For Britain to hope that the exploitation of a natural resource would rescue its ailing economy seems to me like a man who purchases lottery tickets in the hope that they will secure his old age…What would we do with our large revenues? It is not necessary to be Nostradamus to imagine. At least one government would use this free gift of Nature (give or take the costs of extraction) to increase the size and emoluments of the so-called public service, and also the generosity of welfare payments..
As for industry, something rather similar would probably happen. Cheap energy would obviate, at least to a degree, the need to become more efficient; it could (and I think would) be used to maintain wages that would otherwise not be justified and to avoid the necessity for innovation and adjustment. It would allow cheap imports and thereby raise not just the standard of living without concomitant effort, but permanently raise expectations. If the cheap energy were exhausted, the supposedly “healthy” economy would very soon stand revealed as a painted corpse.
Pasteur famously said that chance favours only the mind prepared, that is to say a mind that is alert, knowledgeable and flexible enough to realise the importance of phenomena that it happens upon by chance. In the same way, one might say that gifts of Nature, in the form of resources, favour only an economy prepared. The United States still has an economy so prepared; the United Kingdom has not.….Naïve people often allude to the supposed paradox of African countries richly endowed with natural resources that nevertheless remain deeply impoverished. This is not a paradox at all: with the wrong institutions, the wrong ideas and the wrong culture, such resources can be a curse rather than a blessing, increasing in stability as the political fight over those resources becomes more desperate or acute, and undermining other productive activities. In the same way, incidentally, an educated population, if it is educated in the wrong things, imbued with the wrong expectations, is a curse rather than a blessing…[E]xperience has taught us to have no real faith in the future of our country. We are no longer a nation of shopkeepers, but a nation of political manipulators, whose main hope of betterment is a larger slice of whatever cake exists in the present moment.