“Why do some societies make disastrous decisions?”
January 4th, 2007
Opinion, Politics
Comments on the Council on Foreign Relation’s recent report entitled National Security Consequences of U.S. Oil Dependency.
“Why do some societies make disastrous decisions?”
This is the title of Chapter 14 in Jared Diamond’s “Collapse”. It is worth reading. Early in the chapter he notes a
“baffling phenomenon: namely, failures of group decision-making on the part of whole societies or other groups. The problem of course is related to the problem of failures of individual decision-making. Individuals, too, make bad decisions; they enter bad marriages, they make bad investments and career choices, their business fail, and so on. But some additional factors enter into failures of group decision-making, such as conflicts of interest among members of the group and group dynamics.”JD420
Diamond outlines a “road map” of factors that contribute to failures of group decision-making.
“First of all, a group may fail to anticipate a problem before the problem actually arrives. Second, when the problem does arrive, the group may fail to perceive it. Then, after they perceive it, they may fail even to try to solve it. Finally, they may try to solve it but may not succeed.” JD421
The salient analysis of group decision making by Jared Diamond aptly applies to the Council on Foreign Relation’s recent report entitled National Security Consequences of U.S. Oil Dependency. The report is hailed by some observers as a positive indication that the “group” (in this case U.S. “policy” makers) has indeed perceived the energy problem; a wholly unwarranted bit of optimism. By challenging the assumptions in a careful reading of this document, one is inevitably lead to the conclusion that committee’s perspective is highly skewed. On the face of it, addressing energy problems from a “foreign policy” view point, particularly with respect to “dependency”, is a convoluted approach.
Let’s look at, and challenge some the the “assumptions” the report grounds itself with in the Overview and Introduction:
The challenge over the next several decades is to manage the consequences of unavoidable dependence on oil and gas that is traded in world markets and to begin the transition to an economy that relies less on petroleum. The longer the delay, the greater will be the subsequent trauma. For the United States, with 4.6 percent of the world’s population using 25 percent of the world’s oil, the transition could be especially disruptive.
This statement rings true (sounds good?), but establishes an assumption that may or may not be valid: unavoidable dependence. Dependence may be unavoidable but the magnitude of the dependence is not addressed. It is the magnitude of that dependence which will determine the economic transition to less reliance on petroleum. It continues:
During this next twenty years (and quite probably beyond), it is infeasible to eliminate the nation’s dependence on foreign energy sources. The voices that espouse ‘‘energy independence’’ are doing the nation a disservice by focusing on a goal that is unachievable over the foreseeable future and that encourages the adoption of inefficient and counterproductive policies.
What is the underlying assumption of “energy independence” doing a national disservice? If it is the idea of energy “self sufficiency”, I agree. But if it the management of core values that drive political and economic consensus make energy efficiency a national priority and can actually reduce consumption (not just reduce the rate of growth in consumption) we can in effect become energy independent. We may require going to the world market for some significant part of our petroleum needs, but if our economy is not critically dependent on those petroleum needs, we are energy independent. The real question, not addressed, is critical dependency.
Here is another interesting assumption to consider: who exactly was this report written for? If for the “consumption” of the general public, these guys certainly missed by a mile. If for the political leaders who should be taking heed of these issues, (the “implementers”) here’s what the report has to say:
Leaders of both political parties, especially when seeking public office, seem unable to resist announcing unrealistic goals that are transparent efforts to gain popularity rather than inform the public of the challenges the United States must overcome. Moreover, the political system of the United States has so far proved unable to sustain the policies that would be needed to manage dependence on imported fuels.p5
…the U.S. government is not well organized to address the threats to national security created by energy dependence. p10
Greater awareness of energy issues will make some improvement, but that is not enough. Organizational change is needed. But, it is not clear which specific organizational remedies will accomplish the objective of achieving greater attention and integration of energy issues in the policy process. Ultimately, success depends on the priority that the president and the cabinet place on energy in future administrations. The Task Force offers a number of measures that if adopted would contribute to a process more likely to give energy issues their required attention. First, a directorate for energy should be established at the National Security Council—p57
The root of the organizational problem lies in the range of considerations that go into a comprehensive energy policy—economic performance; foreign policy; security; environmental impact at local, regional, national, and global scales; balance of foreign trade and investment; industrial competitiveness; fiscal and tax policy; RD&D policy and expenditures; land-use and natural resource management; and others.p58
There is no entity within the executive office of the president that is ideal for managing this process. P58 (to which I have to say “no shit!” (State of Denial)
To summarize then, this report basically says: OK. Energy looks like it is getting to be a major problem, especially with respect to foreign policy. But hey, that’s not likely to change a whole lot so how to we live with that? Well, let’s figure out how to keep as much of that foreign oil flowing or else all hell will break loose. That’s central to our “foreign policy issues” but we have to deny that and minimize it as a core consideration. Hell, we’ll never run out of the stuff, its just going to get more and more expensive, and a good deal of that expense will be in “securing” that stuff, and implementing foreign policy accordingly – at least for the next 20 years and then we’ll see what happens. Oh by the way, we need to throw some palliatives to the masses, like encouraging conservation, suggesting SUV’s might have been a bad idea, and encouraging switching our agriculture from food to ethanol fuel. As to whose going to oversee this “recommendation”, well it probably shouldn’t be business as usual, since they have demonstrated ineptitude – but really, what other options do we have?
Here’s another assumption:
So while the world will not soon ‘‘run out of oil,’’ these new supplies are almost surely going to be more difficult and expensive to produce than in the past. Production from existing fields is declining, on average, about 5 percent per year (roughly 4.3 million barrels per day), and thus even sustaining current levels of consumption requires an enormous effort.p22
This is another irrefutable statement of fact. The world will not soon run out of oil. It will never run out of oil. Procuring petroleum from a fixed supply is a process of diminishing returns. Procuring oil requires an input of energy that grows as the procurement process becomes more difficult – until such point that it no longer makes sense to procure the oil. While we will not have run out of it, it is unavailable to us. If this isn’t obvious to you, here’s another entertaining way to understand the problem: Draw a line twice your longest stride, say 6 feet. Then, take a step half that distance, followed by another step that is half the remaining distance to the line. Then take another, and another, and another… So, how long will it take you to reach your line? The answer of course is you never will.
This report does have something for everybody to feel good about – the palliatives I mentioned earlier. For example, its strong support for encouraging significant investment into alternative energy resources and conservation measures.p7 Such policy papers are dangerous for just this reason: you can pick and chose the authority in it to support any particular position. Maybe that’s what I am doing here.
But I think the central tenet of the policy report can be found on page 29 and for me, this statement makes it clear that this group has failed to perceive the problem:
U.S. strategic interests in reliable oil supplies from the Persian Gulf are not proportional with the percent of oil consumption that is imported by the United States from the region. Until very low levels of dependence are reached, the United States and all other consumers of oil will depend on the Persian Gulf. Such low levels will certainly not be reached during the twenty-year time frame of this study. Even if the Persian Gulf did not have the bulk of the world’s readily available oil reserves, there would be reasons to maintain a substantial military capability in the region. The activities of Iran today and Iraq, especially prior to 1991, underline the seriousness of threats from weapons of mass destruction. Combating terrorism also requires a presence in the Gulf. In addition to military activities, a U.S. presence in the region can help to improve political stability.
There are a number of discordant statements made within this report. It can become a game to point them out. Therein lies its greatest fault and one that plays to Jared Diamond’s concerns about group decisions. We can be awed by the expertise brought by the panel to this report, but we can also be aware that it is this same “expertise” that leads to “rational” decisions – those decisions which may not benefit anyone at all in the long run.
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