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> Having a better environment for businesses boosts profits, not innovation. Of course, but more profits encourages people to create more businesses which crea

> Having a better environment for businesses boosts profits, not innovation. Of course, but more profits encourages people to create more businesses which create more innovation. Sorry, I thought that was obvious.

asgard1024 11y ago
> Of course, but more profits encourages people to create more businesses which create more innovation. Sorry, I thought that was obvious. It isn't obvious at all. In fact, there are some indications that the opposite is true. For example, there are some simple economic models in Blatt:Dynamic Economic Systems where rate of profit and rate of growth are inversely proportional. Also, data from Piketty aren't very optimistic in this sense either (it seems that economic states with lots of private capital correspond to low growth and vice versa).
slgeorge 11y ago
In your parent post you said: "Liberals want to heavily tax fossil and subsidize renewable energy. Problem with that is that taxing fossil make life and the economy harder in the meantime and subsidizing often goes to cronies which is bad for innovation" Something to consider here is that taxing oil production or similar carbon emissions creating isn't really a tax. It's actually just reflecting the real cost of the activity. The problem with these industries is that they have externalities which are not reflected - some of their profits are created by a cost being put onto society. Nobody likes 'taxes', but I think everyone can agree that any activity should reflect it's true cost. Plus, if you step away from climate change for a moment everyone can see that the demands for energy are only increasing. Some of the new technologies around energy generation will be extremely profitable - whole new sectors. The USA has a strong tradition of supporting innovation and then reaping the rewards in private enterprises. So you might consider the "subsidies" as just priming innovation.
- jqm 11y ago
  To that point, if it is indeed true that fossil fuels are heating the planet (most likely), it would be nearly impossible to "tax" (i.e. collect the real external costs of the activity) enough. What is the number you put on rising sea levels and altered weather patterns?
  - the_why_of_y 11y ago
    Some IMF economists' best guess is USD 5.3tn per year. http://www.theguardian.com/environment/2015/may/18/fossil-fuel-companies-getting-10m-a-minute-in-subsidies-says-imf http://www.theguardian.com/environment/2015/may/18/fossil-fu...
  - lukeschlather 11y ago
    Economics is not zero-sum, so the nice thing is that if you change behavior the tax can avoid more damage than the cost of the tax. In the best case the tax is simply not collected and no damage occurs from the pollution.

asgard1024 11y ago

> Of course, but more profits encourages people to create more businesses which create more innovation. Sorry, I thought that was obvious. It isn't obvious at all. In fact, there are some indications that the opposite is true. For example, there are some simple economic models in Blatt:Dynamic Economic Systems where rate of profit and rate of growth are inversely proportional. Also, data from Piketty aren't very optimistic in this sense either (it seems that economic states with lots of private capital correspond to low growth and vice versa).

slgeorge 11y ago

In your parent post you said: "Liberals want to heavily tax fossil and subsidize renewable energy. Problem with that is that taxing fossil make life and the economy harder in the meantime and subsidizing often goes to cronies which is bad for innovation" Something to consider here is that taxing oil production or similar carbon emissions creating isn't really a tax. It's actually just reflecting the real cost of the activity. The problem with these industries is that they have externalities which are not reflected - some of their profits are created by a cost being put onto society. Nobody likes 'taxes', but I think everyone can agree that any activity should reflect it's true cost. Plus, if you step away from climate change for a moment everyone can see that the demands for energy are only increasing. Some of the new technologies around energy generation will be extremely profitable - whole new sectors. The USA has a strong tradition of supporting innovation and then reaping the rewards in private enterprises. So you might consider the "subsidies" as just priming innovation.

jqm 11y ago
To that point, if it is indeed true that fossil fuels are heating the planet (most likely), it would be nearly impossible to "tax" (i.e. collect the real external costs of the activity) enough. What is the number you put on rising sea levels and altered weather patterns?
- the_why_of_y 11y ago
  Some IMF economists' best guess is USD 5.3tn per year. http://www.theguardian.com/environment/2015/may/18/fossil-fuel-companies-getting-10m-a-minute-in-subsidies-says-imf http://www.theguardian.com/environment/2015/may/18/fossil-fu...
- lukeschlather 11y ago
  Economics is not zero-sum, so the nice thing is that if you change behavior the tax can avoid more damage than the cost of the tax. In the best case the tax is simply not collected and no damage occurs from the pollution.