Redemption is a very human process through which those who have erred renew their social value through acknowledgment. reflection and revealed learning. It is a process through which people of recognized value to society who have failed in their social responsibility regain their ability to contribute. It confirms that error does not discredit all that one knows and understands, provided error is seen and understood.

For at least twenty years, the economics profession enjoyed a kind of triumphalistic hegemony in policy that permitted no dissenters. While it was disturbing and frustrating to those with practical knowledge, it was hard to fight. The profession expressed such certainty and such superiority as to make disagreement intolerable. It was a time of a kind of intellectual hegemony.

We can now see that its knowledge claims were essentially ideological, based on beliefs that defined what was correct thinking and what was not. Markets were efficient, Keynesian economics wrong, monetary rules and inflation targets the only possible macro economic goals, regulation useless and unnecessary, welfare social madness, and government action sure to fail due to rational expectations. Dissenters from these views were not only wrong, but apostates. They must be and were systematically discredited and pushed to the margins.

I well remember moderate views like mine on these matters being subject to condescending disdain by the very economists who work in the institution I am now part of. While I never subscribed to the classical left views, this was not enough. Moderate views were taken as a failure of intellectual rigour. A commitment to markets, deregulation, and smaller government were not just truth but character tests.

Many have paid the price for the monopoly these views gained over policy. The recent economic disaster need not have occurred had the views of economists been more moderate, reasonable and balanced, and had they not abandoned a once vigorous commitment to observation and science. For many of us, the question is whether there is any real reflection about and review of these views by those in the profession.

So far there is little evidence of regret or even error on the part of the profession. The smartest and the brightest have begun to try to understand why government action was necessary and is now working, but most are largely defensive and in denial, stuck in their old ways of thinking. That is regrettable. While it is perhaps not surprising that the process of redemption and renewal is beyond the reach of most people who so over-reached themselves, it is surprising that few in this profession have even ventured to begin the process. It suggests that this once honourable profession is incapable of confronting its own failures. Without that, it is almost sure to never regain its once dominant position in public life. Redemption is beyond its reach. Which is not uncharacteristic of those who succumb to ideology. Sad but true.

The Vancouver Sun profiled Premier Gordon Campbell on Friday in Denmark endorsing not the Copenhagen Accord, but the Danish policy of subsidizing private wind power at the expense of taxpayers. He claimed that Denmark sets an example for us if we want to develop clean energy. And indeed it appears that his government has been in many ways following the Danish example. Unfortunately, neither he nor his advisers appears to have taken the time to discover how wrong the Danish approach has turned out to be and how costly it will be to Danish taxpayers.

Campbell wants to develop privately owned small hydro and wind power to produce something in the order of 20% of the energy produced in BC. Similarly, Denmark set out a few years ago to have 20% of its electrical energy capacity in the form of wind. While Campbell’s initiative is still getting started, Denmark’s has been underway long enough to draw some conclusions. And they are not encouraging .

Denmark has now pays for about 19% of its electrical capacity in the form of wind power, but in reality only about 2% of its electricity consumption has turned out to come from it. In the course of getting to this point, the government signed contracts with private wind producers at guaranteed prices well above the average market prices for electricity, arguing that this was necessary to meet the extra costs of clean energy. The results of this program are now clear. The problems are almost exactly those that I and others have argued will accompany the Campbell policy in BC.

The biggest and most obvious problem is that the electricity produced by wind has seldom been produced when it is needed by the system. Wind as we all know is highly variable, both within any given week and seasonally. Electricity consumption is also variable, by time of day and season. But these two types of variations are hardly ever in synch. Far too often when peak electricity is required from the windmills, there is little or no wind to provide it. So the electricity has to be acquired from outside Denmark because no cheaper alternate sources have been developed in Denmark. The affect is that the government must pay a premium for electricity, usually from dirty sources, at a large loss to Danish taxpayers Other times, like at night or in the summer and fall, there is plenty of wind energy, but lots of hydro power is available cheaply because consumption has dropped (at night) or because hydro dams are full and river runs high (summer and fall). At these times the government must still buy the high priced wind power it contracted for, but it must turn around and find find buyers outside the country at deep price discounts. The affect is that the government incurs a large loss that has to be paid for by taxpayers.

Experience has established that the wind producers are in fact able to supply only about 2% of the demand for electricity on a reliable and continuing basis, rather than the 19% that is being paid for. The losses to the government and taxpayers are becoming so large that the government is now looking at developing the capacity to make up the missing 17% with new hydro and gas powered plants all at a large additional cost to the government. And it is stuck with buying all of the unreliable wind energy at inflated prices under the contracts in place and selling that energy outside the country at a large loss.

The overall result has been that developers of the private wind power have become wealthy at taxpayers expense as large amounts of money have in affect been laundered through the energy supply system into their private coffers. Taxpayers and energy consumers are the big losers, while the climate in the end has gained virtually nothing.

This is exactly what many of us have argued will be the result of the energy policy being forced on BC by the Campbell government. It is the result that the BC Utilities Commission tried to avert with its ruling earlier this year. The Cam.pbell government has now used legislation to overturn that ruling. It will press ahead with highly subsidized private hydro power that is supposed to replace the part of our energy supplied by natural gas during periods of low water flows. But this it can not do, because the private power producers will have no power to produce at these times. They will only have power when BC Hydro already has more than enough to supply BC. So it will have to sold outside BC as surplus at a large loss to BC Hydro.

