It costs about $50,000 a year for tuition alone these days at top schools like Harvard and Yale. Whatever all this money buys, teaching them to reason well isn’t on the list.
The iconic Harvard/Yale football game has been held every year since all the way back in 1875. Neither of these schools are known for their football programs, and they are instead held to be among the finest institutions academically in the world, but Saturday’s escapade causes us to wonder what they are teaching these kids, or rather, what they are not bothering to teach them.
The ability to think clearly and to question things is at the forefront of seeking to use our intellectual abilities well. Without this, while we might have a lot of knowledge, it will not be used properly because we require the ability to process and organize this knowledge in a coherent and effective manner.
This is a skill that we call reasoning and it is in short supply overall, even at universities this esteemed it appears. This should not surprise us as we are a race that relies far too much on emotions such as anger to guide our thinking, and anger carried the day at half time of Saturday’s Harvard/Yale game.
There are, of course, a lot of things that people could choose to protest, with long lines of people venting their anger about all sorts of things. When people are upset, thinking gets shelved, and this could even be said to be the bane of our species.
When we get upset like this, we turn our swords upon ourselves, and the only notable change that usually happens is our making ourselves even unhappier. That part will be successful without exception. This is not to say that we should not speak our minds, but when we get upset, this is evidence that the whole thing has gone way too far. Harming oneself intentionally is never rational, but you need enough presence of mind to tell, something that is in very short supply with a lot of people.
What stood out so much about this protest is that it wasn’t about climate change per se, it was about the two school’s investments, holding stock positions in oil and gas companies as well as holding Puerto Rican bonds.
This ends up taking things to a whole new level of ridiculousness, and although the protest itself has been well covered by the media, no one is pointing out how stupid this all is. The students don’t get it, the media doesn’t either, and it even seems that the schools don’t. If none of these groups gets it, who will?
It is true that the understanding of investments that the great majority of people hold is very limited, and most think that holding secondary investments like stocks and bonds has a material impact upon the world other than just determining who makes money and who does not from these investments. This is at the heart of this debate and we just aren’t allowed to rewrite reality by building straw men to attack for the sake of our personal sense of vindication.
As is always the case, seeking to understand involves asking questions and especially asking the right questions. This starts with asking ourselves how much sense the battle cry of “hey hey, ho ho, fossil fuels have to go” that dominating the chanting that went on during this ruckus might make.
Climate change protesters already live in a fairy tale world, but turning their guns on the endowment funds of Harvard and Yale take this tale to a whole new level of fantasy. The idea that we could simply get rid of fossil fuels right now is a big enough fantasy though, an enormous one in fact.
Be Careful What You Ask Your Genie in a Bottle For
If they had a genie in a bottle who was able to grant them this wish, where fossil fuels simply went away, they would need to think hard on this first before they made this request, but it seems that their anger and other emotions are preventing them from asking even the simplest questions.
The first one to ask is what would happen if this wish got granted. They would actually need a genie to do the dirty work with this because there’s no way that we would be willing to continue to maintain the view that fossil fuel has to go in the face of the tragedy that this would bring on.
Fossil fuels take care of the bulk of our energy needs, and getting rid of them would create an energy deficit so profound that it would without question produce a civilization ending event. There isn’t any way to replace these energy sources right now and we’re decades away from even coming up with an adequate replacement.
This fact is completely lost on those who bang their pitchforks for us to significantly reduce our consumption of fossil fuels. Getting rid of the use of fossil fuels altogether would cause the majority of the world’s population to lose access to the basic essentials of life such as food and shelter, and would either starve to death or succumb to the elements.
Many people live in warmer climates and could survive without heat during the winter, but everyone needs to eat. The world’s supply of food is greatly dependent upon fossil fuels, not only to distribute it but to even grow it, and we barely have enough to feed the world now.
Slashing it drastically would be bad enough, but that’s not the worst of it, as this would reduce our entire economy to rubble and result in anarchy, far beyond what policing could manage, and it may come down to who has the best weapons gets fed and gets to live, at least until someone takes it from them.
This would bring on philosopher Thomas Hobbes’ view of a world without morality, a life that is solitary, poor, nasty, brutish, and short. Oil turns out to involve an even more basic need, as without it, morality becomes a luxury supplanted by the will to survive, powerful enough to make Hobbes’ nightmare come true.
Whatever your view of what climate change will cause, it is a play date in the park compared to what eliminating the use of fossil fuels would cause. We would think that no one in their right mind would even contemplate such a thing, but this apparently is pretty easy if you just focus all of your attention on this alleged attempt to save the planet and somehow miss the global holocaust that we would get back in the bargain.
The good news is that we’d never have the will to approach this, and this is way beyond what any serious debater on that side would even propose, as they would at least account for the practical cost of their fighting their battle and realize that there are real limitations to this. The very fact that anyone, even this drum beating rabble, would even let such a phrase as fossil fuels have to go pass their lips requires that these utterances formulate in their guts, bypass their brains, and go straight to their mouths.
If this disease has spread so widely that it has infected all these Ivy League college students, who are considered among the leaders of tomorrow, that should really scare us.
The more reasonable of the bunch are only calling for drastic cuts, and this is where things get more interesting actually from an economics perspective. It’s not that their ideas are even close to being practical or acceptable, and even the minimums that are proposed to make a difference in the fight against global warming would cause a big energy deficit.
