“Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousand fold by a factor that is insignificant in, say, physics, mathematics or medicine – the special pleading of selfish interests.”- Henry Hazlitt, Economics in One Lesson (1946)
A year ago, the American Wind Energy Association (AWEA) was desperately fighting against the scheduled expiration of its most prized federal subsidy, the wind production tax credit (PTC). As I wrote at that time, AWEA’s argument–please government, keep our activity going for job creation and other economic gain–rested on a basic, long-debunked fallacy of economics.
AWEA believes that wind’s ”is” equals ”ought”–that recorded activity is a per se good. But there is an opportunity cost of action–what is not seen but known to exist from the economic law of scarcity.