources and to produce more—and more efficiently—from existing fields. In a typical oil field, only about 35% to 40% of the oil in place is produced using traditional methods….
New technologies and approaches continue to unlock new resources. Ghana is on its way to significant oil production, and just a few days ago, a major new discovery was announced off the coast of French Guiana, north of Brazil.
As proof for peak oil, its advocates argue that the discovery rate for new oil fields is declining. But this obscures a crucial point: Most of the world’s supply is the result not of discoveries but of additions and extensions in existing fields….
Estimates for the total global stock of oil keep growing. The world has produced about one trillion barrels of oil since the start of the industry in the 19th century. Currently, it is thought that there are at least five trillion barrels of petroleum resources in the ground, of which 1.4 trillion are deemed technically and economically accessible enough to count as reserves (proved and probable).
Based on current and prospective plans, it appears that the world’s production capacity for “oil and related liquids” (in industry jargon) should grow from about 92 million barrels per day in 2010 to over 110 million by 2030. That is an increase of about 20%….
In 2003, the Bakken formation in North Dakota was producing a mere 10,000 barrels a day. Today, it is over 400,000 barrels, and North Dakota has become the fourth-largest oil-producing state in the country. Such “tight” oil could add as much as two million barrels a day to U.S. oil production after 2020—something that would not have been in any forecast five years ago.
Overall U.S. oil production has increased more than 10% since 2008. Net oil imports reached a high point of 60% in 2005, but today, thanks to increased production and greater energy efficiency (plus the use of ethanol), imports are down to 47% [now 46%, as noted above].
The inclusion of ethanol as a contributor to the reduction of net oil imports is gratuitous; ethanol currently supplants about 0.5 percent of U.S. oil use.
The fact of the matter is that market forces have caused a boom in the production of oil and natural gas (a substitute for oil in some uses). Further, the U.S. is at the center of that boom. And so, net petroleum imports now account for about 35 percent of U.S. consumption, as against 60 percent in 2005.
The authors also subscribe to the rope-a-dope theory: “OPEC can increase production and drive down gas prices, erasing market incentives for developing alternative fuels.” (p. xv). But if the rope-a-dope strategem ever worked, its power seems to be on the wane. Imported energy of all kinds accounted for 30 percent of U.S. energy consumption in 2005; imported energy of all kinds accounted for 22 percent of U.S. energy consumption in 2010. About one-third of that decrease is owed to an increase in the production of so-called renewable energy; the other two-thirds is owed to an increase in the domestic production of oil and natural gas. (Estimates derived from Statistical Abstract of the United States, 2012, Table 925. Energy Supply and Disposition by Type of Fuel.)
The point is that the rope-a-dope theory is not a sound one: American consumers and businesses benefit if and when foreign producers increase production and sell at prices that are (a) lower than domestic substitutes and (b) defer the high costs of developing those substitutes and bringing them into use. Further, American businesses — old and new — are constantly on the outlook for profitable opportunities. A pricing practice that is profitable for foreign producers — as it must be for them to persist in it for decades — is a pricing practice that invites American businesses to grab a share of the profits. And that is what is happening.
The authors’ obtuseness about economics, generally, and the role of markets, in particular, reflects their long immersion in the command-and-control world that is the military. I would hope that their long immersion in that world would enable them to evaluate a situation that could be addressed by military means, and to make a clear-headed assessment of the situation. But that is not what comes next.
4. A Missed Opportunity and Heroic Assumptions
There is a hint of what should have come next, but it is buried a short paragraph that follows the heart of the authors’ main argument for reducing the use of oil. Here is the anti-climactic statement:
The U.S. currently spends billions of dollars each year on military operations in the Persian Gulf region. Based on a literature review in CNA’s 2010 report, An Economic Impact Assessment of Maritime Oil Chokepoints, the average estimate of the annual military cost of protecting oil traffic in the Arabian Gulf was $74 billion . (pp. 4-5)
But there is no discussion of how that cost compares with the economic losses that would be averted by protecting oil traffic in the Arabian Gulf. Nor is there any mention of the costs of protecting other vulnerable areas, and the economic losses that would be averted by such protection.
