There is a great divide between rural and urban. Wind energy is the latest issue to expose this gap. Urban dwellers see wind energy as a solution to high energy prices and a clean alternative to fossil fuels. Rural folk see wind energy as another thing city folk are going to try to take without paying for. They are both right, but there is much more to it than that.
The friction between city and country is both ancient and modern. Cities have always obtained their resources from the surrounding hinterland. Under the right circumstances, the flow of goods from the country to the city is a mutually beneficial arrangement. History provides an example of such circumstances in ancient Athens.
The city of Athens was defended by heavily armored infantrymen called hoplites. By and large they were independent farmers who had produced the surplus necessary to accumulate wealth, and with that wealth they bought their shield, spear, helmet and other necessary garb for making war so that they could protect their land from invaders. The city folk of Athens who bought the surplus were freed from the struggle of growing their own food. They devote their time and talents to other pursuits, and in doing so, they built the intellectual framework for western civilization.
Under the wrong circumstances, the flow of goods from country to city is slavery. A short distance from Athen was another Greek city. Sparta consisted of an elite class of professional soldiers. Among these Spartans there was a degree of equality and meritocracy, but all others were subservient. The Spartans had conquered and enslaved their neighbors, the Helots who produced the food, so that the Spartans could devote themselves to preparing for war.
Athens and Sparta provide a useful pair of weights against which to measure modern American cities’ relationships with the country. The circumstances in the United States are much more like Athens than Sparta, but there are elements of both, and the similarities to Sparta are worthy of our contempt.
The cities in the United States mine the countryside for all types of resources — food, oil, gas, coal, water, railroads, highways, labor, and talented young people. All of these things are more valuable in the city than they are in the country, because there are more people and more money there with which to buy them.
Urban companies send men to entice the relatively poor rural folk to part with their resources for as little money as possible, so that the resources can be sold in the city for as a high a price as possible. Done under the proper circumstances, this can be a mutually beneficial arrangement. We might even think of it as the American way. Under other circumstances, this exchange ends up being only a little better than fraud.
Rural people act as if they expect fraud. Unfortunately, they are not well-equipped to prevent it. The company men who come to negotiate are skilled salesmen, and they have a bag of tricks prepared by lawyers and sales consultants after market research and legal research that a farmer would not even imagine. What’s more, when the company man arrives, he looks and sounds like “an old farm kid” (one of the highest forms of praise by a rural person for a city dweller). With the arrival of a skilled company man, the die is cast. The company man tells the rural landowner: (1) “I have done this hundreds of times and this is the deal everyone gets”; (2) “I will treat you like a friend and make sure you get what you have coming”, and (3) “if you say ‘no’ it will be bad for you and your community, and it will be bad for me.” Chances are, the company man actually believes what he is telling the landowner, so it isn’t possible to say that the company man is untruthful. And the landowner simply does not have the resources to fully research the matter, in part because the facts related to the company man’s puffery are carefully guarded trade secrets. The result of this unequal negotiation is exploitation.
In the context of wind energy, the methods of exploitation are the same as they have always been, but they have new forms. First, the energy companies want to lease the “wind rights.” They could seek a surface easement for the purpose of erecting a wind mill, but that isn’t enough. They want the exclusive right to generate wind energy from the property. Second, they want to acquire the wind rights before they tell you where, or if, they will actually erect a windmill on your property. If they do not erect a windmill on your property they want the right to drive across the property to travel from a windmill on oneside of you to a windmill on the other side of you. For this right they expect to pay a few thousand dollars a year, in the event they erect a windmill on your property. This is an arrangement which can be obtained only because the energy company has a great deal more information than the people with whom they are dealing. If the rural landowner had the benefit of their own legal research, market research, salesmen etc. the contractual arrangement would be very different.
This imbalance of information is very important for reasons of neoclassical economics. This is the theory of economics which, for the past century, has driven development of every American industry and world trade. This theory holds that we will all benefit most through the workings of a perfect market. One of the requirements of a perfect market is that all the buyers and all the sellers have equal access to information. When a market is imperfect because there is unequal access to information, there are inefficiencies and we don’t get as much benefit as we could. Thus, in the context of wind energy, due to the unequal access to information, we are developing wind energy in a very imperfect market with lots of inefficiency.
One way, to improve the workings of this market, and the development of wind energy is to improve the rural landowners’ access to information. There are at least three ways this could happen. First, the preferred response to this situation is a market response. Entrepreneurs who realize the value of information will provide information to land owners in exchange for compensation which is less than the value of that information to the land owner. Second, land grant universities, which are ground in neoclassical economics are created to develop and disseminate information precisely for this reaosn. Third, altruism could cause private concerns to fund the development and dissemination of such information because it will improve the working of the market and the overall efficiency of the wind energy industry.
Of the three alternatives identified above, not one of them is promising. Entrepreneurs try to devote their time and talents to business ventures with high probabilties of success and few obstacles. Helping rural landowners negotiate for more value from energy companies is like tilting at windmills. (Pardon the pun.) The land grant universities have, for the most part, drifted far from their mission. Now they concentrate on athletic spectacles, doing research for multinational companies and having professors publish articles that noone reads. Finally, the only relevant example of private dissemination of information is the Picken Plan which does not appear to be altruistic.
From the perspective of a lawyer who represents farmers, wind energy will not provide a boon (again, pardon the pun) to the rural economy or to any individual land owners. It will make the countryside less inhabitable because noone really wants to see or hear the windmill that provides energy to city folk far way. For the farmer who lease his wind rights, he will lose a significant part of the value of his land because it will always be less desirable than the land that is not a part of a wind farm. Finally, the Sad Sack in this episode is the farmer who did not lease his wind rights. He gets to see the wind farm. He gets to hear the gentle woosh woosh, like Chinese water torture. And he gets no benefit from the fact that the city dweller sleeps more soundly because he thinks he has done his part to save the polar bear. That, I think, is why farmers don’t like wind energy.