TOS Blog: Daily Commentary from an Objectivist Perspective

U.S. Fracking Attracts Massive Foreign Investments

Low energy costs and abundant petrochemical materials made possible by those working in horizontal drilling and hydraulic fracturing (fracking) have made the United States one of the least expensive places for chemical manufacturing on the planet.

Stephen Pryor, president of ExxonMobil Chemical, explains:

[M]anufacturers can make ethylene [a primary petrochemical building block used in many resins, plastics, and industrial chemicals] in the United States for less than half of what it costs in Europe, Asia, and Latin America.

This advantage has not gone unnoticed.

The American Chemistry Council (ACC) estimates that, through early December 2013, “over 135 new chemical production projects, valued at $90 billion,” are underway in the United States, with half the funds coming from foreign firms.

One company attracted to the U.S. market is the world’s largest producer of methanol, Methanex Corporation, in Vancouver, BC Canada. Methanex is disassembling two of its plants in Chile, shipping them across the Atlantic Ocean and up the Mississippi River, and rebuilding them in Geismar, Louisiana. The first facility will be online by the end of 2014, with the second starting up in early 2016. The plants will employ 2,500 construction workers initially and 165 people long term.

South African-based Sasol is in the early engineering and design phases of two Louisiana projects expected to cost upwards of $21 billion—making the investment the “largest single manufacturing investment in the history of Louisiana” and “one of the largest foreign direct investment manufacturing projects in the history of the United States,” according to Sasol. The investment will finance the construction of the first U.S. facility to chemically convert natural gas into diesel fuel, as well as a world-scale “ethane cracker” facility to produce ethylene.

Asia’s largest chemical producer, Formosa Plastics Group, is also expanding its U.S. operations, seeking permits for a $2 billion expansion in Texas. Susan Wang, vice chair of the company, said, “Because of shale gas, the cost of making petrochemical and plastic-related products is becoming very competitive here in the United States,” and “probably as cost effective as in the Middle East.”

Even Middle Eastern companies are turning to America. One of Egypt’s largest corporations, Orascom Construction Industries, through its wholly-owned subsidiary Iowa Fertilizer Company, broke ground on the “first world scale natural gas-based fertilizer plant built in the United States in nearly 25 years,” estimated to cost $1.4 billion.

And Saudi Basic Industries Corporation—the world’s largest petrochemical manufacturer by market share—expects to announce a deal to invest in a U.S. petrochemical project by next year. Company CEO Mohamed Al Mady said, “Our strategy is to expand production by utilising the most feasible feedstock [raw materials] we have at the moment, and that is U.S. gas.”

Kevin Swift, ACC’s chief economist, said the low-cost gas products resulting from the shale revolution is “the greatest thing that’s happened in this industry in 75 or 80 years, going back to when nylon was developed.”

Frackers have turned America once again into a land of opportunity. Let’s encourage Americans to recognize the life-serving nature of these great producers—and to demand that government leave them free to produce.

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Posted in: Business and Economics

Jobs Celebrates Man Who Put a Dent in the Universe

Fittingly, Jobs opens with Steve Jobs receiving well-earned applause from Apple employees for the release of the iPod, a device that would, as Jobs predicted, revolutionize the music industry. Music is just one of several industries Jobs would revolutionize over the course of his career. Although it strays from essentials at times, the film, starring Ashton Kutcher, is a stirring tribute to Jobs.

Jobs follows its namesake from his time at college to his triumphant return to Apple, focusing on three key achievements of Jobs’s career. Each of these victories highlights Jobs’s ability to recognize and encourage talent, negotiate fruitful deals, and inspire the people with whom he does business. The three achievements are:

First, seeing the enormous potential for computers with video interfaces, in 1976 Jobs put together a business to sell the Apple computer board developed by his friend Steve Wozniak.

Second, after attracting capital based on the success of the first Apple, Jobs brought Wozniak’s Apple II to market in 1977. The machine was a stunning success and brought fame and fortune to Apple.

Third, after Apple floundered with the Lisa and early Macintosh computers and company executives pushed Jobs out of the company in 1985, Jobs returned to Apple in 1996 to bring the company to new heights.