While the economy overall would be severely harmed by this, we don’t even have to view this on a macro level, as the micro level should sufficiently startle us to make the need to reconsider this quite plain.
The way things work is that when you reduce the supply of something, the price goes up, and when you reduce it a lot, the price of things go up a lot. This is way beyond just limiting your driving to what is necessary, it will end up pricing a lot of people out of energy period. If there is less around, money will do the talking, and those who don’t have enough will get outbid and suffer some very drastic consequences indeed.
Energy prices affect the price of everything, and with a lot less fossil fuels available, economic production overall will decline. This will put prices up a lot, and if you can’t afford to get to work, to heat your home, and to put food on the table anymore, you will do without. These are not things that we can afford to see people do without.
This would put some very sharp teeth on the level of wealth inequality we have today, where those less well-off just don’t have to do without the finer things in life, they may no longer be able to afford what they need to live if we take this far enough. The climate change set wishes to take it this far or farther because they have only looked at things like sea levels and have missed all the people who will drown economically from their preferences being put into action.
The macro effects are also well worth mentioning, and as we dial down our economy further and further into depression, this will add a lot to the pain and suffering and also limit the ability of governments to provide a safety net or take action to stimulate an economy that has run out of gas and sits on the side of the road shivering and dying.
It is truly ironic that these kids are not only protesting their school’s holding shares in companies that produce fossil fuels, they are also angry that they are also holding Puerto Rican bonds, and feel that their school should even forgive these bonds so that Puerto Rico can recover from their energy crisis more quickly.
Puerto Rico gets virtually all of its energy from fossil fuels, whether that be the electrical grid that ended up getting decimated by a hurricane to all other forms of energy. We are getting a taste of how important the burning of fossil fuels actually is, but on the one hand the kids want to stop it, and on the other they want to encourage it.
People protest against fossil fuels quite often and also call for an end to its use, so if that’s all this was about, this one-hour occupation of a football field during a game would hardly be noteworthy, unless you were a fan of the game. What makes this stand out is that these investments have absolutely nothing to do with either climate change, fossil fuel usage, or the fate of the Puerto Rican people or their infrastructure.
Sticks and Stones Can Break Bones, Stocks and Bonds Just Cannot
We’re now up to three fields of study that these students at least need remediation in, critical reasoning, basic economics, and the nature of investments. The investment lesson consists of differentiating between primary and secondary investment.
Primary investment puts capital to work and promotes the entity invested in to achieve its business goals, and venture capital is an example of this. Secondary investments aren’t even investments as understood by economists, as they do not invest in anything exogenously and are merely financial instruments traded among people and institutions.
If Harvard and Yale own stock in oil companies, or if they did not buy it or if they sell it to someone else, this has absolutely no bearing on the oil companies and the only possible effect of any of this is the financial standing of those holding the stock changing over time, where they may earn profits or suffer losses depending on how the price of their stock moves.
Holding bonds works the same way, and the bonds are due to someone, and it does not matter at all who is holding them. Puerto Rico has borrowed money like all governments do, and they need to pay it back to whomever is holding the debt or default, be it Harvard, an insurance company, a mutual fund, an investment bank, a pension fund, a hedge fund, a wealthy investor, or any other participant.
These fuels are also sold on demand, and it’s only because that the demand is there that production occurs, in accordance with it. Harvard and Yale owning the stocks does not cause either the supply or demand of fossil fuels change one iota, nor does it help or hurt Puerto Rico in any way if they hold their bonds.
You can’t own a portion of a bond issue and just give it back either, although you could sell them to someone else and donate the money. This is not why the schools’ endowment funds invested in them though and they simply won’t be giving the money back, and to think there would be any chance of this happening is indeed the stuff of pure fantasy.
These schools already have donated to the relief effort of Puerto Rico and if they wish to donate more, they will, but to accuse them of either promoting carbon emissions or in any way harming Puerto Rico or its population is just ludicrous.
It is nothing less than amazing just how technologically advanced we have become while being so prone to the clutches of stupidity when it comes to the ability to reason practically and effectively. The students of Harvard and Yale, at least the ones that were willing to embarrass themselves and their schools by engaging in this foolish behavior, speak loudly to this lack of ability.
We may also wonder about the schools themselves, as we would think that such a ridiculous attack would be met with a better explanation than they respect freedom of expression but this was not an appropriate forum for its expression. They have enough money to hire the best PR people out there but they don’t seem to feel the need or even recognize it, and perhaps they are so confused as well about this that they feel some shame here, which would truly be shameful.
A more appropriate response would be something like telling us that the only purpose and effect of these investments is to seek to grow their endowments, which the schools use for the betterment of the world. Their choice of investments in secondary markets cannot possibly have any material effect on any business or government, and are by nature morally neutral and cannot be criticized on these grounds without being patently confused.
On the other hand, any calls that limit the financial standing of the school does have actual consequences, where this may place a burden on their ability to do their good work. They are disappointed that their students lack any real understanding of the facts and encourage them to go out and learn more about these issues that they are so concerned about and come to better appreciate how unfounded their present opinions actually are.
There is the opportunity for a valuable lesson to be learned from all this, if only someone would teach it.