Stephen L. Sass shows how resource scarcity has promoted innovation and advancements in technology and people’s welfare. He says the lesson to learn from history is that we need “something like a Manhattan Project” to address the “harsh reality of fossil fuel scarcity.”

Visiting Fellow Joel Schwartz

But governments have a dismal record in picking technology winners. Billions in federal subsidies haven’t produced any viable alternative energy technologies. Fossil fuels aren’t even particularly scarce--known reserves could last hundreds of years and continue to grow exactly because of the scarcity-driven innovation Mr. Sass identifies.

Recent supply problems result mainly from governments’ market interference, rather than underlying scarcity of the actual fossil fuels.

Innovation results when inventors and entrepreneurs apply their expertise and take financial risks to seek economically viable solutions to real problems. Having central planners spend other people’s money on politically driven pet projects is a recipe for waste.

Joel Schwartz is a visiting fellow at AEI.