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New Bottom Line Volume 10.1 – Cheney's Energy Policy… More or Less

Thursday, May 3, 2001

I didn’t expect to agree with Vice President Cheney on energy policy. Differences of philosophy, politics and vested economic interest separate us. But one surprising turn of phrase in his recent Toronto speech (April 30 2001) troubled me more than the policy pronouncements, which were of course anything but surprising.

Others will do a fine job of challenging the accuracy of Mr. Cheney’s history and projections of energy demand. I keep tripping over one small but pivotal phrase in his Toronto speech. As the NY Times reported, he said “he would oppose any measure based on the premise that… people should ‘do more with less’.”

What is he actually proposing? That we do “less with more?” I can’t think of any another CEO (or any local grocer) who runs their business that way. “Hey, I’ve got a great idea. Let’s spend more money on expenses, produce less product and make less money.”

On the contrary, leading companies worldwide are driving forcefully in the direction of more with less: wringing more product from a smaller capital plant, more market share from a smaller workforce, and yes, more profit from a smaller energy bill. The history of the 20th century is a history of what Buckminster Fuller called “More with Less-ing.” Without business’ commitment to “more with less” we wouldn’t have transistors, microprocessors, the high tech industry, or the six pound computer on which I’m writing this article. No carbon composites, no Gore-Tex. No CDs, no MP3s. No fiber optics, no wireless telecomm. No lean manufacturing, no high performing companies.

Cheney seems to have elected himself the leader of Los Entropistas — those committed to maximizing the flow of physical resources through the economy. George Carlin wasn’t the only wizard of “stuff.” Stuff is the key to globalization, the common currency of GATT, NAFTA, WTO, the late and unlamented MFA. All these initiatives have as their central purpose the removal of any and all barriers to the maximum throughput of stuff.

What’s wrong with that approach? Two things.

First, we don’t live for stuff, but for what the stuff brings us. Am I impoverished by a smaller, less expensive, more powerful computer? No; more with less. Am I despondent because my larger music collection takes up less shelf space, and is about to disappear onto my hard drive? No; more with less. Do I suffer because my energy bill is lower than five years ago — yes, even in California — even though my home is comfortable, my food fresh, my showers hot? No; more with less.

Second, the inevitable consequences. The Second Law of Thermodynamics makes it inescapably clear that whenever we prospect, extract, refine, manufacture, ship, use, dispose of — and even recycle — “stuff” of any kind, we inevitably generate entropy — disorder — and environmental degradation. Back in the 20th century we considered that a necessary evil, the price we pay for economic well being. Here in the 21st century, business leaders as diverse as William C Ford Jr of Ford Motor Company, Pasquale Pistorio of ST MicroElectronics, Charles Holliday of Dupont, and many others know better, and are re-engineering their companies to make more money from less resources with reduced environmental impact.

Why? Because they recognize that the human economy is a wholly owned subsidiary of the living environment, in the words of economist Herman Daly, not the other way around. And that the natural environment provides goods and services to the human economy with an economic value estimated at some $33 trillion — larger than the total global economic product. And — because they can make more money.

So why does Mr. Cheney reject “more with less,” when it’s clearly an elemental engine of innovation? It’s a matter of less of what, less for whom. If less means less petroleum, that’s fine for Ford, ST Micro, and Dupont, but it’s not fine for this Administration’s primary constituency in the fossil fuel industry. US industry would do better, the US economy would do better, but the oil industry might do worse. That seems to be what’s unacceptable to Mr. Cheney.

(Interestingly, it’s not unacceptable to the entire fossil fuel industry. Shell and British Petroleum have charted corporate strategies that move their companies away from dependence on fossil fuel products; Shell in fact proposes to be the worldwide leader in the forthcoming hydrogen economy. These are neither philanthropic decisions, nor ideological decisions; these are business decisions.)

To his credit, Mr. Cheney made more sense than most media accounts reported; you’d never know, from press coverage, that he outlined a three point policy agenda including expanded supply, good stewardship and efficient use. But unless he drops the archaic notion that “more with less” means “austerity,” when in fact it means prosperity, US industry and the US economy will leave profits on the table — something none of us can afford.

(c) 2001 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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