Thursday, March 31, 2011

What Does Philosophy Have to do with the Power Grid?

A common thought in our culture is that philosophy is just people's opinions, and that one person's opinion is as good as any other's. It doesn't really matter what you believe, as long as you're sincere about it. After all, philosophy isn't relevant to the really important things in life, right? Here's one stark example of why this view is mistaken:

I just finished watching a History Channel documentary called "The Crumbling of America." The documentary highlights numerous problems with our country's infrastructure, including dams, aqueducts, the power grid, and bridges. Among other things, they predict that there is a 66% chance that in the next 30 years, a large earthquake will bring down the levees of the Sacramento River delta.  A catastrophe of this sort would reduce California's water supply by upwards of 50%.  So, there is a 66% chance that in the next 30 years California will suddenly and catastrophically lose 50% of its water supply, along with the devastation that such a massive flood would bring.

Now, I wouldn't make the claim in all cases, but in the case of (at least) the power grid and other utility-owned infrastructure, I think that the sorry state of things can be traced in part to the philosophical view that businesses are primarily responsible to their shareholders (i.e., those who own stock in the company), not their stakeholders (i.e., those who have some interest in seeing the company succeed, such as their customers, their suppliers, their employees, and so forth). Major infrastructure projects take millions, if not billions or in some cases (e.g., the Sacramento levees), trillions of dollars to carry out. A utility company looking to maximize its profits is going to want to avoid paying for such projects. Further, if a major disaster took out much of the country's infrastructure, either the government (i.e., you and I) or the company's insurance agency would likely be footing much of the bill for the reconstruction project. So, there is a perverse incentive for companies to avoid building new infrastructure or updating old infrastructure if they don't absolutely have to. As long as the current infrastructure is good enough, they'll keep it. If a major disaster happens that takes out the infrastructure, someone else will help pay for it. Either way, it's a win-win for them and a lose-lose for the rest of us.

Who says ideas don't matter?

No comments:

Post a Comment