by Matt Ridley
August 12, 2016
On Monday (8/08), British Prime Minister Theresa May announced what is being called the “Frackpot” – to redirect some of the future profits of shale gas production to households, rather than councils.
[Note that in the UK and most countries, unlike the US, the government owns the mineral rights under a landowner’s land. Note also that – surprise – British environmentalists are denouncing May’s policy as a “bribe.” – Editor]
This is eminently sensible. It gives local people a stake in the new technology; it recognizes that innovation will be accepted in society when its social effects are beneficial; and it reflects May’s philosophy that all of society should share in growth.
After leaving the European Union, Britain will have to be quicker to adopt new technologies, the better to create wealth in the knowledge economy. For me that’s the biggest opportunity of Brexit.
But to grasp it we must find a way to persuade people to be more ready to embrace innovation and less suspicious. A country that can work out how to do that is going to steal a march on its rivals.
Innovation is the source of virtually all prosperity. It is the reason the average person now lives longer, feeds better, travels farther, is better entertained and sees more children survive than even a monarch did four centuries ago. A glance back through history shows that innovation nearly always does more good than harm.
So why is innovation so fiercely resisted? Opposition to “fracking” (the novelty is not hydraulic fracturing, which has been happening for decades in Dorset, but shale gas extraction; the opponents like using a word with f and k in it) is largely irrational.
Like the 19th century claim that the Liverpool to Manchester railway would cause horses to abort their foals, it is based on myth, flying in the face of the evidence that shale gas can provide energy more cleanly than coal, more cheaply than nuclear and more reliably than wind.
Yet the opponents, backed by the giant budgets and PR machines of the big environmental pressure groups, have poisoned shale gas’s reputation here already.
This is nothing new. “When a new invention is first propounded,” said William Petty in 1679, “in the beginning every man objects and the poor inventor runs the gauntloop of all petulant wits.”
In the 16th and 17th century, coffee was repeatedly outlawed by religious and political leaders in Cairo, Istanbul and parts of Europe as it spread north from Ethiopia and Yemen. Their objection was ostensibly to its “intoxicating” qualities or on some spurious religious ground, but the real motivation was usually to ban coffee-houses’ alarming tendency to encourage the free exchange of ideas.
King Charles II sought to close down all coffee houses explicitly because he did not like people sitting “half the day” in them “insinuating into the ears of people a prejudice against” rulers. He’d have hated Starbucks.
Margarine, invented in France in 1869, was subjected to a decades-long smear campaign from the American dairy industry. “There never was . . . a more deliberate and outrageous swindle than this bogus butter business,” thundered the New York dairy commission. Even Mark Twain denounced margarine, showing that celebs have been anti-progress before.
Laws were passed in many states to cripple the margarine industry with bans, taxes, labeling laws and licensing provisions. By the early 1940s, two thirds of states had banned yellow margarine altogether on spurious health grounds. This is reminiscent of today’s reaction to the invention of vaping: banned in some countries, such as Brazil and the United Arab Emirates, discouraged in most others.
The Horse Association of America once fought a furious rearguard action against tractors. The American musicians’ union managed to ban all recorded music on the radio for a while. Like the initially successful opposition to railways from the canal owners in Britain a century before, incumbent industries will do their utmost to stop new challengers.
Another lesson is taught by the Islamic world’s rejection of printing for four centuries, in contrast to China and Europe.
Professor Juma thinks part of the reason printing quickly caught on in Europe — and sparked the Reformation — is that European scribes, being monks, did not lose their livelihoods as the freelance calligraphers of Istanbul risked doing. Religious objections also contributed.
Bizarrely, the Ottoman Empire allowed foreigners to set up printing presses using foreign languages and scripts but when a Hungarian convert, Ibrahim Muteferrika, was permitted by the sultan to set up a press in Istanbul in 1726 to print only non-religious books there were riots.
This shows that it is not the technology but the social environment around it that determines whether it will be accepted. Europe’s implacable and irrational resistance to genetically modified crops, in contrast to the relatively speedy adoption of that technology in the United States, supplies much the same lesson.
Bombarded by green propaganda, European consumers largely saw genetic technologies as a threat, rather than an opportunity. Genetically modified bacteria, making insulin for diabetics, encountered no such opposition.
Nor did mobile phones, introduced around the same time and rather more quickly adopted in Europe than in America, despite the best efforts of campaigners to worry us about the effect of radio waves on our brains, or of social media on our social lives.
So it is not a given that Europe need be a slower adopter of new technology than America. Shale gas and Uber appear to be heading down a path similar to GM crops: quickly adopted in most of America, but treated with Luddite suspicion in Europe.
Professor Juma argues that “time and again policymakers are taken by surprise when technological controversies emerge.” Yet they are horribly predictable. If we are to have an industrial policy, please can it be focused on this problem?
It needs to spot the disruptive innovations that are going to bring huge benefits to many but will be opposed by a vociferous few. Driverless cars, for instance, or gene editing, vaping and small-modular nuclear reactors.
The strategists then need to work out how to get everybody to feel they have a stake in the new. And to tell the people who try to make a living out of scaring us without good cause to get lost.
This could be an early agenda item for George Freeman, the former minister of life sciences, now running the prime minister’s policy unit in No 10, who knows this issue well.