Europe, Energy, and the Environment: The Case Against Carbon Taxes

Smith Speech Given at Aspen Institute Conference in Berlin

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The 40-year European experiment on whether centralized planning or the free market is more effective at advancing human welfare is coming to an end.  Spurred by the Soviet belief in “scientific” centralized planning, the nations ofEastern Europe were plunged in to the murky abyss of state management and sluggish economic growth.  The belief that economic efficiency could come without economic freedom was terribly wrong.  Only free individuals are motivated to seek out the knowledge and to acquire and employ the skills needed for efficient growth.  The people of Europe, more so than we in the United States, recognize that fact—for they are closer to the disasters of Eastern Europe, and their nations came far closer to being forced to participate in that experiment.


Yet, today, no longer faced with a military threat, the world seems prepared to repeat the disaster of central planning—with an even slimmer chance of success.  Again, we are told that individual liberty must be subsumed to the collective good.  Again, we are told that individual freedom is incompatible with human welfare.  This time, however, we are told that freedom must be restrained to save not the working class, but Planet Earth.  We are all environmentalists—must we all be collectivists as well?