Nationalize coal

A simple case for socialism in the interests of the public, the owners and the miners.

The argument is straightforward.

1. Coal must go to save the climate. (Carbon sequestration in power plants is still only experimental, it’s very expensive, can only be fitted to new plants, if there are any, and doesn’t deal with the methane emitted during mining.  A very long shot.)

Kingsnorth coal power station on the Thames estuary. Credit

2. The social costs of ending an entire industry will be high, as coal-mining communities are poor and isolated.

3. The new plan being floated in Washington for cap-and-trade limited to electric utilities just fixes a date for the death sentence on coal.

4. Under a scheme like this, the industry would have a moral and perhaps a legal case that it is the victim of discrimination and the object of an uncompensated “taking”. This would not arise under a comprehensive cap-and-trade régime; but the whole argument for a selective scheme is that there are “low-hanging fruit” in electricity – meaning old coal power stations, that can be cheaply replaced with much more efficient gas (>50% against 33% thermal).

5. The case is easily distinguishable from the onerous regulations or taxes directed at say tobacco, alcohol, firearms and explosives, which create specific risks. Coal emits carbon dioxide, but then so do many other industries and activities. Cap-and-trade isn’t aimed at particulates.

6. The odious and reckless management style of Don Blankenship’s Massey Energy makes more sense if you see it as a response to the expected death of the industry. Without a secure future, take the money and run. Oil and gas are different: as they run out, prices and revenues will get higher. Coal won’t run out before it’s killed off or kills us. The mismanagement will get worse as the industry’s expiry nears.

7. So: nationalization with proper compensation would deal both with the discrimination argument for owners, and the incentives for managers to run mines even more dangerously during the rundown.

8. There are additional benefits. The American Coal Board should have a mandate to manage closures as sensitively and safely as possible and generate alternative employment. The UK National Coal Board (until abolished by Mrs Thatcher) and Charbonnages de France both tried hard on this. In addition, a nationalised agency would I assume not be treated superstitiously as a person for speech rights. It would lobby for its corner, like every public agency, but far less effectively and generously than a private industry.

We have a very specific problem for which the solution of nationalization looks a sensible solution. It won’t happen of course, at least in the USA.  Nationalisation is genuinely socialist: a word that that has an emotive force in American political discourse roughly equivalent to paedophile serial killer. Besides, the ethos of Don Blankenship – and the miners unlucky enough to work for him – is off-the-charts macho and individualist. The sober suits of Big Pharma read the tea-leaves on health care and cut a pragmatic deal with Obama to protect their stockholders. Blankenship would rather die than protect his through socialism.

PS. “Taking” is not a peculiarly American doctrine. There’s some European human rights case-law on fair compensation: ECHR, Sporrong and Lönnroth v. Sweden (1982) and especially Lithgow and others v. UK (1986), see para 120.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

4 thoughts on “Nationalize coal”

  1. I'd disagree that there's even "perhaps" a legal taking due to increased regulation of coal. Even Scalia acknowledged in the Lucas case that a property could be reduced to zero value legally if the proposed use constituted a public nuisance. Case closed.

    (And even if the case's not closed, you're still allowed to mine your coal – market regulation of what you do with it is a different matter.)

  2. Is metallurgical coal (coking coal) a significant contributor to greenhouse gases? Mining of coal for steel production will be needed for a long time after coal fired electric plants are a memory.

  3. hmm you know that one third of youngish Americans said they preferred socialism to capitalism in a *Rasmussen* poll ?

    I am alarmed as my 12 year old daughter is currently surrounded by youngish Americans many of whom (according to your expert opinion) have nothing against paedophile serial killers (oh and in the US political discourse it would be "pedohile serial killer" no need for samefacts bloggers to have samespelling but if you refer to US discourse why not use US spelling).

    I am arguing in bad faith. Obviously the US political discourse is disconnected from US public opinion. In the US political discourse raising taxes on the rich and cutting taxes on the poor is an extreme proposal even though it is supported by must US adults. The political discourse is a discussing among the ruling elite.

  4. Agree with Brian Schmidt on the Takings question, at least in terms of US law, although on different grounds. I don't think that this would be a Lucas issue, because the power plants would still be valuable: they would just have to be retrofitted. Thus, the issue is one of balancing, and especially given that the utilities have remade their investment many times over on their coal-fired plants (most of which are quite old), it's an easy win for the government on Penn Central grounds.

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