The heat is on. Fox News special review

[Jdanz]

I'll admit that i've never read much pure anachro-capitalist literature, but if you'd like a discussion of property rights framed in a context that government intervention is generally harmful i'd point you to Coase or Barzel, most specifically "An Economic Analysis of Property Rights" where Barzel rather convincingly proves that rights cannot be fully delineated.

I really can't summarize his arguements perfectly, but the main point is that identifying and enforcing rights is a costly activity, and that identifiable rights over an attribute are nearly limitless (and variable between similar owned objects), therefore no rights are fully delineated, insomuch as it becomes prohibitevly costly to do so.

We are having a semantic difference of opinion betweeen ownership and damages here. Those who are negatively effected by an actors actions (a power company for instance) by seeking damages, are in other words, delineating their rights over a resource (in this instance clean air). As far they are capable of recovering damages they are capable of delineating and enforcing their ownership.

This process is quite dynamic, however it is almost inarguable that at times it costs more to organize and enforce said rights then those rights are worth. For instance you say a class action law suit (a fairly rare occurance in the greater area of litigations), but this would envolve a class action lawsuit of six billion people versus all those defendents that cause any form of air pollution. This is how "people" as a whole could define ownership over their right to clean air.

I think, quite frankly, that it isn't that they don't value such a resource greatly, but that it's impossible for six billion people to organize collectively, gather a limitless amount of information about how pollution works and identifiying who causes what, and then enforcing each individual case of liability by paying damages to who is effected. It's not that it's not valuable to organize and enforce such rights, it's that it's almost infinetely expensive to do so in a "perfect" anachro-capitalist way.

I submit that the above organization is INTENSELY costly, i'd also agree that government interaction is coercive and costly, but FAR less costly, as the government could for instance substitute a tax per unit of air pollution produced, to change the incentive structure of power companies, and put this tax into a fund to help with damages.

Yes this is coercive, and yes it is economically inefficent (insomuch as a tax removes us from a market equilibrium), but the alternative is more costly (and can be expressed so through voting, another imperfect mechanism). It's simply that no matter how "valuable" clean air is, this value can never be rectified in the free market when organizational costs are prohibitevely high.

Therefore if a resource is percieved as incredibly valuable, and the cost of organization is very high, then government action can lead to a more efficent outcome then anarchocapitalism. (my mathmatical statements from before)

Side note: i myself believe that a mostly hands off approach leads to the greatest amount of value (though i have problems with distributional issues that the market does not address). However people without such liberal tendancies agree for the most part that in certain circumstances (such as those above) that government intervention can be more efficent then the market. As this seems to be an issue you feel extremely strongly about, i would empathically suggest barzel's book you'll find it very interesting as it mainly concerns the generation of economic (as apposed to legal) property rights.

[tylerdurden]

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I'll admit that i've never read much pure anachro-capitalist literature, but if you'd like a discussion of property rights framed in a context that government intervention is generally harmful i'd point you to Coase or Barzel, most specifically "An Economic Analysis of Property Rights" where Barzel rather convincingly proves that rights cannot be fully delineated.

I really can't summarize his arguements perfectly, but the main point is that identifying and enforcing rights is a costly activity, and that identifiable rights over an attribute are nearly limitless (and variable between similar owned objects), therefore no rights are fully delineated, insomuch as it becomes prohibitevly costly to do so.

We are having a semantic difference of opinion betweeen ownership and damages here. Those who are negatively effected by an actors actions (a power company for instance) by seeking damages, are in other words, delineating their rights over a resource (in this instance clean air). As far they are capable of recovering damages they are capable of delineating and enforcing their ownership.

This process is quite dynamic, however it is almost inarguable that at times it costs more to organize and enforce said rights then those rights are worth. For instance you say a class action law suit (a fairly rare occurance in the greater area of litigations), but this would envolve a class action lawsuit of six billion people versus all those defendents that cause any form of air pollution. This is how "people" as a whole could define ownership over their right to clean air.

I think, quite frankly, that it isn't that they don't value such a resource greatly, but that it's impossible for six billion people to organize collectively, gather a limitless amount of information about how pollution works and identifiying who causes what, and then enforcing each individual case of liability by paying damages to who is effected. It's not that it's not valuable to organize and enforce such rights, it's that it's almost infinetely expensive to do so in a "perfect" anachro-capitalist way.

I submit that the above organization is INTENSELY costly, i'd also agree that government interaction is coercive and costly, but FAR less costly, as the government could for instance substitute a tax per unit of air pollution produced, to change the incentive structure of power companies, and put this tax into a fund to help with damages.

