The End of the Cowboy Economy
December 9, 1973, Page 275Buy Reprints
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The United States has built its prosperity on a foundation of ample and low‐cost energy. So when the longsimmering energy crisis finally erupted, many Americans understandably reacted with fear and alarm. But as bad as this winter's fuel crunch may be, the energy crisis may prove something of a blessing, too. For it will force the nation to make some highly desirable changes over the next decade or two.
Low‐cost energy has permitted the United States to be astonishingly profligate with the earth's natural resources. Buildings were designed to minimize capital cost, and nobody counted the kilowatts needed to heat, cool, and light them. Cars became two‐ton chariots guzzling gas as they carried their lone occupants from downtown offices to suburban homes sprawled so far and wide that no mass‐transit system could serve them effectively.
The United States became a throwaway society, finding it easier and cheaper to discard broken toasters than to fix them, to buy beer in nonreturnable cans and to dump thousands of tons of metal on the garbage heap rather than recycle them. In the memorable phrase of economist Kenneth Boulding, the United States was "cowboy economy," with a frontier ethic of limitless resources.
Boulding suggested instead a "spaceship economy," in which people conserve and reuse material and energy, like astronauts aboard an orbiting capsule. This, of course, is the dream of environmentalists, who have waved their "Spaceship Earth" banners since the first Earth Day three and a half years ago. Though some environmental standards will have to be temporarily relaxed this winter, the energy crisis has at last hammered home the conservation message with resounding force. And for the first time, the environmentalists' message is carried by a powerful medium: soaring energy prices.
As energy prices continue to rise (some crude oil sold briefly for $15 barrel recently), the market Is bound to favor conservation. A recent Bureau of Mines roport, for example, estimates that if gasoline costs ninety cents gallon, 79.3 per cent of all cars sold would be compacts. At $1 a gallon, small cars would take 99 per cent of the auto market. The savings would be substantial: If cars weighed 2,500 pounds instead of 3,500 pounds, the United States would save at least 2.1 million barrels of crude daily—more than the Alaska pipeline will deliver.
Higher fuel prices would also make mass transit more competitive, could spur shippers to shift from trucks to railroads, encourage homeowners to insulate their homes more efficiently, and prod architects into designing offices and houses that save energy. In all, says a report by the Office of Emergency Preparedness in Washington, such changes could conserve 7.3 million barrels of oil a day by 1980, or two‐thirds of projected imports. The balance‐of‐payments saving: $10.7 billion.
The energy crisis could also spur more rational solutions to the problems of solid waste. Instead of discarding such energy‐intensive products as metal cans and plastic packaging, communities will find it profitable to recycle or reuse them. An aluminum can, for example, can be recycled for 5 per cent of the energy needed to make a new one. And plastics are petroleum derivates with high BTU content. What cannot be recycled economically can be burned to generate power.
Some city officials even claim the energy crisis will work to restore urban areas. In this view, the city itself is an energy‐saving device, where people, offices, stores and entertainment are close by or can be tied together with efficient mass‐transit systems. As New York Deputy Mayor Edward Hamilton put it: "In the city you don't need a 300 horsepower car to go to the drugstore for a pack of cigarettes."
For industry, the adjustment to high energy prices could reverse some longstanding practices. Some products may have to be designed for easy repair, easy recycling, and even longer life. More broadly, the quest for higher productivity may shift. Until now, industry has sought labor‐saving machines — in effect, substituting energy for people. But the scarcity of both energy and material could alter the tradeoff; "The focus will shift from labor productivity to materials and energy productivity," an economist has predicted.
None of this will come about quickly, of course, and some regulation may well be needed to shore up incentives for conservation if market forces prove too weak. Moreover, existing disincentives should be phased out, especially government‐set freight rates that discriminate against scrap, and depletion allowances that discourage recycling. But the energy crisis presents an opportunity to take many rational steps the nation has so long avoided. The days of the cowboy economy are numbered.
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