British prime minister Boris Johnson announced this week that he would make it illegal to sell petrol or diesel-driven automobiles from 2030, pushing the British into a fleet of electric cars. He proclaimed this would lead to a “green industrial revolution.” Fat chance! If Boris had been around in the 1780s, he would have had equally good “environmental” reasons for banning steam engines – and would thereby have snuffed out the real Industrial Revolution.
Imagine that Boris had been elected prime minister at the end of 1783, instead of William Pitt the younger. He would have been fat and middle aged like Lord North, have had a love-life rather like that of Charles James Fox, and would have been an Old Etonian, like North and Fox but not Pitt. In other words, he would have fitted like a glove into the Fox-North coalition, and would perhaps through his affable charm have emerged in the December 1783 crisis as a compromise candidate for the premiership, less personally obnoxious to George III than Fox.
Now imagine a newly installed 1784-Boris, keenly environmentalist as he is (or as his fiancée Carrie Symonds is) examining the state of the country in early 1784. The population is ravaged by epidemics of smallpox and plague – better have a lockdown. Unemployment is high and the economy is depressed – time for a stimulus program. The National Debt is dangerously high – time for some QE, reducing interest rates to zero and forcing the Bank of England to buy Consols. Sinking Fund – what’s that?
Britain’s most important problem, to an environmentalist 1784-Boris, is the sudden rise in the numbers of heavily polluting, noisy steam engines. Vast swathes of the countryside are being desecrated by the things. From a humble but modest role in pumping water out of mines, which they have had for 70 years (and few of 1784-Boris’s friends spend time in mining districts) they appear to be proliferating all over the place, in both towns and the countryside, with London especially blighted by their appalling dirt and smoke. Surely government can do something to regulate these menaces!
There is a further problem with steam engines, also. 1784-Boris’s climate scientists have calculated that global temperatures in the preceding 200 years have declined by about 1 degree on the new temperature scale pioneered by the Swedish scientist Anders Celsius. Londoners have taken to holding “frost fairs” on the frozen Thames every few years, but the first such fair was held only in 1608. Climate scientists have also theorized that the cooling effect of the sulphates released from coal fires and coal-burning steam engines are causing the problem. After all, widespread use of coal in domestic heating started quite suddenly in the second half of the 16th century and has spread ever more widely since; it makes sense to assume that the two developments were closely related, and the experts’ knowledge of sulphate chemistry has suggested a mechanism for such a relationship.
To 1784-Boris, there is too close a fit between the two timescales to be a coincidence. Global cooling, or “climate change” as he prefers to call it, is a menace that could wipe out civilization if it continued. On present trends, if coal usage continued to increase, global temperatures would drop another 4 degrees Celsius by 2000, which would be enough to destroy British agriculture and starve the rapidly growing British population. For Boris, the only solution is sharp restriction on coal burning, limiting domestic use of coal and banning dangerous new applications such as steam engines. The new-fangled economist Adam Smith has suggested a “sulphur tax” to reduce the use of sulphur-emitting coal, but Boris believes it is much more effective for the government to issue decrees than to rely on a complicated and inefficient “free market” to achieve necessary social goals.
1784-Boris is confident that even though the use of steam engines is growing, they are no more than peripheral to the British economy. The Dutch have developed windmill technology to a high level, using them to pump water out of mines. This could be done in Britain; the intermittent nature of wind power is not a problem, since if water accumulates, it can be pumped out when the next windy day occurs. Water-mill power also is used in the newly growing textile industry and seems perfectly satisfactory. Yes, Boulton and Watt are selling a few steam engines to that industry, but their engines appear to have only modest advantages over water-mill power, and they are far more difficult and indeed dangerous to work with. 1784-Boris has heard that James Watt is working on a steam engine with a condenser, which would be more efficient, and has patented some new ideas, but so far the advantages of steam engines are pretty marginal. Thus, the costs of a ban on steam engines are modest, while the environmental benefits are of great importance. All 1784-Boris’s friends, whose London town houses and country estates are made filthy and noisy by the new devices, will thank him for this new decree.
1784-Boris’s new regulation is relatively easy to enforce. There are only a few factories making steam engines, which can be forced to close, and the engines themselves are so noisy they can be heard half a mile away. The mines will adapt, though mines that have been using Newcomen engines since 1710 or so have a justified case for compensation, and some flood-prone workings will have to be abandoned. The textile business can easily continue with water-mill power, although its growth will be steady rather than spectacular.
In our timeline Britain eventually won the Napoleonic Wars, through its strong and growing economy, which brought tax and borrowing capacity that after 1809 was harnessed against French military power by Liverpool and Wellington. In the Boris-1784 timeline, Britain with its more sluggish economy would probably have lost that war. Win or lose, in the post-war depression the burdens of Britain’s debt would have become intolerable on an economy with no steam and little innovation. At that point economic collapse would have occurred and just as in Ireland thirty years later, starvation would have faced the rapidly increasing population, as Thomas Malthus predicted. The sufferers from the repeated famines of the 19th century, as British economic power went into decline, would never have known about the railways and steamships they would have lacked, because 1784-Boris halted the development of their motive power.
What this fable demonstrates is that the Industrial Revolution was by no means inevitable and would have been derailed by policies that were anything like Boris Johnson or other politicians pursue today. It took two centuries of remarkably good British economic policy to produce the Industrial Revolution, and 21st century economic policies would have prevented it. The “command and control” approach to economic policy, beloved of Gosplan bureaucrats, can destroy innovations and positive developments that the bureaucrat, cocooned in his Moscow dacha, knows nothing about.
If Boris Johnson wants to combat climate change, he should impose a carbon tax, like the “sulphates tax” that Adam Smith recommended to 1784-Boris in the myth above. With Smith’s sulphates tax, steam engine progress would have been retarded, but once truly superior steam engines appeared with James Watt’s condenser and high-pressure boilers, they would have overcome the economic hurdle of any plausible sulphates tax and would have produced the Industrial Revolution, if a few years behind schedule.
By forcing the adoption of electric cars rather than imposing a carbon tax, Boris Johnson is today substituting government fiat for a market mechanism, putting an absolute bar on some directions in which innovation might appear. Whether or not a particular social objective is sensible, regulation is always the most damaging way of attaining it. Far from causing a “Green Industrial Revolution” Boris Johnson may well be preventing a new Industrial Revolution from appearing, whether green or any other color.
(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)