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Yes, enforcement *all* rights would be expensive (both in time and money). Each individual would make choices about which damages to pursue. Government handling this is less expensive than pursuing ALL damages, but only because in that case, someone else is determining which cases to expend resources on. The same process is at work, the difference is who makes the allocations. You can't fairly compare the cost of pursuing all infringements in AC vs. the cost of pursuing selected infringements in statism.

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Yes this is coercive, and yes it is economically inefficent (insomuch as a tax removes us from a market equilibrium), but the alternative is more costly (and can be expressed so through voting, another imperfect mechanism). It's simply that no matter how "valuable" clean air is, this value can never be rectified in the free market when organizational costs are prohibitevely high.

Therefore if a resource is percieved as incredibly valuable, and the cost of organization is very high, then government action can lead to a more efficent outcome then anarchocapitalism. (my mathmatical statements from before)

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But this assumes that everyone values their rights and the transgressions against those rights with the same weight, and that everyone values resources the same (or that the decision-making authorities values are the "correct" ones).

[Jdanz]

i don't believe it does, nor am i asking AC to function perfectly where gover reg doesn't. I'm saying that the actual process of organization is lest costly under government.

It neccissarily follows that in some circumstances that without gov regulation even though the actual value of a right is sufficent to seek redress it is prohibitvely expencive to do so, whereas in a gov reg'd world, organization being less costly (via delegation and some amount of coercion) allows a greater end result.

This is assuming that how much someone values something and actual attainablity aren't completely identical. A deposit of gold in a mountain that we can't get at is still a valuable amoutn of gold, supposing we had the tools to get at it.

I'm not trying to say AC > gov or gov > AC, i'm simply saying that neither is completely effective. You usually frame arguments in terms of better = more efficent. There are however circumstances in which the state is more efficent then AC.

[tessarji]

It's late at night and I'm snarky.

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Externalities are bogus concepts that are (mis)used to justify government intervention. The emotion they play on (that others' actions can have effects one's happiness without action from the one that is effected) is a real one, but their application is always arbitrary. Additionally, they assume to know the preferences of the individual that is affected by them, even though that individual has expressed no preference (i.e. he hasn't acted).

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Your language here is contorted. An externality is an economic concept, not a person. It does not play on someone's emotions, it cannot know anyone's preferences. What exactly are you talking about?

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Is that cost greater than the cost of allowing the pollution? If that cost is so great, it should be more than enough to discourage polluters.

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This makes no sense whatsoever. You are arguing that the cost to the infringed, to organize a lawsuit, should provide a powerful discouragement to polluters.

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Essential in your schemata (sp) i believe that energy companies are stealing, insomuch, as they are using a resource (a non-polluted enviornment) that does not belong to them without paying for it. The typical arguement here is that if people value a clean enviornment they should organize and delinetate the rights to clean air, however i would argue that this organization is incredibly costly to the point of being nearly impossible.

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Why, then, would it be possible in a state system?

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There is this innovative idea in a state system called a 'tax' which goes about implementing this very thing. You can find more information about it here.

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Note that class-action lawsuits are often massively expensive, much more expensive than any one member of the class would be able to afford, yet they are routine. Even individual lawsuits that cost more than the plantiff could ever afford are taken up by lawyers every day.

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Let's return to this in a moment.

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Why is this not possible? What trade is not allowed?


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Please quote me the market price for one liter of unpolluted air, or a hike in a pristine forest, or forty years of someone's life that occured when they didn't catch cancer. Sources please.

Anticipating your response: Yes, the value of each of these is different to every single person. The same is true of every single concrete good that is actually traded on every single market. So what?

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Also note that if producers of "cheap" but dirty energy are actually held accountable for their pollution and forced to pay for damages they cause, the price they are able to offer their energy at will have to reflect those costs - the supposed externality has been internalized.


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Sounds great to me. Now let's think, who will be in charge of getting the producers to internalize their costs... I'm sure there's someone who does these kind of thing all the time...

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Let's allow that government does enable organization costs to drop. What about the costs it imposes elsewhere?

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So in other words, government is the wrong answer, even if it is the right answer.

You mentioned before that someone needs to handle collating, evaluating and enforcing these costs on public goods by these goods' 'consumers'. In analogy to law firms, and class-action lawsuits. This way, the cost of prosecuting each individual's rights could be spread out amongst the class of the infringed.

