3 ms·

their demand goes up, which raises the price of electricity If that were true, then electricity should be astonishingly expensive because we use astonishingly

• rayiner 14y ago
  > If that were true, then electricity should be astonishingly expensive because we use astonishingly more of it than we did 60 years ago, yet the last time I looked, inflation adjusted prices for electricity were remarkably flat. So, the price of computers has gone down even with skyrocketing computer use. But nobody would say that the benefits of computers are a positive externality that isn't priced into their price. > What economic theory is that? Bog-standard neo-classical economics. See: http://www.libertarianism.org/media/around-web/negative-externalities-coase-theorem http://www.libertarianism.org/media/around-web/negative-exte.... > Advances are in no way inevitable. Advances are in no way unhindered by prices of resources. There is a "right price" for resources. If the actual price for the resources is too high, that will retard development. If the actual price for that resources is too low, development will happen in a way that uses an inefficiently high amount of the cheap resource. The market will generally arrive at the "right price" for resources, except in the presence of externalities. > From that tradeoff, we have reaped extraordinary benefits. Why are those benefits so hard to recognize in this discussion? It's not a matter of recognizing those benefits, it's a matter of not double-counting those benefits.
  • crusso 14y ago
    nobody would say that the benefits of computers are a positive externality that isn't priced into their price You're the one who said that the increase in price of a resource already accounted for its benefit to the producer. You can't use the fact that I broke your argument to then construct a straw man. Besides, if someone used the same one dimensional environmental argument against the pricing of computers (which they sometimes do), then I would be consistent in the defense of the beneficial externalities of computers. Bog-standard neo-classical economics You got me there, you named A theory. Hey, here ya go: http://en.wikipedia.org/wiki/Externality http://en.wikipedia.org/wiki/Externality Right there they mention "invention". My claim is that inexpensive electricity has led to many inventions because people have more time to invent and more resources with which to invent. Because of cheap electricity, we have more people alive because they could afford air conditioning and well refrigerated foods. Some of those people have invented things. If "Invention" is a beneficial externality (or more properly has positive externalities), then the predicate of invention, "cheap electricity" is also a beneficial externality. If the actual price for the resources is too high, that will retard development Use of a resources normally has a critical minimum price before it's used commonly or at all. Why do you think the title of this article is "Cost of Gene Sequencing Falls Raising Hopes for Medical Advances"? http://www.nytimes.com/2012/03/08/technology/cost-of-gene-sequencing-falls-raising-hopes-for-medical-advances.html?pagewanted=all http://www.nytimes.com/2012/03/08/technology/cost-of-gene-se... Gene sequencing has negative externalities too. There's a loss of privacy. There is a possibility that terrorists could release gene-based biological agents that could wipe out segments of societies. Should we price that into gene sequencing now "just in case"? it's a matter of not double-counting those benefits I could just as easily say you're double-counting the costs of electricity since society (to a small and appropriate degree) views its generation as harmful to the environment and so they already have less of a demand for it. That would be a nonsense argument to since consumers don't typically factor in non-sequitor benefits and negativities during price negotiation.