Probably very few readers here are old enough to remember China’s “Great Leap Forward.” You’d have to be my age (73 – born in 1950), or close to it, to remember the GLF when you read about it at the time. The name “Great Leap Forward” refers to Mao Zedong’s Second Five-Year Plan, launched in 1958, and aimed at taking the Chinese economy from backwardness to modernity. This wasn’t just any old central planning project, but a completely new approach designed by really smart people to correct the mistakes and failures the Soviet Union had made on its path to communism. This time, they were going to get central planning right.
Yesterday, the Biden Administration launched a major new climate initiative whose design bears some striking similarities to the Great Leap Forward. Since most readers probably don’t know what the Great Leap Forward looked like, I’ll save that information for the end of the post.
Biden’s new administration initiative is called “Community-Driven Solutions to Cut Climate Pollution Across America.” A press release from the EPA is This. Nick Pope reported on the new initiative in This post at Daily Callerlater reposted at Watts Up With That Here.
This new initiative is just a small part of the enormous economic waste of the misnamed Retrenchment Act, which saw trillions of dollars in subsidies for uneconomic projects. But the “community-driven” tagline here is what evokes memories of the Great Leap Forward. The basic idea is that the new investments and technologies to transform our energy economy will come from federal selection and subsidies for a variety of projects sourced from state and local governments, or “communities.” From the EPA release:
Today, July 22, . . . The U.S. Environmental Protection Agency announced the recipients of more than $4.3 billion in grants for the Climate Pollution Reduction Program to implement community-driven solutions to address the climate crisis. . . . The grants will fund projects that support the deployment of technologies and programs to reduce greenhouse gases and other harmful types of pollution across the country. . . . Together, these selected projects will implement ambitious climate pollution reduction measures designed by states, Tribes, and local governments to achieve significant cumulative greenhouse gas reductions by 2030 and beyond.
Gone is the outdated idea that the path to an efficient and reliable energy system is through for-profit businesses competing to find the most cost-effective solutions. The new idea is for local governments, or “communities,” to run the economy, guided and supported by some generous federal funding. Here’s a quote from the Biden administration’s “climate czar” John Podesta:
“President Biden’s climate pollution reduction grants empower local governments to develop climate solutions that work for their communities.”
Pope gives some examples of the types of projects that will receive funding:
Projects include building electric vehicle (EV) charging stations, grants to help local governments accelerate green energy site selection, and programs to increase the adoption of heat pumps.
What all of these projects have in common is that they are uneconomical and will never be voluntarily accepted by the people with their own money. Therefore, there must be coercion through federal funding and mandates from local governments.
Compare this vision to China’s Great Leap Forward. A fairly comprehensive brief history of the GLF can be found at Asian Studies Association here. The basic idea is that communes would be established, each with about 5,500 households, to become the main economic units, and then receive instructions from above on which lines of business to pursue:
Drilling motion [Mao’s] a distinctive faith in the Chinese peasant masses—now free from the constraints of a skeptical intellectual—to overcome all obstacles and achieve a Communist utopia through unity, manual labor, and sheer will. In this final stage of collectivization, communes were formed—each containing about 5,500 households. . . .
In the classical way of central planning, enterprises were chosen to pursue based on an ideal vision of a utopian society, rather than economic reality. The prevailing thinking at the time was that a strong and modern economy produced a lot of steel, and therefore the production of a lot of steel was proof of success. And so the most famous example of the GLF’s folly in economic development was that each household had to build its own furnace to produce steel:
One of the most notorious innovations of the Great Leap Forward involved the industrial revolution in the countryside, where peasants built millions of furnaces in their backyards and then divided their time between tending their crops and smelting steel.
This quickly leads to a host of undesirable consequences. For example:
Gathering fuel to fuel all these furnaces has resulted in the loss of at least 10 percent of China’s forests. . . . Instead of mining ore for smelting, people contribute iron implements, including tools, utensils, pans, doorknobs, shovels, window frames, and other everyday items, while children rummage through the ground for iron nails and other scrap. . . . [T]This campaign essentially turned practical items into useless lumps of iron that only served to clog up the railway tracks. . . .
And when labor is diverted from productive to unproductive uses, the economy collapses. It takes about a year:
Famine became a widespread problem with the 1959 harvest. . . . As rural food reserves were depleted, peasants began to die in large numbers in the summer of 1960. They collapsed in the fields, along the roadsides, and even in their homes, where family members watched their corpses rot, unable to bury them or even chase away flies and rats. . . . . Estimates of the number of deaths directly related to the famine range from a minimum of twenty-three million to as many as fifty-five million people, although the most commonly cited figure is thirty million.
Well, the good news is that this latest Biden plan is a lousy $4.3 trillion—large, but still not much more than a rounding error in the federal budget. The General Inflation Reduction Act—touted as $1.5 trillion, but many estimate it to be more like $2-3 trillion—is not a rounding error. Spending that much money on uneconomic projects and destroying wealth could have catastrophic consequences. I hope we avoid the fate of China in the 1950s, but we can’t be sure until the climate maniacs are defeated.
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