Some of the best moments of the film involve the characters speaking about their aspirations. For example, when Jobs first learns of Wozniak’s computer, he exclaims, “This is freedom to create, and to do, and to build, as artists, as individuals.” Upon Jobs’s return to Apple, industrial designer Jonathan Ive tells him:

The computer, or the walkman, or whatever it may be, should be a natural extension of the individual. And it’s that mission, that devotion to quality and ideals and heart—that’s what keeps us here. That we might do it once more.

The film ends with a touching rendition of “The Crazy Ones,” an ad originally read by Jobs. Jobs says that those sometimes considered crazy “change things; they push the human race forward.” He continues:

While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

Kutcher gives an outstanding performance as Jobs (complaints of some critics notwithstanding), nailing even the facial expressions and gait of the man. Other fine performances include those of Josh Gad as Wozniak and J. K. Simmons as an Apple executive.

Overall, the film ably tells much of the story of Jobs’s remarkable career and does so in a way that shows due respect to Jobs. Unfortunately, the film occasionally strays from its main focus, overemphasizing some elements of Jobs’s life and ignoring some important elements.

The film spends too much time on Jobs’s college “career” (he dropped out), his international travels, and especially his personal flaws (such as the fact that he sometimes treated his friends, lovers, and employees badly). The film could have reduced its attention to such personal details and focused more on Jobs’s productive achievements—without which there would be no reason to make or watch a film about the man.

The film spends little time showing how the Apple II became such an astounding commercial success or how it improved people’s lives. The film also totally ignores Jobs’s work with the Pixar film studio, and it only briefly mentions his work with the NeXT computer, which was critical to his return to Apple and to the subsequent success of the company. Although a biographical film must be selective in what it covers, Jobs could have covered more of what matters about Jobs if it had focused more on the essentials and pared away the nonessentials.

Despite the film’s flaws, it is a deeply moving and inspirational account of Jobs’s life. It shows how Jobs sought to make a “dent in the universe”—and proceeded to do so.

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Posted in: Science and Technology, The Arts

ObamaCare Contraception Mandate Violates Rights of Non-Religious Too

On the last day of 2013, Supreme Court justice Sonia Sotomayor temporarily blocked the ObamaCare provision “forcing some religious-affiliated groups to provide health insurance coverage of birth control,” the New York Times reports. But the debate as the media typically present it misses an essential point: The contraception mandate violates the rights of non-religious people, too.

Advocates of the mandate treat contraception as a right, which implies that some people must be forced to pay (in this case through insurance premiums) for contraception used by others. But there is no “right” to force people to provide you with goods or services. Rights pertain an individual’s proper freedom of action in a social context, not to a government-granted ability to seize people’s wealth.

Religious opponents of the mandate claim that forcing them to provide health insurance covering contraception violates their religious liberty—and they are right. People have a right to believe irrational things, such that a supernatural entity—for which there is no evidence and whose existence defies logic—forbids the use of contraceptives. People also have a right to act on their beliefs, so long as they do not violate the rights of others. Religious groups have a right to contract freely with individuals, which means (among other things) that they have a right not to offer or pay for insurance that covers contraception.

But the fundamental political debate is not between those who advocate forced wealth transfers for contraception and those who oppose such transfers on religious grounds. Rather, it is between those who advocate individual rights and those who do not. Yes, the ObamaCare contraception mandate tramples religious liberty. But, more fundamentally, it violates people’s rights to control their property and to contract freely.

For example, my wife and I don’t use contraception and in any case don’t want to buy insurance for it, and we have a right to use our money as we see fit and to seek insurance that does not cover contraception. (Our reasons are not religious but financial.) And health insurance companies have a right to offer policies that don’t cover things such as contraception.

Just as religionists have a right to believe irrational things and to act on those beliefs, so my wife and I have a right to believe rational things—such that we don’t currently need contraception and that insuring it is imprudent—and to act on those beliefs.

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Image: Wikimedia Commons

Posted in: Health Care

Happy New Year!

Happy New Year, everyone! Thank you for your business and support in 2013.