Of course, in the case of clean air, the infringed would be everyone. To different extents. So for this lawsuit, everyone in the world would have go about choosing or electing representatives to handle their case. And those representatives would have to have occasional public meetings to decide a fair value for the infringed rights. I mean, they can just read off the numbers from the clean air markets which apparently exist. These representatives could then serve as executors of this market, by extracting payments from the infringers, and then returning it to the people, perhaps in the form of mitigation efforts to remove damage that has already occured. If they had sufficient legal power, they could skip the middle step altogether, by merely artificially raising prices at the consumer level and then applying the revenue directly.

I'm sure it's obvious how this would be completely unlike and totally superior to our current system.

[Dr. Strangelove]

ba-ZING! Nice post.

[tylerdurden]

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Your language here is contorted. An externality is an economic concept, not a person. It does not play on someone's emotions, it cannot know anyone's preferences. What exactly are you talking about?

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The person using the "externality" as part of his argument is playing on emotions and assuming to know someone else's preferences. Better?

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This makes no sense whatsoever. You are arguing that the cost to the infringed, to organize a lawsuit, should provide a powerful discouragement to polluters.

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That cost will be incorporated into damages judgements, if the case is decided for the plaintiff, so yes, that has to be factored into the decision process by the polluter.

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Essential in your schemata (sp) i believe that energy companies are stealing, insomuch, as they are using a resource (a non-polluted enviornment) that does not belong to them without paying for it. The typical arguement here is that if people value a clean enviornment they should organize and delinetate the rights to clean air, however i would argue that this organization is incredibly costly to the point of being nearly impossible.

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Why, then, would it be possible in a state system?

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There is this innovative idea in a state system called a 'tax' which goes about implementing this very thing. You can find more information about it here.

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How do taxes make the organizational costs lower??? By them selves, they should make costs higher, because in addition to the organization costs we're already talking about, you're now adding a layer of bureaucracy to develop tax codes, administer taxation, and enforce the system.


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Why is this not possible? What trade is not allowed?


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Please quote me the market price for one liter of unpolluted air, or a hike in a pristine forest, or forty years of someone's life that occured when they didn't catch cancer. Sources please.

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Saying that you can't name a price for something is different than saying trade in it is not allowed. A lot different.

But anyway, sources:
http://www.praxair.com/oxygen
http://www.nature.org/pressroom/press/press180.html
http://www.anti-cancerdrugs.com/

Note in particular the second one. A government was unwilling to preserve a particular environmental feature so a private group went and bought the land.

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Anticipating your response: Yes, the value of each of these is different to every single person. The same is true of every single concrete good that is actually traded on every single market. So what?

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So nothing. You brought it up, you tell me so what.

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Also note that if producers of "cheap" but dirty energy are actually held accountable for their pollution and forced to pay for damages they cause, the price they are able to offer their energy at will have to reflect those costs - the supposed externality has been internalized.

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Sounds great to me. Now let's think, who will be in charge of getting the producers to internalize their costs... I'm sure there's someone who does these kind of thing all the time...

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Currently it's nobody. The whole concept of externalities was cooked up because the government allows offenders to dump on others. The EPA explicitly *allows* pollution, and provides protection to polluters - of course, they only allow politically desirable types and amounts of pollution, but some bureaucrat is deciding how much pollution you can put up with, not YOU. This is basically a case of the government legislating externalities into existence by fiat. So maybe I will amend my previous statement a bit.

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Let's allow that government does enable organization costs to drop. What about the costs it imposes elsewhere?

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So in other words, government is the wrong answer, even if it is the right answer.

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If (and that's a big if) government did actually allow organizational costs to be lower in this one narrow case, that alone would justify the oppression and bureaucratic bungling? Would you shoot the patient to kill his cancer?

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You mentioned before that someone needs to handle collating, evaluating and enforcing these costs on public goods by these goods' 'consumers'. In analogy to law firms, and class-action lawsuits. This way, the cost of prosecuting each individual's rights could be spread out amongst the class of the infringed.

Of course, in the case of clean air, the infringed would be everyone. To different extents. So for this lawsuit, everyone in the world would have go about choosing or electing representatives to handle their case. And those representatives would have to have occasional public meetings to decide a fair value for the infringed rights. I mean, they can just read off the numbers from the clean air markets which apparently exist. These representatives could then serve as executors of this market, by extracting payments from the infringers, and then returning it to the people, perhaps in the form of mitigation efforts to remove damage that has already occured. If they had sufficient legal power, they could skip the middle step altogether, by merely artificially raising prices at the consumer level and then applying the revenue directly.

I'm sure it's obvious how this would be completely unlike and totally superior to our current system.

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Your line of thinking here is exactly the problem. