Ever noticed how everything is an “emergency” now? Last week on the east coast of Australia there were threats of electricity blackouts for a few days due to a couple of coal-fired power stations going offline in conjunction with some cold weather. By the way media responded, you’d think the world was coming to an end. It was, we were told, an “energy crisis”. The crisis, of course, was mostly a political one, heightened by the prominence of the climate/renewables issue in the recent federal election. For the purposes of this post, we’re going to differentiate between political emergencies and real emergencies. The two have become ever more conflated in recent decades and, as we are likely to have a lot more of both in the years ahead, it’s worth understanding the differences.
The political emergency that hit Australia last week was no surprise to anybody with some understanding of our recent political history around energy generation. The Australian electricity market is the kind of clusterf**k that can only be created by decades of bad ideas, failed policy and political grandstanding.
It all began back in the 80s and 90s where the ideology of de-regulation and privatisation was all the rage. Governments sold off what were then public assets in order to let the wonders of the free market work its magic in the utilities sector. In relation to electricity, there was a split into a wholesale market where, in theory, providers compete to supply electricity to the grid and a retail market which handles customer connections. I have seen the inside of the latter as I’ve worked on a couple of IT projects trying to get a slice of the juicy connection fee that is claimable when you hook a consumer up to the system.
To get a feel for what the retail electricity market is like in Australia, imagine a physical market full of sellers who are all selling the exact same type of shoe for which the wholesale price is the same. Imagine 10 stalls lined up next to each other with an identical white sneaker selling for $50 RRP. How would the stall holders attract customers given they are selling the same product? One way to do it is to try and hide the real price. You could offer the shoe at $40 with a $1 a month rental price. That might attract a few suckers. Maybe you could dress up in bright clothing, play loud music and do some interpretive dance about the sneaker. Maybe you could bribe customers with a gift if they buy the shoe or package the shoe together with a pair of socks for a special price.
Whatever you and the other sellers would do, the result would look less like a well-ordered market for selling goods and more like a circus. And that’s exactly what the Australian electricity market is: a circus.
Well, the circus broke down last week in what economists like to call a “market failure”. The government had to suspend the wholesale market in order to keep the power on. In the grand scheme of things, this wasn’t a real emergency. In a real emergency, the public is required to do something. For example, if there’s a bushfire bearing down on your house, you either get out or stay and defend. Hopefully, you are prepared for such an eventuality and the local emergency services may also lend a hand. In a political emergency, there is no need for the public to do anything but there is the need to appear to do something and that’s where politicians come into their element.
For last week’s blackout risk, the NSW energy minister advised the public to switch off electrical appliances and try not to use multiple appliances at the same time. He singled out dishwashers for some reason, telling people to put the dishwasher on when they went to bed instead of during peak energy usage.
Some rational-minded people pointed out that while the politicians were advising citizens to limit their electricity usage, the city of Sydney was holding its annual Vivid Festival where numerous installations are sprinkled throughout the city showcasing artistic light displays. Lighting uses electricity, reasoned the rationalists, and therefore the NSW government was being hypocritical by telling citizens to turn off electricity while holding a festival entirely premised on using electricity.
The irrationality of the guidance given by politicians is a key part of a political emergency. It is a feature, not a bug. Who can forget the early days of corona when we were all told to wash our hands for 30 seconds after the slightest exposure to the outside world. How about people in the US who were spraying and scrubbing groceries. All this for a virus transmitted through the air. Later we were told to wear masks which made slightly more sense but only if you ignored the fact that not a single study has shown them to be of any use in protecting against respiratory viruses. Finally, we got to the vaccine, an injectable “solution” which immunologists were fully aware could never protect from infection (the interested reader can check out Australian immunologist, Robert Clancy, explaining why the corona vaccines were never going to work).
Probably the ultimate example of the uselessness of the advice given during a political emergency is the famous “duck and cover” method devised during the height of the cold war where nuclear Armageddon seemed a real possibility.
