Hendrickson’s View

Mark W. Hendrickson

Mark Hendrickson is an economist who recently retired from the faculty of Grove City College, where he remains a Fellow for Economic & Social Policy for the college’s The Institute for Faith and Freedom.

Demonizing and Prosecuting Fossil Fuels Companies: Misguided and Pernicious

On a net basis, fossil fuels have abundantly blessed humankind. The producers of those fuels deserve our gratitude, not our censure or condemnation.

One of the more lamentable aspects of the climate alarmist movement is the demonization and persecution of fossil fuel producers.

In what might be called “climate lawfare,” the pending legal case Leon v. Exxon Mobil has plaintiffs seeking monetary damages from a fossil fuel giant for the “wrongful death” of one Juliana “Julie” Leon, who died from heatstroke in 2021 “after driving almost 100 miles without air conditioning on a day when temperatures hit . . . 108 degrees.”

Another recent incident involves a group of young Americans who have petitioned the Inter-American Commission on Human Rights (IACHR) to, in some unspecified way, “hold the U.S. accountable.” They accuse the United States of “violating international human rights laws by backing fossil fuel production despite the [alleged] accelerating climate crisis.”

In the Leon case, plaintiffs’ attorneys will find it difficult to convict ExxonMobil for poor Ms. Leon’s death. Whether she chose not to turn on the air conditioner in her car or whether that unit was inoperative, neither circumstance can be blamed on oil companies. This lawsuit boils down to an attempt to punish oil companies because a record-high temperature occurred in Washington State on the date of Ms. Leon’s demise.

For starters, local weather is not climate. Also, there have been warmer periods in Earth’s past before the Industrial Revolution and the emergence of the oil and gas industry (e.g., medieval, Roman, and Minoan warm periods) when CO₂ concentrations were lower. Also, if CO₂ were the indisputable cause of record-high temperatures, then there should be more record highs now than earlier in our country’s history; yet the historical temperature records show that there were far more record-high temperatures when the concentration of carbon dioxide in the atmosphere was much lower.

Further, it is impossible to quantify how much, if any, of the overall slight rise in global temperatures over the past century has been because of the greenhouse effect (in which, by the way, water vapor is far, far more impactful than CO₂). If increases of CO₂ in the atmosphere make temperatures rise, why, even though the concentration of CO₂ was rising rapidly then, was the period from the 1940s to the late 1970s so cold that scientists in the ’70s were predicting a new ice age? How can any scientist prove beyond doubt that all of the modest global warming since the end of the Little Ice Age in the 19th century has been because of the greenhouse effect, and none by changes in albedo (cloud cover), solar activity, shifting ocean currents, volcanic and tectonic activity, etc.?

Even if one assumed, for the sake of argument, that the entire temperature increase of the past half-century was because of CO₂, scientists don’t agree about what percentage of CO₂ was emitted into the atmosphere by burning fossil fuels and what percentage came from natural causes. And since more fossil fuels have been burned outside the United States and came from fuel produced by non-U.S. companies, the share of CO₂ emissions resulting from American consumption of fossil fuels would account for only a tiny fraction of a degree of the warming.

Even the very premise that a warmer climate is a more dangerous climate is refuted by evidence. In fact, survey after survey documents that far more humans die from cold than from heat. These figures strongly suggest that a warmer planet would, on a net basis, save lives. Indeed, data sets show that the U.S. death rate from climate-related phenomena has plunged by more than 90 percent in the past century.

And considering that today’s modestly warming climate has resulted in longer growing seasons and increased CO₂ has produced increases in agricultural productivity, the evidence leads to the conclusion that the use of fossil fuels is beneficent, not deleterious.

As for the petition to the IACHR to censure the U.S. government for not halting the domestic production of fossil fuels, the case of the young Americans behind the petition is even more tenuous. They have wisely opted not to litigate this issue in a court of law, for unlike the Leon case, in which a family suffered the loss of one of its members, the plaintiffs have suffered no specific loss.

Moreover, their strategy is distinctly undemocratic: They are asking the seven commissioners of the IACHR (none of whom is a U.S. citizen and none of whom was popularly elected) to usurp a fundamental precept of our republican form of government — namely, that our elected representatives should debate and legislate the rules by which we live. If fossil fuel production in the United States is to be restricted by law, then the proper venue in which to make such a determination is the U.S. Congress, not the IACHR.

