Fridge Magnates
Via Josh Marshall, who got it from a New Yorker blog post, comes an argument from Steven Chu, Obama’s pick for Energy Secretary, that seems very consonant with my Thanksgiving weekend post about the role of excessive “democracy” (of the interest group lobbying kind) in the ruination of the U.S. auto industry. It seems that at least one sector of U.S. manufacturing greatly improved itself when government stopped heeding its wishes.
Consider, Chu said, the refrigerator.Refrigerators consume a lot of energy; all alone, they account for almost fifteen per cent of the average home’s electricity use. In the mid nineteen-seventies, California—the state Chu now lives in—set about establishing the country’s first refrigerator-efficiency standards. Refrigerator manufacturers, of course, fought them. The standards couldn’t be met, they said, at anything like a price consumers could afford. California imposed the standards anyway, and then what happened, as Chu observed, is that “the manufacturers had to assign the job to the engineers, instead of to the lobbyists.” The following decade, standards were imposed for refrigerators nationwide. Since then, the size of the average American refrigerator has increased by more than ten per cent, while the price, in inflation-adjusted dollars, has been cut in half. Meanwhile, energy use has dropped by two-thirds.
It is unclear whether the American refrigerator industry is better off economically than the automakers, but it would be hard for them not to be.
