A giant ball of fusion in the sky pouring out more energy than we could ever use, and we’re nowhere near figuring out how to tap into it.

Outside of medicine, one of the areas where the government funding capture that Eisenhower warned us of hurts us most is the search for alternative energy. Wind and solar energy have a thousand-year head start on oil and natural gas, and yet they’re still extraordinarily inefficient and expensive. If we’re going to find alternatives to fossil fuels, whether among those or other sources, we absolutely must look in different, unexpected directions. This is exactly the sort of thing government bureaucrats are very, very bad at. I’m not sure there’s any research where government funding helps,¹ but the fields where it doesn’t hurt too much all involve us already knowing the science and needing merely to implement it.

We don’t yet know what the science will look like that will give us successful alternative energy. But in order to provide subsidies and funding, legislatures and their bureaucracies must create definitions. They must define what it means to be wind power, or solar power. They must define what it means to be alternative. Those definitions will exclude anything outside of the definition. In other words, government funding by its nature must exclude new ideas, ideas that haven’t been thought of yet. New ideas won’t fit the definitions. But new ideas are where we’ll find the breakthroughs that create successful alternative energy sources.

Whoever makes that breakthrough will be rich, but only over the long term, and government funding now swamps long-term benefits later. Given a million in one chance of millions of dollars in the future, compared with a high chance of thousands or tens of thousands or millions of dollars right now, sane researchers are going to choose the immediate government funding rather than the risky potential breakthrough. This means that whatever avenues government bureaucrats define as valid are where research and development will happen. Even if they’re dead ends.

Government funding changes the definition of success. Government funding by its nature focuses research and development on meeting the rules and definitions that govern funding rather than on actually finding a solution to the problem at hand. This creates a huge incentive not just to follow the research that government bureaucrats approve of, but to game the system rather than follow even that limited line. Rather than a range of research from conventional through unconventional through crazy-but-it-just-might-work we get two kinds of research: conventional and funded, and utterly insane.

One of the reasons the market works to fuel amazing progress is that people buy what makes their lives better, not what they previously said would make their lives better. History is littered with companies who listened to polls about what people said they want instead of watching what people actually do.

But government funding is consensus-based. Even if its definitions continually fail to produce results the definitions aren’t changed.

Currently, we’re focusing funds toward alternative energy solutions that have serious problems. We can’t transport wind to where the power is needed. The power must be generated in places where there is a lot of wind, and then the power transported to where it is needed. Imagine if oil or natural gas power had to be generated where oil was found, rather than transported to the communities that need it! There would be serious distortions of the energy market, similar to the distortions we see now when creating, for example, wind farms near people’s homes, forcing people to live with the massive disruption and noise of wind turbines.

Power sources such as wind and solar that generate power during periods when we need it least, and/or not at all, must be able to time-shift that power. This means some form of battery storage.² Batteries as currently imagined are both dangerous and expensive. They require huge amounts of rare materials. You’re not going to get rid of mining if your power generation relies on battery storage. And the rare earth metals and other chemicals in batteries are corrosive and difficult to safely dispose of.

A top-down push also distorts what corners we’re willing to cut to get the end product. The child labor used to create batteries is the direct result of pushing batteries before the science, let alone the engineering, is ready. Let the solution grow and other solutions will rise to produce the necessary materials. Those solutions will, growing organically, be more labor-friendly, more consumer-friendly³ and more environmentally-friendly. Anything that requires fewer materials is less expensive. Anything that requires less labor to produce is less expensive. Anything that requires less processing to manufacture is less expensive. This all combines to make more environmentally friendly products that are better for everyone.

Unless we use massive government funding to push solutions before they’re ready. Then we’ll have products that are more labor-intensive and more chemically-unfriendly, because we are trying to make them before we’ve allowed people—the ultimate consumers—to weigh all of the benefits and drawbacks and to use their purchasing power to divert research to areas that fix or avoid those problems.

Another problem with government funding is that bureaucrats love big. They love giant projects that look impressive on paper and in news photographs. Politicians gravitate their projects to big companies. Big companies or big donors with old ideas instead of agile new companies with new ideas. The bureaucratic rules starve innovators of the resources and manpower necessary to implement the real breakthroughs we need.

Their solutions tend to be giant industrial-sized farms that destroy people’s homes, or deals with giant businesses wedded to the conventional. It’s the nature of government funding. We have an example of this unfolding just a few miles north, in Georgetown. The City Council thought they knew what the energy of the future would be. They bet lots of money on the certainty that they were right. But they were wrong. Of course the city council isn’t losing money over it. They didn’t bet their own money. The citizens of Georgetown are losing money. A system where someone else pays for mistakes is going to be more mistake-prone and more expensive. Georgetown residents are paying more for energy because, where most Texas towns, such as Round Rock, let each citizen choose who they buy electricity from Georgetown has a government-run system which takes that freedom away.

The Council could have made a safer bet; they could have spent a little money when they signed their contracts to hedge against being wrong. But that would have saved money for their constituents, not them, and it would have meant making tougher budget choices immediately. There is no incentive for making tough choices when someone else is paying the bill.

And of course Georgetown residents are also paying more in taxes, because government officials like to hide their mistakes. It’s something the Georgetown City Council is literally doing; they are refusing to even make their energy contracts public. Georgetown residents literally have no idea how bad their situation is, nor how much corruption is behind it, because their local government is hiding it from them.

The point is not that the problems of alternative energy are insurmountable problems, but that government bureaucrats and legislatures are ill-suited to solve them. They are especially ill-suited to following the new paths that we will need to solve or bypass these problems.

The low percentage of renewable energy forms in our current energy mix is not in spite of government subsidies and research funding. It is because of it. Give the government management of the Sahara, in five years we’d have a shortage of sand. Give the government control over tapping a massive fusion power source hanging in the sky for the plucking, and in half of a century we’d have what we have now: no effective solar power and a whole lot of wasted lives.