Pilot LTE: Climate Action


Editors who allow tax schemes to be called “free market solutions” should be humanely euthanized.

19 thoughts on “Pilot LTE: Climate Action

  1. The Energy Innovation and Carbon Dividend Act is not a free market solution, it is a market distortion. It would artificially raise the cost of energy and marginally stimulate consumption. This can only result an increase in demand for goods imported from other countries while driving manufacturing overseas.

    There is only one atmosphere. If we drive production out of the US with artificially high energy costs, it does not mean the production does not happen, it just happens in China instead, where they are far less concerned with pollution of all kinds. .

    The result can only be a poorer US and a net decrease in the quality of the environment.

    Politicians should stop trying to manipulate markets at least until they actually understand them(and if they truly understood them, they wouldn’t try to manipulate them.)


    1. Completely free markets (like pure capitalism) will never voluntarily seek to insure the common good. Even though it would be beneficial to do so they will both be true to their nature and maximize short-term profit at the expense of the goose laying the eggs.

      Consequently, thoughtful intervention (distortion) will be necessary to moderate their most avarice instincts and insure that the goose continues to live.

      Your last parenthetical (seen on a bumper sticker?) is simply not true.. I’ve spent almost a half a century studying the “markets” and understand the need to manipulate when necessary.


    2. Markets have been manipulated as long as they have existed. Markets and businesses exist for one reason — maximum profit. Governments, on the other hand, exist to provide for public safety and security. The climate catastrophe we have set in motion is inseparable from industrial revolution. The reality of corporate influence on public policy is the biggest obstacle to our doing what we know needs to be done to avoid the worst. Free markets are a delusion that will surely destroy civilization and possibly human existence. Governments must, based on science and irrefutable evidence, regulate products, what can be sold, and fiscal priorities to protect the environment upon which nations and our species depend. Anything less it criminal negligence driven by myopic corruption.


      1. “Markets and businesses exist for one reason — maximum profit.”

        Nope. There is your problem, you fundamentally misunderstand free markets.

        Markets exist to provide maximum value.

        Businesses cannot increase their profit by providing less value. If they tried, you would just buy from a competitor instead. The only way to increase profit margin is to produce your goods more efficiently, and then only until your competitors do the same. That is why every thing you buy not under government control goes down in real price.

        As an extreme example, the cost of reading light, in terms of hours worked per hour of reading, is 500,000 times less than when people read by candle light. Everything you buy from free markets is cheaper ow than 20 years ago, except those things, like education and health care, which are dominated by government control.


        1. “Markets exist to provide maximum value.” Ha, you made a funny. Ever heard of functional obsolesce or maybe noticed that things you buy are increasingly shoddy? Value? Maybe cultivated desire. What your espousing may have been true a century ago but in the present, corporations increase their value though cultivated perceptions via advertising and stock market games.


          1. Of course competition in a free market will increase quality and reduce production costs and that is why free markets are so important. It is also why any action taken to reduce the degree of freedom must be measured and appropriate to the particular abuse. Examples include child/slave labor, unsafe working conditions, environmental damage; it’s a long list. The type and degree of intervention has always been the ultimate “sticking point”, but it is a necessary activity.


          2. How much market intervention by government is needed or useful? Libertarians assert that government has a duty to exclude force and fraud(including the imposition of external costs) from the marketplace and otherwise leave people free to trade voluntarily among themselves.

            Whenever government goes beyond that to attempt some subjective public good, the unintended consequences invariably produce a result inferior to what the market would have provided.

            Child labor, for example, was not banned until rising productivity, making it possible for a working man to support his family on his earnings alone, made it unnecessary. In those parts of the world where productivity lags, child labor is still the standard. .


          3. Guess that’s why I’m not a Libertarian. As to “unintended consequences invariably produce a result inferior to what the market would have provided.” Naw, that’s party propaganda. I’m not asserting it doesn’t happen, but blanket statements to make a point only weaken it.


      2. I’m skeptical of the Pigovian thesis that markets fail to account for externalities. Acid rain is the classic example often cited.

        With acid rain, pollutants originating in one geographically defined market caused property damage in other geographically defined markets. The Pigovian view is that the property damage was an “externality” with respect to the originating market, a cost that market failed to bear as it should.

        But the property damage was real and provable. Had the matter been resolved in litigation, the polluters would have paid the price for it. In fact, a negotiated solution was found, but even that caused the originating market to internalize the value of the negative externality. You could say the externality itself didn’t even exist until it was discovered and processed through negotiation.

        The point is, it makes little sense to claim that free markets are flawed because they don’t automatically mitigate every conceivable consequence of commerce or cannot price relevant expenses, when known.

        Markets exist because people engage in trade. My challenge to Pigovians is to show that externalities actually exist in a material sense and not just as an excuse to meddle with human behavior.


  2. Every governmental attempt to control pollution and protect the environment is “market distortion” because the “free market” will NEVER internalize any costs it can externalize. Period. Human activities are destroying the global environment that we all depend on. The only open question is how long will it take if no action is taking. The kind of anachronistic a priori economic thinking that you exhibit is at best irrelevant and at worse damaging.

    Liked by 1 person

    1. It is quite true that resolving external costs can be a legitimate reason for intervening in a market, but only if it can be done for all players.

      Trying to capture external costs only in the US, or only in Virginia, as Gov Northam is attempting, simply changes where those costs will be expressed. It does no good to drive the production of a locomotive or a bulldozer from the US to China, the CO2 associated with its production winds up in the atmosphere anyway and the distortion of the market only harms US workers and China doesn’t control other kinds of pollution that we do, so the environment suffers a net harm.


      1. RE: “It is quite true that resolving external costs can be a legitimate reason for intervening in a market, but only if it can be done for all players.”

        I see the logic, but how often is government wise enough to intervene for all players in the best way?

        I’m evolving more and more to the hardline view that government should NEVER intervene in markets, even to serve idealistic notions of the greater good. It’s OK for government to perform as an honest broker of technical or scientific knowledge, and it is necessary for government to operate a justice system, but for everything else the law of the jungle is the best approach.


          1. Free markets are not the law of the jungle in any case.

            In a free market, all transactions are voluntary and don’t take place unless both parties see a benefit.

            Only if government fails in its duty to exclude force and fraud do we see the law of the jungle.

            But as soon as government exceeds that duty and starts to select winners and losers in the marketplace, corruption and cronyism are inevitable.


          2. RE: “Free markets are not the law of the jungle in any case.”

            I take your point, but I think it is idealistic for two reasons:

            Even where most transactions are voluntary, competetion and everything competition implies is not.
            Government’s capcity to exclude force and fraud from all human interactions is severly limited.

            So, like it or not the tiger and the lamb have to try to live together, using whatever resources they can muster to survive.


      2. This logic seem short sighted.

        Because we can’t prevent little children from peeing in the public pool then let everyone do so and save costs by not providing rest rooms.


  3. Your whole argument is based on a fact not in evidence – that a marginal increase in energy costs in VA or in the USA will drive business elsewhere. That is what happens when you indulge in a priori thinking treating key facts as postulates.


    1. Sure, so increasing the cost of energy step wise year after year is going to have no effect on manufacturing in your world?

      If you really believe that, you should join Paul Krugman in the business of predicting the stock market.


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