Instead, the authors estimate the effects of one scenario and use the estimate to justify a 30-percent reduction in the use of oil by the U.S. Here is the graphic on which their case hinges:
Figure 1: The Impact of reduced oil consumption associated with a 30-day closure of the Strait of Hormuz.
The authors do not reproduce their calculations in the text or an appendix. And I am unable to reproduce their calculations because of imprecise references to the sources. This leaves me baffled by the non-linearity of the relationships shown in Figure 1. According to the authors, this is how the relationships were derived:
To illustrate the level to which reduced oil dependence makes our economy less sensitive to supply disruptions, we considered the impact of an oil supply shock on just one industrial sector that is heavily dependent on petroleum: the trucking transportation industry. The U.S. Department of Commerce, Bureau of Economic Analysis estimates the inputs for each industry that are required to deliver a dollar of industry output to final users . We used these input-output multipliers to determine the impact of reduced petroleum supplies caused by a temporary closure of a key maritime oil chokepoint. We considered 100 percent disruptions in the flow of oil, lasting 30 days…. (p. 3)
The multipliers of an input-output matrix imply a linear relationship between inputs and outputs. But how does one get from linear input-output relationships to the non-linear ones depicted in Figure 1? Do the authors assume that the U.S. can somehow be fenced off from a disruption in the flow of oil from the Middle East? (About one-third of the world’s oil is produced in countries that border the Persian Gulf and Arabian Sea. And according to the U.S. Energy Information Administration, oil “[f]lows through the Strait [of Hormuz] in 2009 are roughly 33 percent of all seaborne traded oil (40 percent in 2008), or 17 percent of oil traded worldwide.”)
But such an assumption would be wrong, as the authors acknowledge (p. xii): “When global prices spike upward, the domestic price also spikes—we don’t get ‘big-box store’ discounts just because of our nationality.” A disruption of Middle Eastern oil would not only affect the price of oil in the U.S. but also the quantity of oil consumed in the U.S. — unless the authors’ believe that demand for oil is perfectly inelastic and that the U.S. can simply continue to consume oil unabated while other nations stand by and watch.
The authors are right to fear the consequences of an “oil shock,” but do they believe that Iran would not think more than once about closing the Strait of Hormuz or taking some other war-like action against the U.S. and other nations? Or would they, as discussed above, simply leave the Middle East and its oil to the tender mercies of Iran or another opportunistic nation?
In any event, the authors could have found a better estimate of the effects of an oil shock simply by doing a bit of research on the internet. Lutz Kilian, an oft-cited professor of economics at the University of Michigan, which boasts a highly ranked economics department, according to several sources (e.g., this and this), has published many papers in the field of energy economics. One of Kilian’s papers is “Exogenous Oil Shocks: How Much Do They Matter for the U.S. Economy?” The paper
focuses on three key questions: How large are the exogenous fluctuations in the production of oil? To what extent do exogenous oil supply shocks explain changes in the price of oil? What are the dynamic effects of exogenous oil production shortfalls on U.S. real GDP growth and CPI inflation? (p. 1)
Drawing on the history of actual oil shocks back to the early 1970s, Kilian estimates the effect on GDP of a 10-percent reduction in the supply of the world’s oil for a calendar quarter. (That is roughly equivalent to the 30-day blockade of the Strait of Hormuz postulated in MAB4.) Killian says (p. 18) that his “estimates show a sharply negative growth rate [-1 to -4 percent] five quarters after the oil supply shock, before the response reverts back to zero [about 10 quarters after the shock].” (Emphasis added by me.) Further:
The upper panel of Figure 11 shows that adverse exogenous oil supply shocks lowered real GDP growth during several historical episodes including 1975, 1980, 1982, and 1991-92, although the magnitude of these effects tends to be small in most cases [never more than -1 percentage point, and never for more than a few quarters]. (p. 19)
[T]he abnormally low growth of 1974/75 was not caused by exogenous production cutbacks in the Middle East. The effect of these cutbacks on real growth was negligible. The impact of exogenous oil supply shocks was somewhat larger in mid 1980 and especially in early 1982. This does not mean that exogenous oil shocks caused the recession of 1982. First, recessions are defined relative to some measure of the business cycle…. [T]here is ample room for other explanations of the 1982 recession such as the monetary contraction initiated by Paul Volcker in 1979. (p. 20)
Here is the upper panel of Figure 11 (click to enlarge):
As for recessions, there have been many in the past 65 years, and a few of them have coincided with oil shocks:
Derived from a release by the U.S Department of Commerce’s Bureau of Economic Analysis: Current-Dollar and “Real” Gross Domestic Product (as of September 26, 2013). Recessions, for purposes of this graph, are periods of two or more consecutive quarters in which real GDP is below a pre-recession peak.
