Learning from the Simpsons
Thursday marks the 25th anniversary of the original airing of The Simpsons’ season six finale, part one of “Who Shot Mr. Burns?” ( Spoiler alert! As revealed in part two, it was Maggie, the Simpson baby). Newsweek ranked part one as the fourth- best all- time among nearly 700 Simpsons episodes aired to date. It’s almost certainly the most economically instructive.
In the episode, Mr. Burns, the town of Springfield’s monopoly energy provider, complains that his “greatest nemesis still provides our customers with free light, heat and energy.” Emulating 19th- century French economist Frédéric Bastiat’s famous candle manufacturers, Mr. Burns builds a giant contraption to block out the sun and pump up demand for locally produced energy. “Imagine it, Smithers,” he tells his assistant triumphantly, “electrical lights and heaters running all day long!”
But while restricting consumer access to free light and heat — or to cheaper goods and services of any kind — enriches the local producer, it impoverishes society as a whole. Springfield residents are naturally outraged by Mr. Burns’ plan. Even his sycophantic assistant Smithers calls the project “unconscionably fiendish” and urges Mr. Burns to “step back from the brink of insanity” — to which Mr. Burns replies, “I’ll do no such thing!”
Today, as politicians and activists plan to benefit certain sectors by artificially raising energy prices and imposing protectionist measures that harm consumers and taxpayers, we should, like the residents of Springfield, protest and get them to step back from the brink of insanity.
One of the most obvious manifestations of economic insanity currently on display is the proposed use of the current economic crisis as a jumping- off spot to launch a more socialist economy and a Green New Deal, as suggested in the past several months by, among others, Leap Manifesto co- founder Avi Lewis in the Globe and Mail and lefty Toronto councillor Mike Layton in the Toronto Star.
“While we need to restart the economy quickly, we must steer the ship in the right direction,” urges Layton, as if he is our ship’s captain and we, his fellow Canadians, mere passengers and deckhands whose jobs and lives need to be “steered” in the direction of his choosing.
Predictably, the “right” direction is in fact hard- toport, as he prescribes more government control over energy consumption and “investment, like never before, into a transportation system that gets people out of their cars and using public transit, while we electrify our vehicles.”
“This is our opportunity,” Layton writes, “to chart a new course, a transformative path” to a lower-carbon, more government-controlled economy. But Canadian governments at all levels are now staring down combined deficits of over $300 billion, while rock-bottom oil prices mean forgoing fossil fuels is more expensive than ever. It is not clear, therefore, how the current moment is an “opportunity” for a Green New Deal. It is in fact possibly the worst possible time for an “unconscionably fiendish” plan to deny Canadians access to affordable energy. Exacerbating the current crisis with higher taxes and more government control is economic madness.
Unfortunately, unlike the Springfield energy market, there is no monopoly on bad economics. While those on the left clamour for a Green New Deal, there are calls from all across the political spectrum for an industrial policy, which is a euphemism for a central planning regime that protects established local producers from competition at the expense of everybody else — consumers, foreign producers, and the domestic producers of tomorrow who do not yet exist.
Industrial policy is being promoted not only by reliably protectionist voices on the left, such the Toronto Star and the Broadbent Institute, but also conservative voices, including some in our own “Shockproofing Canada” series, who have advocated, among other things, a government-engineered repatriation of medical equipment manufacturing and an outright ban on oil imports.
The Ottawa- based Public Policy Forum last month released a 55- page paper making the case for a “mix of policy interventions and levers” that would “cultivate domestic firms and technologies” and “promote specific economic sectors.” The paper purports to oppose rent- seeking and protectionism but its recommendation of politically- guided economic development would surely entrench such things if implemented. The purpose of the economic system is not to benefit politically favoured industries but to serve the interests of consumers. As Springfield residents well know, artificially inflated prices and protectionism may well enrich certain domestic producers but, by oppressing consumers, are ultimately harmful.
Of course, the parallels between The Simpsons and reality are not exact. The cartoonish antics of Mr. Burns bring amusement and delight to television viewers. By contrast, in real life, the interventionist agendas of politicians and activists bring frustration and impoverishment to taxpayers and consumers.