I have suggested that since this whole system essentially involves a non-earned transfer of billions of dollars from BC citizens to private power producers, and that this result is perfectly obvious to anyone who takes the time to follow the money, the whole arrangement is essentially corrupt. The fact that the whole program has been developed behind closed doors in association with private power producers simply strengthens that argument. Some have objected to this characterization, saying that while it may be bad policy it is not necessarily corrupt. I remain to be convinced. Meanwhile, it is perhaps worth noting that on the very week that Campbell profiled the Danish program, investigators in Denmark commenced a corruption investigation into the arrangement there. Perhaps a closer look at what is happening here in BC is warranted after all. Especially since the BC program is almost a total replica of that of Denmark.

The true dimensions of the economic crisis of the last year is becoming clear as we see western countries set out their budgets for the coming year. Yesterday both Ireland and Britain set out what the future means given the events of the past 12 months. Ireland was once the economic miracle known as the Green Tiger. For years it pursued an aggressive economic agenda that included deep tax cuts, virgorous monetarism, radical deregulation of banks and other large economic players, and the pursuit of a knowledge based, high tech economy. It cut its university tuition fees to zero and invested heavily in technological industries. For over a decade it was credited with having achieved an economic miracle. Alas it all came apart as a result of its deep policy flaws. Many neo-conservative economists, now cowering in academic and university think tanks in shock as their deeply ideological agenda lies in ruins, once held Ireland up as a model. Yesterday, the Finance Minister in Ireland admitted that things are bad. The media report ’savage cuts to save the ailing Tiger’. Economic growth will fall 7.5% this year, compared to 4.5% for the UK. The budget deficit will run to 14%, an unheard of level anywhere a few short months ago. There will be huge cuts in public sector pay and benefit entitlements. The public debt is exploding and the currency is hovering on the brink of collapse. The banking sector is in crisis and with it this once proud nation. While the Finance Minister promises better for the future in typical political double talk, there is genuine fear that the country may be headed to become a second Iceland, which is wallowing in economic disaster. Both countries remind us of the havoc economic and financial advisors created with their aggressive rush over the years to push small countries to become laboratories for untested and dangerous economic ideas. Anyone familiar with the role of these people can see the horrific damage that results when ideology rather than knowledge and facts drive the agenda. It is hard to believe that a single group could wreck so much havoc with so little sense of responsibility or intelligence. Ireland and Iceland are two examples of the dangers of getting caught up in the unsubstantiated claims and beliefs of unaccountable experts taken over by beliefs rather than science. It is doubtful whether the economic profession’s credibility can ever be restored. Just as in eastern Europe and Russia where Marxists economist did the same thing years ago, few who pushed the disastrously mistaken ideas that became the mainstream of prevailing economic beliefs have expressed any remorse or acknowledged how wrong they were. Perhaps a life-long banishment to Iceland and Ireland would be in order in the absence of some contrition for the bill of good the poor citizens of those countries were sold.

Britain experienced some of the same ill affects of bad advice from a ill educated economics profession. However Britain will be experiencing only a 4.5% drop in GDP this year, which is much more manageable. Britain has also under more robust and informed political control and thus averted some of the most disastrous of the affects of economic mismanagement. And the British government has announced that its budget measures will be more in keeping with the traditions of sensible economics. Revenue measures will see increases in income, payroll and sales taxes, a punishing claw back of bank bonuses over $40,000 (thank goodness some government has stepped up to plate and put a stop to these economy wrecking practices that contributed so much to the mismanagement of bank finances and the necessity of huge bail outs of backs), and cuts in spending while at the same time increasing pensions, child and disability benefits, and free school lunches. Government borrowing will increase a modest 3 billion pounds. This will be a budget of sensible ideas and sound management. As proof, the currency markets have responded positively, and the stock market has provided a vote of approval.

With an election coming in the next few months the right wing press has nevertheless but as expected gone ballistic. Not for it any learning form the past mistakes. Fortunately Prime Minister Gordon Brown has responded with a calm determination to avoid the excesses of the past. Indeed Brown has been the key sane voice at the top of governments in the west. He was the world leader in calling for a coordinated economic rescue package that has prevented world wide disaster. He was the one who insisted the bank crisis had to be aggressively dealt with. And he is perhaps the only leader who is prepared to risk telling the truth on taxes – namely that countries must pay their way over the longer hall, and that the promise of free lunches through big tax cuts for the well off is just more of the ideologically extreme pandering to the special interest making up the wealthy, largely business class (such as we have and continue to practice in BC and Canada, and which is still promoted by many economists including some of my own colleagues. Oh my, how hard it is to see the truth when taken with blind ideologies).

The sad thing about Britain is that the Prime Ministers’ honesty and economic competence will likely go unrewarded in the soon to be held election. The large right wing press is going ballistic about the higher taxes and increase in basic benefits. A perfectly manageable public debt is being painted as the height of mismanagement. It is mostly politics. But there is still a yearning to return to the bad old days when economists and much of the media largely shilled for disastrous policies that led to certain destruction. It is discouraging to see. Perhaps the Prime Minister will prevail in getting this basic message across about responsible economic management, but it is hard to be optimistic. Ideologically driven ideas and interests die slowly if ever, perhaps because there is still a hope that that will serve the interests of those who got rich under the old discredited policy regimes. Special interests never give up. Time will tell whether they will prevail in the face of all that is so obvious about past failings. The British election will be a good test.