The primary purpose of the guidance given to the public during a political emergency is to give people the illusion of control. If a politician were to tell everybody to hop on one leg for 5 minutes a day, we can be quite sure a large number of people would follow along and we’d see thousands of TikTok videos suddenly appear featuring the coolest way to do it. The psychologist, Daniel Kahneman, outlined the reasons for this behaviour in a debate with Nassim Taleb where he pointed out that people will comply even if they know the advice is not of any practical benefit. There is a need, it seems, for people to do something, anything, in a time of uncertainty.
In addition to the personal psychological drivers, there is also an important socio-political element to the public advice given during a political emergency. It creates a moral-normative framework that invokes herd psychology. Immediately, an in-group and an out-group are formed. The former believes the advice given, the latter does not. The former is, by definition, aligned with the government giving the advice, the latter is not. In this way, the advice does beautifully to turn the public against itself and prevent it from uniting against the government. This is why it helps the government if the advice is really dumb, because that means some people are going to reject it and become part of the out-group.
Thus, if you point out that duck-and-cover is a dumb idea that won’t make a jot of difference in the event of a nuclear bomb going off in the vicinity, you must be a pinko-commie traitor. Don’t wanna wash your hands or wear a mask when there’s no evidence that these will work? You’re an anti-science conspiracy theorist. Don’t wanna take a vaccine that was never going to work according to the first principles of immunology? You’re an anti-vaxxer. The labels change, the pattern is the same.
The moral-normative framework creates scapegoats and every politician needs a good scapegoat in a time of emergency because, if there are no scapegoats, then the politician will become the scapegoat.
We saw a prime example of this during the 2019 Australian bushfires. The Prime Minister at the time, Scott Morrison, was on holiday in Hawaii when the fires broke out and was a little too slow in deciding to return home. He became the scapegoat.
There is, of course, no practical need for a Prime Minister to take an active role in a bushfire emergency. If the emergency services are well funded and properly organised, they will take care of it. That’s the whole reason why they exist. Nevertheless, politicians are expected to be there to show moral support. If they don’t, they will suffer politically and one of the ways that happens is that they get blamed for the whole thing. It’s unfair, but that’s herd psychology for you. That’s what happened to Morrison. It was an exact replica of what happened to George W Bush who was on holiday when Hurricane Katrina hit and took too long (politically-speaking) to act.
It is because every large-scale real emergency always also becomes a political emergency that the two are conflated. The problem with hurricanes and bushfires is that it’s all but impossible to know in advance when one will become an issue of national importance. That makes the political calculus difficult and it’s easy to understand why politicians would prefer not to break a holiday until it’s absolutely (politically) necessary.
With the advent of instantaneous communication and the 24 hour news cycle, politicians are now required to show up to every emergency and look like they are in charge. This gives the viewer of the 6 o’clock news the impression that nothing happens in the world unless a politician says so which creates a positive feedback loop where politicians have to pretend even harder that they are doing something because that’s how people think the world works. This makes political emergencies more common and that is a big part of the reason why everything is an “emergency” these days.
Fact is, in a real emergency, no politician is going to save you. They couldn’t even if they wanted to. You’ll have to save yourself and the best way to do that is to be prepared and know how things work in the real world. By contrast, political emergencies aren’t to be taken seriously, which is to say, literally. Rather, you should look for the underlying reasons why the problem appeared in the first place.
In recent times, the pattern of most political emergencies is the same. The public demands things that cannot be delivered, politicians promise the impossible, and private enterprises happily accept enormous sums of public money to feed the illusion. Want to transition a power grid designed for burning fossil fuels to renewables without any loss of service or increase in price? Sure thing. We’ll just have to transfer billions to these renewable energy conglomerates while reducing the amount of redundancy in the system (leading inevitably to blackouts). Want a vaccine that stops you catching a respiratory virus? No worries. Just a sec while we throw money at Big Pharma while removing their legal liability and quality standards. What could go wrong?
That dynamic is going to give us a whole lot more political emergencies in the years ahead and, eventually, some real ones too.