In both of these cases, to argue that fossil fuel production must be reduced or banned rests on dubious assumptions and arbitrary beliefs. The following questions are unanswerable, and therefore provide no factual basis for prosecuting fossil fuels producers: What is the “right” temperature? What is the “right” concentration of CO₂ in the atmosphere? What percentage of the modest warming of the past two centuries is attributable to the greenhouse effect as opposed to other factors such as those mentioned?

There is a more important point about the domestic production and consumption of fossil fuels that is routinely overlooked by those who are targeting fossil fuels for elimination — i.e., the manifold benefits of fossil fuels for the human race. In addition to amplifying our economy’s wealth-generating capabilities, greatly increasing human mobility, and powering the myriad electric gizmos that enhance our prosperity, fossil fuels have been humanity’s most effective tool for shielding us from the uncomfortable and dangerous temperatures with which weather (i.e., short-term climatic phenomena) persists in challenging us. Heat generated by fossil fuels has made life in Minnesota, Michigan, and Maine far more tolerable and less dangerous than it otherwise would be. Fossil fuel-powered air conditioning has been both a lifesaver and a great enhancer of the quality of life in Arizona, Texas, Florida, and other warmer states.

The fact is that hundreds of millions, if not billions, of human lives have been saved, prolonged, and made more livable by the burning of fossil fuels. Let us not forget, either, that when fossil fuels are used to power our electric grid, the resulting reliability and steadiness of the grid makes costly and potentially deadly brownouts and blackouts far less likely than is the case when intermittent, fluctuating sources of energy such as wind and solar are used.

The bottom line is that, while every temperature-related death, including Julie Leon’s, is tragic, we need to remember that millions of Americans have been spared such a fate by the availability of air conditioning — a lifesaving amenity powered over the years primarily by fossil fuels. On a net basis, fossil fuels have abundantly blessed humankind. The producers of those fuels deserve our gratitude, not our censure or condemnation.

It makes no sense, logically or morally, to demonize, denounce, and seek to hurt our benefactors. And if those who mistakenly believe that fossil fuels pose a mortal danger to life on Earth really want to deprive the rest of us of the manifold benefits of fossil fuels, they owe it to us to go through the democratic process. That would give each of us a chance to vote on the question, which would be so much fairer than trying to get some solitary judge or a few unelected bureaucrats to impose such a harmful restriction on the rest of us.

Envy: The Corrosive Moral Rot at the Heart of Socialism

Envy is the animating spirit of socialism. It is a spiritual drug that induces people to resent those who have more wealth than they do, even though the possessors of that wealth have never done a single thing to harm those who envy them.

That resentment often metastasizes into outright hatred that consumes those who come under its influence. As Aleksandr Solzhenitsyn once said, “Our envy of others devours us most of all.”

Hating the rich might have been understandable in Europe back in the Middle Ages, when those with wealth were the hereditary monarchs and nobles whose monopoly of political power included ownership of vast amounts of land and resources.

In a capitalist (now semi-capitalist) society such as the United States today, the reality is substantially different. Capitalism’s megafortunes do not stem from their owners being a hereditary, politically privileged class; rather, they are earned in the marketplace.

I concede that too many Americans get rich from cronyism, and I would welcome a reduction of that repugnant abuse of government power, but today’s megafortunes result from visionary entrepreneurs who generate fortunes by providing what millions of consumers value.

A disturbing phenomenon is the consuming envy that many Americans express toward billionaires — an envy that is repackaged as a virtue by demagogic politicians. As Thomas Sowell put it, “Envy was once considered to be one of the seven deadly sins before it became one of the most admired virtues under its new name, ‘social justice.’”

When we hear people on the left fantasizing about sending billionaires to the guillotine, and realize that they mean it, it is a sober reminder that we are flirting with savagery.

The anti-billionaire mob is caught up in horrible economic ignorance. They are tragically unaware of the basic structure of a market economy, in which exchanges are voluntary. Such exchanges are mutually beneficial — “positive sum,” to use an academic term. The way an individual entrepreneur becomes a billionaire is by creating at least a billion dollars’ worth of value for a huge number of his or her fellow citizens.

Thus, to envy and hate a billionaire is to despise someone for having provided so much value for others. What madness it is to demonize those who have done the most to economically enrich their society as enemies of society? This brings to mind Malcolm X’s statement that “envy blinds men and makes it impossible for them to think clearly.”

Socialism, which preaches economic equality, is at war with nature and reality. Nature constantly produces a spectacular and wondrous variety. She endows each human being with a unique combination of qualities, talents, attributes, skills, personality, etc. If nature is allowed to take its course — that is, if people are free to develop their talents, pursue their goals, maximize their potential, and achieve excellence — society will be richly benefited.

Some will excel in athletic prowess or artistic creativity, which softcore socialists here in the United States (unlike hardcore socialists such as China’s Mao Zedong) will tolerate. But what today’s American socialists simply cannot accept are individuals who excel in the ability to provide goods and services to others to such an extent that they earn large fortunes — the very fortunes that are the evidence that they have excelled in supplying their fellow men and women with goods and services that enhance their standards of living.

Envy despises individual uniqueness and excellence, and socialists seek to obliterate them. Socialists regard it as a moral abomination that some individuals become so much richer than others by providing things that, in many cases, are more important to a customer’s well-being than, say, the entertainment provided by exceptional athletes or artists, or the utopian visions of a hypothetically egalitarian society.

Thus, socialists punish and hammer down society’s wealth creators for the “crime” of creating wealth for others. This is the dynamic encapsulated in Margaret Thatcher’s insight that “the spirit of envy can destroy; it can never build.”

The inescapable problem facing socialist governments is that nobody has figured out how to “level up” — how to make individuals more talented, more intelligent, more industrious, and more productive. All they can do is to “level down” — to hamper, to suppress, and to confiscate the wealth of those who were guilty of excelling economically. This economically destructive feature of socialism points to a crucial inconsistency in the basic theory of socialism: The socialist theory of all members of a society being equal is exploded by the real-world implementation of socialism.

As George Orwell described it in his brilliant parable Animal Farm, “All [humans] are equal, but some are more equal than others.” In theory, socialism extols equality; in practice, it is elitist to the core, where political leaders wield extraordinary powers to confiscate the wealth, exercise despotic control, and degrade the lives of the rich, successful, and productive members of society — those who have excelled.

Another example of envy and its accompanying leveling-down mentality is evident in the recent proposal to shut down the programs that serve young, gifted children in New York City schools. I studied the education of gifted children as one of my two courses of graduate work at Oxford, and I can attest that gifted children need the special accommodations of programs designed with their particular needs in mind every bit as much as kids at the opposite end of the learning spectrum need special remedial instruction.

Indeed, thousands of teachers would tell you that the optimal education system would be one in which each pupil has an individual curriculum tailored to his or her individual aptitudes and learning process. Human beings are individual, not fungible like lumps of inert metal. In education, as in other fields, the socialist dogma “one size fits all” is a gross fallacy, a monstrous lie about what practices are compatible with human nature.

Shutting down a program tailored to gifted children appeals to the envy of those who are not so gifted. That is incredibly short-sighted and self-defeating. If schools can unlock the full potential of these gifted individuals, it is true that they are highly likely to advance to careers with handsome financial rewards.

But how will those fortunes be earned? Again, it will be by the service that they render to and the value that they create for others. Whether the students become doctors, healing those who lacked the intelligence to become doctors themselves, or become engineers who design the physical and digital infrastructure and devices that enrich our lives, or in thousands of other intellectually advanced ways profit and prosper in exchange for providing high-value goods and services for others, programs to maximize the development of gifted children’s potential will accrue to the overall well-being of society.

Value-creation will be enhanced, and since non-gifted people far outnumber the gifted minority, most of that value will be consumed by the non-gifted. Everyone should be grateful for human excellence rather than envy it and try to obliterate it.

I give the last word to Napoleon, who said, “Envy is a declaration of inferiority.” Come, my fellow Americans: rise above envy. Don’t wrap yourself in inferiority by resenting excellence and achievement. Instead, respect, applaud, and be grateful for individual excellence. There is no social greatness without individual greatness.

$4,000 Gold: What Is Going On?

The price of gold recently breached $4,000 per ounce for the first time ever. That is an extraordinary move in the price of an asset that in most years can be described as stodgy, if not boring. Gold never traded above $3,000 per ounce until last March, and $4,000 per ounce is more than double the price that the yellow metal was trading at a mere two years ago.

Not only is the size of the price move highly unusual, but so is the public reaction. When the price of gold briefly soared from less than $400 per ounce to more than $800 per ounce in 1979 - 1980, the story was big news. Today, by contrast, the price of gold is barely a blip on most investors’ radars. The investing public seems to think that the doubling of the price of gold in a mere two years is no big deal. I think that it probably is. Let’s look at what might be the causes of this extraordinary price increase.

