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Re: ethanol & lead: a story of market failure



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Vamsi Musunuru wrote:

> Charu datt wrote:
>
> > ........ illustration of how in this case
> > market forces and the profit motive did NOT work for the greater good but
> > exactly the opposite to the greater detriment of the majority public,
> with the
> > worst excesses- collusion, monopolies, and squashing of competition-
clearly
> > demonstrated.
>
> In this case what is the metric for measuring greater good??  And how do you
> conveniently arrive at the conclusion that somehow greater good was not
> serverd by market forces?

I didn't want to post the entire article [10 pages]-
I strongly urge you to check it out at
http://www.thenation.org/issue/000320/0320kitman.shtml

I'll try to summarize how I arrived at my conclusions:
In the absence of, as I concluded:
'collusion, monopolies, and squashing of competition'
consumers would have had a choice of 2 antiknock agents-
ethanol and TEL. Let's compare:

Ethanol is cheap, easily manufactured, & non-polluting.
TEL is expensive- added cost of $0.03/gal in the1920's
when gas price was ~$0.10-0.15/gal,
TEL fouls engine oil- requiring more frequent oil changes,
TEL clogs engine valves and fouls spark plugs-
requiring addition of corrosive
'scavenger' compounds which reduces engine
and exhaust system life by 70%.
TEL manufacture is hazardous and polluting- workers
sufffered debilitating effects of lead poisoning,
many were killed.
TEL use in autos pollutes the air and soil with particulate
lead- a proven public health hazard that causes
neurological damage leading to heart disease
[among other health problems] in adults and
mental retardation and learning disabilities in children.

OK, now let's figure out the 'greater good' by seeing
who benefits and who loses from the choice of TEL
[imposed by the power of 'market forces']

GM, Standard Oil, and DuPont benefit- they patent
TEL and control its manufacture, thus make money on
every gallon of gas sold.

Oil companies [including Standard] benefit because this
further diminishes from consideration the use of ethanol.
They also don't have to invest in refinery upgrades that
would boost octane of their product.

GM and other auto manufacturers benefit-
their engines wear out faster, increasing sales.

Consumers lose out: they pay more for gasoline-
[btw, some companies did try to offer unleaded
ethanol added gas, Standard, using it's monopolistic
powers and through threats of legal harrasment forced
them to cease sales. See full article.]

Consumers lose out: Their engines and exhausts wear
out- corroded and fouled. Cars need more frequent oil changes.

Public health loses: huge amounts of lead ends up in
the environment [1000x increase in air] and in
people's bodies [100x increase].
Children suffer mental retardation from lead poisoning.

TEL manufacturing plant workers lose: many die, several disabled.

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I suppose you could say I used the 'metric' of greatest benefit to
greatest number of people over a long period [60+years]
To me the conclusion [market failure to produce
the greater good- per my metric] seems clear cut.
What makes you call this a 'convenient' conclusion?
What have I missed?






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