All of us at TOS wish you a productive and prosperous 2014.

Keep fighting the good fight and living great life. The future is ours for the making.

Forward!

Posted in: Announcements

Peter Thiel’s Fellowship Cultivates the Entrepreneurial Spirit

Peter Thiel, who founded PayPal in 1999 and sold it to eBay for $1.5 billion in 2002, knows something about entrepreneurship. Among other things, he knows that entrepreneurs do not always need a college degree to succeed—for example, Steve Jobs, Bill Gates, Michael Dell, Ralph Lauren, and Mark Zuckerberg dropped out of college—and he knows that the skills necessary for successful entrepreneurship can be learned by engaging directly in business.

Toward cultivating these skills in entrepreneur-minded youth, Thiel launched a fellowship program a few years ago, with some radical initiatives. As the Wall Street Journal reports:

One highly scrutinized foundation initiative, known as the 20 Under 20 Thiel Fellowship, asks potentially college-bound teens and undergraduates to reconsider higher education and drop out—at least for a time—to learn by doing, especially by forming companies with a change-the-world objective.

In its third year, the fellowship has already granted its $100,000 prize to 64 winners who have “started 67 for-profit ventures, raised $55.4 million in angel and venture funding, published two books, created 30 apps and 135 full-time jobs.”

Knowing that putting money in the hands of creative people can help them develop revolutionary products, Thiel invested in “startups—including LinkedIn Corp., Yelp Inc., SpaceX and Yammer—that had been formed by PayPal co-founders and employees.” He was also the first outside investor in Facebook.

Thiel stresses that the source of all innovation and a mark of successful entrepreneurs is independent thinking:

One thing I ask fellowship candidates to do when I interview them is to tell me something true that nobody agrees with them on. The business version of this is: “What is one great business that nobody has built?” I think they should all try to find a problem that nobody else is solving. Do not find a conventional problem that many people are working on. Find one that nobody is working on.

Kudos to Thiel for fostering such virtues in today’s youth. And keep an eye on the young entrepreneurs involved in his programs. If their motive is profit and their MO is independent thinking, many of them will be hugely successful.

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Image: Wikimedia Commons

Posted in: Business and Economics

Fracking Massively Fuels Growth in U.S. Chemical and Manufacturing Industries

Over the past few years, producers in the chemical and manufacturing industries have rapidly expanded their output, thanks in large part to the raw materials and energy sold to them by producers using the methods of horizontal drilling and hydraulic fracturing (fracking).

Frackers not only help provide inexpensive energy to chemical manufacturers (electricity in America costs about half of what it does in Europe and Asia), they also provide natural gas liquids (such as ethane) that chemical manufacturers use to make a wide range of products including plastics, elastomers, textiles, solvents, glue, fuel, paints, insulation, perfume, chewing gum, plastic wrap, pesticides, and agricultural fertilizers.

And not only do virtually all Americans use such products every day, U.S. producers sell their goods abroad as well. U.S. chemical producers export $187 billion of goods every year, accounting for around 12 percent of total U.S. exports.

Prior to the fracking revolution, the U.S. chemical industry was in decline (as were many other sectors of the economy). Just five years ago, the U.S. was on the verge of becoming a net importer of chemicals, “but today, chemicals are once again America’s single biggest export—larger than agriculture, automobiles, and aerospace.”

The chemical industry enables or contributes to the success of practically every other form of manufacturing, and, by extension, so does the fracking industry.

Frackers help create an abundance that all enjoy but few appreciate. To the degree they are free to operate, profit-seeking frackers produce enormous wealth and enable the production of much more.

Here’s to the frackers and the multitude of companies that turn the energy and materials provided by frackers into the goods and services we need to live and prosper.

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Posted in: Science and Technology

A Pretend “War Against Christianity”

Recently Bill O’Reilly interviewed Southern Baptist megachurch pastor Robert Jeffress about the alleged “War on Christmas” and “War on Christianity.” Jeffress said:

[T]he war on Christmas is real, but, Bill, it’s a part of a larger war against Christianity that’s being waged around the world. And, yeah it’s true, we are not suffering in the same way as Christians who are being martyred in other countries. Not yet, anyway, but make no mistake about it. This is all part of the same war and we’ve got to push back against it on every front.

So what is going on in America that Jeffress compares to the slaughter of Christians elsewhere (such as the Christmas day murder of 37 Christians in Iraq)? Notably, neither O’Reilly nor Jeffress provided any evidence of a “war against Christianity.”

The single court case that Jeffress mentioned, the “Christian Candy Cane” case (Morgan v. Swanson), involved a student handing out cards proclaiming “Jesus is the Christ” in a tax-funded, government school. Preventing a student from proselytizing in a government school is hardly waging a “war” against his religion.

Jeffress further said that, not only is Satan behind the war on Christianity, Satan is also behind the denials that such a war exists. There can be no rational discussion with such a man, who imagines demons behind every statement of which he disapproves.

Jeffress’s nonsense aside, disagreement is not the same thing as war, and a government that declines to promote a particular religion does not thereby persecute that religion.

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Image: Gage Skidmore

Posted in: Religion

Gene Therapy Scientists Play God, Attack Cancer, Win

As I mentioned in a recent post, medical researchers are revolutionizing healthcare through personalized medicine based on knowledge of the individual’s genetic makeup. In one instance of this advancement, according to the Associated Press, “doctors are reporting unprecedented success by using gene therapy to transform patients’ blood cells into soldiers that seek and destroy cancer.” The therapies are scoring “stunning results” against “many types of blood and bone marrow cancers.” (As the Mayo Clinic explains, “Gene therapy . . . involves altering the genes inside your body’s cells to stop disease.”)

In a study conducted at the University of Pennsylvania,

all five adults and 19 of 22 children with acute lymphocytic leukemia, or ALL, had a complete remission, meaning no cancer could be found after treatment, although a few have relapsed since then.

These were gravely ill patients out of options. Some had tried multiple bone marrow transplants and up to 10 types of chemotherapy or other treatments.

Cancer was so advanced in 8-year-old Emily Whitehead of Philipsburg, Pa., that doctors said her major organs would fail within days. She was the first child given the gene therapy and shows no sign of cancer today, nearly two years later.

This study (one of six that combined involved over 120 patients) and the science behind it show the awesome power of the reasoning mind to save and improve people’s lives. These men and women of the mind are literally altering individuals’ natural biological makeup. They are “playing God” and making people better—by making better people. Praise be to them.

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Posted in: Science and Technology

$38 Tablet Shows Beauty of Capitalism

Although the moral justification for capitalism is not that it helps the poor—but that it protects the rights of all—a major consequence of capitalism, where and to the degree it is legalized, is that it lifts people out of poverty. One area in which this can be readily seen is the rapidly advancing electronics industry.

A century ago, electronic computers did not exist. Half a century ago, only large corporations and wealthy governments could afford computers—and those computers had only a fraction of the power of today’s pocket machines. A few years ago, only solidly middle class households could afford tablet computers. Now, Datawind has announced that it plans to sell $38 tablet computers in the U.S. market, reports the Wall Street Journal.

The company’s CEO, Suneet Singh Tuli, said, “Affordability shouldn’t be the reason people can’t get on the Internet. We want to specifically reach a customer base that right now is not on the Internet.”

Obviously, the low-cost tablet will not have the capacities of today’s higher-end machines. It will feature a processor with a speed of “only” one gigahertz—comparable to the first-generation iPad of 2010, the Journal notes, and a thousand times faster than the Commodore 64 popular thirty years ago (and it has a flash memory capacity of “only” four gigabytes). But it will run popular software applications and connect to the internet.

Although Datawind sells tablets to government for use in welfare programs and thus does not operate in a purely capitalistic market, developers advanced the technology now used in tablets in a relatively free market, and Datawind’s entry into the U.S. market represents a wonderfully capitalistic opportunity for those on a tight budget to incorporate tablet technology into their daily lives.

Once again we see that capitalism is good not only for the rich but for everyone.

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Posted in: Science and Technology

Happy Holidays

Posted in: Announcements