Let me start with disclaimers: I am not an investment adviser, and nothing that I write here is to be construed as investment advice. Although I have above-average familiarity with the gold market and financial markets, I am by no means a student of those markets. I have no desire to take a wild guess at what will happen to the price of gold after today.

Gold is commonly regarded as a hedge against inflation — that is, against the depreciating purchasing power of our fiat currency, the Federal Reserve Note (FRN). (“Fiat” means: unbacked by anything real or physically substantial but having monetary value only by government decree.) I prefer the term “Federal Reserve Note” to “dollar,” because historically in the United States, the word “dollar” denoted a specific quantity of gold and/or silver. We use the word “dollar” today out of force of habit, but Federal Reserve Note better describes the reality and essence of our money.

Unlike the gold bull market of 1979 - 1980, we are not currently experiencing double-digit inflation (at least, according to official statistics, which I fully admit are often, shall we say, “inaccurate”). Nevertheless, with the Federal Reserve committed to debasing the “dollar” (FRNs) at a rate of 2 percent per year and currently accepting a rate of debasement that is even faster, one can see the value of owning some gold as a hedge or insurance policy to preserve purchasing power.

Still, as insidious as the ongoing debasement of the FRN is, the rate of debasement doesn’t seem to be sufficient cause for the price of gold to have doubled in only two years. There must be other factors involved. The most obvious of these is the national debt, which today is close to $37.9 trillion. The perennial $64 million question about the national debt has been: Will we ever get to a point where there are not sufficient buyers for that debt?

Perhaps the most significant warning sign on the road to national bankruptcy is when a country gets to the point at which its debt grows faster than its gross domestic product (GDP). That is where the United States finds itself today.

While the final figures for fiscal year 2025 aren’t available yet, GDP has risen by approximately $1.2 trillion over the past 12 months, while the national debt increased by approximately $1.8 trillion over the same span. It used to be that we could count on foreigners to purchase our national debt, but a combination of fewer imports because of increased tariffs and less foreign willingness to hold FRNs because of increased weaponization of the FRN by Uncle Sam is reducing the foreign demand for FRNs and U.S. debt instruments. This suggests that the Federal Reserve will have to print additional currency to finance the debt, resulting in a more rapid depreciation of the FRN down the road.

Another possible factor pushing the price of gold higher is the fear of potential war. Certainly, between Russian President Vladimir Putin’s mad aggression and Chinese leader Xi Jinping’s ideological fanaticism, armed conflict is a possibility. While I’ll favor our military over the Russian and Chinese militaries any day of the week, the strain of financing a major conflict might be the straw that breaks the back of our national debt. Then the price of gold would soar far higher than it already has.

The simplest explanation for why the price of anything goes up is that the demand for the product is increasing more rapidly than the supply. We don’t need to know why the demand is going up, although in the case of gold, there is a consensus that foreign central banks have been aggressively accumulating gold in an effort to establish an international currency as an alternative to the FRN. Will they succeed in doing so? I surely don’t know, but the simple fact that they are adding to their reserves of gold implies higher prices for the metal in the absence of offsetting factors.

The precious metals-related websites are full of dazzling predictions of $5,000, $8,000, $10,000, $50,000 prices for gold in the future. Could any of those predictions come true? Yes, they COULD, but that is not to say they will.

As Yogi Berra would say, “It’s tough to make predictions, especially about the future.”

The only sort of “advice” I would offer is the comment that we indeed live in an unusual time and that it wouldn’t hurt for you to consult a financial planner to discuss the pros and cons of owning some gold. Caveat emptor, and may wisdom guide you.

A Fascinating World Series

The 2025 World Series between the Los Angeles Dodgers and Toronto Blue Jays treated baseball fans to a thrilling and unexpected drama.

I have used the metaphor of a kaleidoscope in relation to baseball (and to other sports also) to indicate that while the same simple elements remain, the configuration of those elements is ever-shifting. Whenever a fan is tempted to think, “I’ve seen it all before,” something new and unexpected happens on the field of play to explode that mistaken conclusion.

The Dodgers and Blue Jays were well matched. Both teams flashed championship-caliber players who were passionate and spirited. Each team in turn showed great resilience.

