3 ms·

Anyone who is Economics literate - which is more common among conservatives - knows about externalities. They also know that when there are negative externalit

Anyone who is Economics literate - which is more common among conservatives - knows about externalities. They also know that when there are negative externalities, government action to try to counter them is often a cure worse than the disease. Also "my proposal will be costly, but the positive externalities will outweigh them" is often stated, but rarely proven.

bumby 4y ago
Even the most die-hard libertarians I know (which I'm using here as a proxy for the most conservative) recognize one of the fundamental roles of government is to account for and price in externalities. The OP indicates that the incentives of corporations driven by a profit motive is not to price in externalities. If not the government, what other mechanisms do you suggest?
Spivak 4y ago
Genuinely curious, in a conservative world, how do you deal with externalities without some kind of intervention that distorts the market or the natural order? It makes total sense to have debates over what things rise to the level of problem and what the best fix is but, at least in my state politics, Republican's seem to just abandon their principles for pragmatism (which is good) but I can't seem to figure how this doesn't cause an identity crisis. Having a "how a conservative evaluates market interventions" seems less taxing than getting pushed to a breaking point and then begrudgingly doing things not in line with your ideals.
- BurningFrog 4y ago
  How to deal with (negative) externalities depends a lot on the nature each specific externality, and what the alternatives are. It's important to recognize that both markets and government action sometimes fail, and why, to have a grownup conversation about options.
  - paulryanrogers 4y ago
    Can you provide an example of a government regulation that you see as a net positive? Or private market action that had a negative impact on externalities? Because IME markets in general are so short-sighted they literally plow ahead with profit over all until the river is burning (pollution in Cleveland) or thousands are poisoned for decades (Flint water crisis). And often don't stop or self correct even in such extremes. Some governments have certainly overreacted to market failures, but I don't think that means every conversation has to qualify that.
    - BurningFrog 4y ago
      The classic externality is pollution. Some industrial process produces valuable goods, but the air becomes unhealthy to breathe for everyone. A good government solution to this has been emissions trading¹. The government sets up a maximum allowed emission rate, and producers can trade those rights between them. By making it costly to pollute, producers have incentives to lower pollution, and the allowed rate can be lowered over time, improving the air for everyone. If markets are so stupid and short sighted, it's hard to understand how they've generated 250 years of huge and sustained increases of material wealth all over the planet. 10x as many people now live far richer and healthier lives than 250 years ago. True, a river burned in Ohio 50 years ago, but that's very, very small potatoes in the big picture as I see it. ¹ https://en.wikipedia.org/wiki/Emissions_trading https://en.wikipedia.org/wiki/Emissions_trading
      - paulryanrogers 4y ago
        Not so sure you can attribute 250y of gains solely to markets. In fact much of the health gains come from government funded research. Now, you admit collective action is needed. Great. Because unbridled markets gave us slavery, child labor, 12h-7d work schedules, company towns, the food pyramid, greenwashing, and robber barons. So the solution to externalities is largely collective action. Because obviously the market alone didn't make emissions trading happen. Markets were backed into a corner. And it feels like a half assed solution considering we don't need to burn coal any more. The market just values profit more than quality of life of those near the site of production. If we look solely to markets and careless regulation then the biggest companies will capture regulators. Then we're on the path to modern day feudalism. Seeing Amazon hollow out local competition only makes this feel more and more real here in the Midwestern US.
- deleted 4y ago
  [deleted]

bumby 4y ago

Even the most die-hard libertarians I know (which I'm using here as a proxy for the most conservative) recognize one of the fundamental roles of government is to account for and price in externalities. The OP indicates that the incentives of corporations driven by a profit motive is not to price in externalities. If not the government, what other mechanisms do you suggest?

Spivak 4y ago

Genuinely curious, in a conservative world, how do you deal with externalities without some kind of intervention that distorts the market or the natural order? It makes total sense to have debates over what things rise to the level of problem and what the best fix is but, at least in my state politics, Republican's seem to just abandon their principles for pragmatism (which is good) but I can't seem to figure how this doesn't cause an identity crisis. Having a "how a conservative evaluates market interventions" seems less taxing than getting pushed to a breaking point and then begrudgingly doing things not in line with your ideals.

BurningFrog 4y ago
How to deal with (negative) externalities depends a lot on the nature each specific externality, and what the alternatives are. It's important to recognize that both markets and government action sometimes fail, and why, to have a grownup conversation about options.
- paulryanrogers 4y ago
  Can you provide an example of a government regulation that you see as a net positive? Or private market action that had a negative impact on externalities? Because IME markets in general are so short-sighted they literally plow ahead with profit over all until the river is burning (pollution in Cleveland) or thousands are poisoned for decades (Flint water crisis). And often don't stop or self correct even in such extremes. Some governments have certainly overreacted to market failures, but I don't think that means every conversation has to qualify that.
  - BurningFrog 4y ago
    The classic externality is pollution. Some industrial process produces valuable goods, but the air becomes unhealthy to breathe for everyone. A good government solution to this has been emissions trading¹. The government sets up a maximum allowed emission rate, and producers can trade those rights between them. By making it costly to pollute, producers have incentives to lower pollution, and the allowed rate can be lowered over time, improving the air for everyone. If markets are so stupid and short sighted, it's hard to understand how they've generated 250 years of huge and sustained increases of material wealth all over the planet. 10x as many people now live far richer and healthier lives than 250 years ago. True, a river burned in Ohio 50 years ago, but that's very, very small potatoes in the big picture as I see it. ¹ https://en.wikipedia.org/wiki/Emissions_trading https://en.wikipedia.org/wiki/Emissions_trading
    - paulryanrogers 4y ago
      Not so sure you can attribute 250y of gains solely to markets. In fact much of the health gains come from government funded research. Now, you admit collective action is needed. Great. Because unbridled markets gave us slavery, child labor, 12h-7d work schedules, company towns, the food pyramid, greenwashing, and robber barons. So the solution to externalities is largely collective action. Because obviously the market alone didn't make emissions trading happen. Markets were backed into a corner. And it feels like a half assed solution considering we don't need to burn coal any more. The market just values profit more than quality of life of those near the site of production. If we look solely to markets and careless regulation then the biggest companies will capture regulators. Then we're on the path to modern day feudalism. Seeing Amazon hollow out local competition only makes this feel more and more real here in the Midwestern US.
deleted 4y ago
[deleted]