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Latest post 08-10-2008 6:12 AM by jamesjames_95. 5 replies.
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  • 08-09-2008 11:57 PM

    Cost to society

    Hi. I am an economics student that has recently been exposed to all of the wonder that is Freedomain Radio, and in particular the two anarchy books. There’s one problem I just can’t shake and it would be very helpful if anyone has an answer, and it goes like this:

    Market prices can fail to reflect the negative costs imposed on society. The cost of a can of hair spray containing fluorocarbons doesn’t reflect the effects on the ozone layer, and the price of a litre of petrol doesn’t reflect the costs of dirtier air and traffic congestion. Building a new hotel complex in a tropical rainforest may be good for the local tourism market, but the cost to society isn’t recognised by the market. The loss of wildlife habitat, trees and vegetation are costs that must be paid for by others.

    The solution given to this problem is corrective Government taxes, and so it would tax developers wishing to build in the rainforest, lowering their willingness to build there, and of course saving the planet.

    I would love to hear an alternative

  • 08-10-2008 12:13 AM In reply to

    Re: Cost to society

    jamesjames_95:

     

    Market prices can fail to reflect the negative costs imposed on society.

    The solution given to this problem is corrective Government taxes, and so it would tax developers wishing to build in the rainforest, lowering their willingness to build there, and of course saving the planet.

    I would love to hear an alternative

    Not to default your question, but surely violence agaisnt humans to protect a forest is hardly a solution, right? I believe there are many wonderful examples of voluntary solutions to real problems that affect us, and ofcourse ONLY voluntary solutions are solutions. I am not going to give you an alternative, because well... thats not really the problem with the world right now is it?

    dsheeit

  • 08-10-2008 12:41 AM In reply to

    • megi
    • Top 150 Contributor
    • Joined on 06-13-2006
    • Czech Land
    • Posts 190
    • Philosopher King

    Re: Cost to society

    I'd love to hear a solution too, but I don't think government is a solution at all.

    First of all, violence is bad, mkay. Whisper

    Secondly, negative externalities are costs imposed on third parties to a transaction. You've provided a nice set of examples of that. But for some reason you've put government as a solution, but this does not seem right, because government imposes huge costs on third parties (inflation is one huge example, eroding everyone's savings 10% a year). It sounds like trying to cure cancer by injecting more cancer cells to the blood stream. But I might be missing something.

  • 08-10-2008 1:47 AM In reply to

    • pcrs
    • Top 10 Contributor
    • Joined on 04-01-2007
    • Houten, The Netherlands
    • Posts 1,860
    • Philosopher King

    Re: Cost to society

    in common law at the beginning of the industrial resolution you had cases where a lady put here wet and clean laundry out to dry and found it dirty and dry the next day. She went to the courts to sue the factory that put the sud on her clothing. The courts ruled that the factory needed to pay copmensation and an indemption was issued, for such cases in the future.

    But at some point the government said: progress is more important then the ladies laundry and abolished this. Britain was the main global power and the US wanted to be, so progress had to get right of way.

    This story illustrates that external costs were better dealt with before the government came along. A good legal system could put a price on every pollution that hit peoples property.

    As for even more grand things like global warming/ozone/acid rain/ rain forest hotels:

    first question? Is it really a problem or just one  of the many schemes from the left to scare people and grab power? Remember that the right scares people with evil terrorists that come to kill you and demand more powers to deal with those. Left people are usually quick to realise this is a scam. Right people more easily realize many environmental scares are scams. Humans have 2 important properties

    1.Protect my loved ones against external threats (more male character)

    2.Nurture the weak (more female character)

    Both instincts are healthy but open to exploitation by both sides of the political spectrum

    If someone wants to build a hotel in the rain forest, can other people use violence to prevent him, because the trees produce their oxygen? In other words:does the breather own the trees that produce his oxygen? I don't think so. It would mean that everyone can put a gun a Brazilians, because they happen to live in the earth's lungs. If we could make forrest protection worth while for them, by offering something in return, that's a different story.

    The only reason the rin forest hotel has value is because there is a rain forest. If they completely fill it up with hotels, no one would come. So they are likely to have bought a whole bunch of rain forest around the hotel, to keep their hotel from loosing value. This seems a good protection for the forest.

    Forresting is also a way to preserve forest. Not the way it is currently done with government leases for a fixed time period, so grab as much forest as you can is practice, but privately owned forest. The owner wants to have a constant stream of income from his forest lands, just like any other investor, so he will replant to make sure his land does not become worthless barren dessert.

    There was a case mentioned by Walter Block once, in which an environmental group found natural gas on their own property. Though there reaction to big oil was always:do not exploit resources, leave nature as it is, they decided in their own case to exploit the resource and use the money to buy up more nature reserve.


    Does this help?

    Violence has nothing with which to cover itself except the lie, and the lie has nothing to stand on other than violence. Any man who has once acclaimed violence as his method must inexorably choose the lie as his principle. Solzhenitsyn, Alexander

  • 08-10-2008 2:16 AM In reply to

    Re: Cost to society

    Very nice post PCRS - I really enjoyed reading that. Very tactful also!

    dsheeit

  • 08-10-2008 6:12 AM In reply to

    Re: Cost to society

    The responses where all very helpful, thankyou. I agree that Government can never be a moral solution. It was more for ammunition against class mates in tutorials, where I can sit down and shutup or mention these things and be thought of as a bit crazy.

    “the only reason the rain forest hotel has value is because there is a rain forest. If they completely fill it up with hotels, no one would come.”

    haha! Thanks, it sounds so obvious as soon as someone else says it.

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