After splitting the first two games of the series in Toronto, Game Three in Los Angeles would have been an obvious turning point in most years. The Dodgers prevailed in a classic 18-inning marathon when last year’s World Series MVP, Freddie Freeman, belted a walk-off home run. Game Three was also noteworthy for what the Dodgers’ two-way superstar, Shohei Ohtani, accomplished at the plate. He absolutely smashed the all-time record by reaching base nine times in a World Series game. The previous record was six. Four of the nine times he reached base were on extra-base hits, tying the record that was set way back in 1906 for a World Series game. Wow!

Such a defeat might have crushed a lesser team, suddenly down two games to one with the next two games to be played on the Dodgers’ home field. The Blue Jays, however, were undaunted. They won those two games, enabling them to return home to Toronto up three games to two with a golden opportunity to win the franchise’s third title (and first in more than 30 years) in front of the hometown fans. It wasn’t to be. The Dodgers turned the tables on them, winning two tense contests as the visiting team. So much for home-field advantage: Five of the seven games were won by the visiting team.

The 2025 Series gave fans two classic games to remember — the aforementioned Game Three marathon and a nail-biting finale. In Game Seven, the Dodgers’ Ohtani was the starting pitcher, but he was unable to replicate his historic performance in the previous series against Milwaukee when he struck out 10 Brewers batters while hitting three prodigious home runs. In this game, Ohtani showed that he was human, giving up a three-run homer to Bo Bichette and ending his night on the mound in the third inning with the Dodgers trailing, 3 - 0. The Dodgers made it 3 - 1 in the fourth and 3 - 2 in the sixth, only to have the Blue Jays score a run in the bottom of the sixth to restore a two-run lead.

The rest of the night belonged to the Dodgers. Interestingly, the offensive heroics came not from the Dodgers’ marquee players — Ohtani, Freeman, and Mookie Betts — but from the supporting cast, proving once again that baseball is a team sport and that having superstars in the lineup is no guarantee of victory.

In the eighth inning, third baseman Max Muncy, who batted less than .200 in the Series but who also holds the Dodgers’ all-time record for postseason home runs, connected for a four-bagger off rookie sensation Trey Yesavage, who, just two games earlier, became the first rookie pitcher ever to register 12 strikeouts in a World Series game.

With one out in the ninth, Dodgers second baseman Miguel Rojas — a 36-year-old 12-year veteran who averages fewer than five home runs per season — connected to tie the game.

And in the top of the 11th, it was catcher Will Smith who struck the decisive blow.

While the three solo home runs will be what fans remember most vividly about this game, as a former baseball coach, I think Toronto’s fatal mistake came in the sixth inning. That is when a Toronto relief pitcher walked Mookie Betts to open the inning. A cardinal rule for pitchers: Don’t walk the leadoff batter; make him earn a place on base. Betts would eventually score. If he hadn’t, the two home runs in the eighth and ninth innings would have left the Dodgers one run short, and (if nothing else changed) we wouldn’t have seen Smith’s winning home run in the 11th, and the Dodgers wouldn’t be celebrating being the first team since the Yankees a quarter of a century ago to win back-to-back World Series.

There are several other aspects of Game Seven worth saluting. In the fourth inning, Blue Jays center fielder Daulton Varsho made the greatest catch of the year, only to be followed one batter later by an equally spectacular diving catch by first baseman Vladimir Guerrero Jr. For the Dodgers, Rojas saved the game by making a great play at second base to force out the potential winning run at the plate for the Blue Jays in the bottom of the ninth.

Most notable of all was the performance by the World Series MVP, pitcher Yoshinobu Yamamoto, who won three games — a complete game gem in Game Two, a strong six-inning start in Game Six, and then Game Seven, which he entered in relief the very next day (his first career relief appearance) to get the final eight outs for the Dodgers. Yamamoto’s ERA in those three victories was a minuscule 1.05 — the stuff of legend.

Several individual performances by Blue Jays players deserve to be mentioned here. Third baseman Ernie Clement set the all-time record for hits in a single postseason with 30 and another record of most multi-hit games in a postseason: 10. Right fielder Addison Barger tied two World Series records: Hits in a World Series (12) and multi-hit games in a single Series (six). Barger also became the first player in history to hit a pinch-hit grand-slam home run in the World Series. Guerrero tied with Ohtani for most home runs this postseason with eight, and he was alone atop the RBI list with 15.

It was a memorable World Series, one of those cliffhangers where you feel it’s too bad one team had to lose it. The Blue Jays lost by a hair. Congratulations to the world champion, Los Angeles Dodgers.     *