So much for the relatively minuscule effects of oil shocks. The far greater problem is the steadily declining rate of economic growth, which owes much to government interference in the economy — more of which is promoted by MAB4.
Nevertheless, to avoid the small effects of oil shocks, the authors of MAB4 would cut the U.S. loose from Middle Eastern oil, rely on more costly sources of energy (some of which are still in gestation), and force Americans to accept a lower standard of living.
Would those sacrifices make Americans safer? It seems unlikely. Power abhors a vacuum, and the authors of MAB4 are counseling the creation of a power vacuum in the Middle East. But perhaps they believe that the days of brutal regimes with expansionist ambitions are behind us.
B. Chapter 2 — Alternatives to Oil
Given what I have written thus far I am loath to waste space on the alternatives posited in MAB4. I will therefore restrict myself to a few observations:
- The discussion of nascent alternatives is permeated by the nirvana fallacy, which is the fallacy
of comparing actual things with unrealistic, idealized alternatives. It can also refer to the tendency to assume that there is a perfect solution to a particular problem. A closely related concept is the perfect solution fallacy.
- In fact, government sponsorship of alternative fuels is rife with failure. And, given government’s inflexibility and habit of preserving failed programs rather than killing them, there is no reason to expect a government-sponsored breakthrough. (See, for example, this, this, this, and this.)
- The specter of “climate change” hovers over the discussion (e.g., more than two dozen overt references to “climate,” “climate change,” or “warming”). This is not surprising given the MAB’s first emission: National Security and the Threat of Climate Change. “Climate change” means anthropogenic global warming, of course. The supposed “consensus” in favor of the AGW theory to the contrary notwithstanding, there is ample evidence that the theory is either bogus or wildly overstated. And the evidence continues to accrue (e.g., here).
- There are allusions to the dangers of “fracking.” Opposition to fracking, like support of the AGW theory, is emotion-laden — almost religious. It is telling that two former members of President Obama’s cabinet — Ken Salazar (Interior) and Steven Chu (Energy) — have come out in favor of fracking. (See also this.)
- Proposals to increase fuel efficiency — because “we can do it” — are myopic. All costs are relevant, not just fuel costs.
As pointed out earlier in this review, one of MAB4’s inadequacies is its failure to hold anything constant. The discussion of alternatives to oil is flawed in its particulars (as suggested by my short list) and flawed in general because there is no bottom line. What are the costs and benefits to taxpayers of fostering this or that alternative, and of reducing “dependence” on oil? MAB4 comes nowhere close to answering that crucial question.
Nor can Chapter 2 be held up as a source of new information about alternatives to oil. It is a rehash, a bit of window dressing. But its anti-market, collectivist thrust is undisguised; for example:
Of course, decisions about lifestyle must be left to individuals as they face their own tradeoffs and prices, but federal, state, and local policies can help shape those decisions. (p. 13)
In other words, decisions about “lifestyle” must not be left to individuals.
V. MAB4 VS. CNA’S STATED STANDARDS
Here are some excerpts of CNA’s self-description (quoted in section I.A of this review):
direct observation of events and people
analysts carefully observe all aspects of a process—people, decisions, actions, consequences
honest, accurate, usable research
By contrast, MAB4 is a patently political document, the purpose of which is to advocate a particular kind of “solution” to “dependence” on oil, not just oil from the Middle East. That so-called dependence is a “problem” mainly because it is an affront to environmentalists and believers in AGW. The national security rationale for a reduction in Americans’ use of oil lies somewhere on a scale between overstated and bogus. MAB4 amounts to a thin veneer of star-studded whitewash on an edifice of social engineering.
MAB4 is simply an extension of a campaign that began with the MAB’s first tome — National Security and the Threat of Climate Change — continued with the next two volumes — Powering America’s Defense: Energy and the Risks to National Security and Powering America’s Economy: Energy and Innovation at the Crossroads of National Security Challenges. — and led to MAB4 (the last of the series, one hopes).
And whence this thrust? Directly, from the officer of CNA who oversees the MAB, Sherri W. Goodman, and by implication, from CNA’s CEO, Robert J. Murray, and CNA’s Board of Trustees. (It is inconceivable that a high-profile operation such as the MAB could do what it does without, at least, the acquiescence of the CEO and Board.)
Ms. Goodman et al. have done things that would cause the leaders of CNA’s predecessor organizations to spin in their graves. It is those organizations — the Antisubmarine Warfare Operations Research Group (ASWORG, 1942-44), the Operations Research Group (ORG, 1944-45), and the Operations Evaluation Group (1945-62) — whose principles are given lip-service on CNA’s web site.
What are those things? There is the evident pursuit of a political agenda, under the guise of fostering “stability” and defeating “climate change.” (The latter is a preoccupation of the MAB’s several emissions; it seems to correlate with Ms. Goodman’s alarmism, about which see this.) Add to that the employment of former members of the armed sources and the reliance on the “military judgment,” as against empirical analysis.
In the days of ASWORG, ORG, and OEG, it was verboten to hire former military persons into analytical positions. There was, in the first place, a desire to avoid the appearance or reality of a conflict of interest; a former Navy officer, for example, might have been in a position to influence the ASWORG-ORG-OEG’s funding or access to information. More important, there was a reasonable doubt that a former military person could detach himself from prejudices that had arisen during his service (e.g., that certain tactics or weapon systems were too good to be tinkered with). There was proper respect for “military judgment,” but it belonged (and belongs) in the armed forces, and not in an organization whose mission is to render independent, empirical analysis of things military.
The last thing that the leaders of ASWORG-ORG-OEG would have tolerated is the issuance of opinions based on “experience,” whether that experience was civilian or military. But MAB4 is replete with appeals to the “experience” of its authors. Of the report’s 41 pages of “substance,” nine (headed “Voices of Experience”) are set aside for the opinions of various of the authors on sundry subjects. Another page (the first in the Executive Summary) prepares the reader for this onslaught of opinion; it is headed “Why Experience Matters.”
This is a blatant appeal to authority — to “expert opinion” — in areas that lie outside military expertise. On this point, I turn to Philip M. Morse and George E. Kimball. (Morse was a physicist who founded ASWORG and led ASWORG-ORG from the beginning and through the end of World War II. Kimball was a quantum chemist and member of ASWORG-ORG-OEG.) They published Methods of Operations Research in 1946 to document the analytical techniques that helped the U.S. Navy defeat enemy forces, and to impart lessons learned about the application of science to warfare. One of those lessons is about “expert opinion”:
The need for unbiased, impersonal facts, not opinions, must always be borne in mind; military personnel … tend to take the opposite opinion of the relative validity of opinion versus facts. One often hears the question, “Why do you need detailed action reports (or why should you witness this operation) when so-and-so can tell, you all about it?” If science has learned one thing in the past three centuries, it is that such a point of view must be avoided if valid scientific results are to be achieved. (p. 5)
To be valuable [operations research] must be toughened by the repeated impact of hard operational facts and pressing day-by-day demands, and its scale of values must be repeatedly tested in the acid of use. Otherwise it may be philosophy, but it is hardly science. (p. 10)
As I have tried to show in the preceding sections of this review, MAB4 is long on “philosophy” and very short on relevant facts.
Given the existence of the MAB and the nature of its products (as evidenced by MAB4), CNA ought to desist from (a) proclaiming its descent from ASWORG-ORG-OEG and (b) claiming a fervent devotion to objectivity.
VI. SUMMARY ASSESSMENT
I begin by noting the authors’ twin confusions about (1) the relationship of oil use to national security and (2) the objective of MAB4. The authors clearly want to advance national security, but their identification of national security with stability seems unduly narrow and tailored to the objective of reducing oil use, period.
Moreover, if national security were a paramount objective, the authors would not have leaped to the arbitrary “solution” of reducing U.S. oil use by 30 percent, with its potentially disastrous effects on national income and the ability of taxpayers to foot the bill for defense (among other things). The authors would have begun by estimating the costs of developing, bringing online, and using alternative energy sources — which would include the replacement and/or substantial modification of vehicles and equipment that now run on oil. Only then would they have been in a position to suggest that resulting deadweight loss to the economy might be worthwhile — if (a big if) it would compensated by a reduction in U.S. armed forces without endangering U.S. economic and strategic interests overseas. But the authors do not even contemplate a reduction in armed forces. What, then, is the point of the exercise?
The evident point is to reduce U.S. dependence on oil, and not just foreign oil. Now — unsurprisingly to anyone with real-world experience — foreign oil is being replaced by domestic oil and other other energy sources. This is happening not because of government edicts but because those particular alternatives have become competitive with foreign oil. In other words, MAB4’s superficial and inconclusive examination of alternatives to oil is superfluous. It is simply evidence of the authors’ belief that the “wisdom” of government in such matters surpasses the wisdom of markets. That belief is confirmed by the tone and thrust of Chapter 2 and the “Call to Action” that follows it. So much for the authors’ token bow to freedom of individual choice in economic matters.
I would remind the authors — and their sympathetic readers — that if you believe in the superior “wisdom” of government, you must be prepared to believe in it across the board. You cannot cherry-pick examples of apparently wise government policy and conclude that government can be counted on to improve on what would have happened if government had not acted. (And if government action seems better than inaction because government “does something,” you evidently do not care or think about the many unseen effects of government action. “If you like your insurance plan, you can keep it.” Not!) Nor does the sphere of government action matter; on the evidence of America’s wars from 1917 to the present, defense policy is not notably more sagacious than, say, economic policy.
In the end, MAB4 plays into the maladroit hands of government “technocrats” who
- have brought the U.S. economy to the verge of a European-style meltdown (see the last graph, above); and
- seem bent on moving U.S. defense policy toward European-style minimalism, without having first secured a U.S.-like defender against the next hostile power to arise.
In closing, I note that (to date) the MAB has not extruded a report since Ensuring America’s Freedom of Movement, for which the nation should be grateful.
* * *
Climatology (a term that I use to distinguish phony climate science from the real thing)
Global Warming: Realities and Benefits
Another Blow to Climatology?
Another Blow to Chicken-Little Science
Global Warming and Life
Remember the “Little Ice Age”?
Science’s Anti-Scientific Bent
More Bad News for Global-Warming Zealots
“Warmism”: The Myth of Anthropogenic Global Warming
More Evidence against Anthropogenic Global Warming
Yet More Evidence against Anthropogenic Global Warming
Modeling Is Not Science
Anthropogenic Global Warming Is Dead, Just Not Buried Yet
AGW: The Death Knell
Analysis for Government Decision-Making: Demi-Science, Hemi-Demi-Science, and Sophistry
The National Psyche and Foreign Wars
Delusions of Preparedness
A Grand Strategy for the United States
The Folly of Pacifism
Why We Should (and Should Not) Fight
Rating America’s Wars
Transnationalism and National Defense
The Folly of Pacifism, Again
The War on Terror, As It Should Have Been Fought
Preemptive War and Iran
Some Thoughts and Questions about Preemptive War
Defense as an Investment in Liberty and Prosperity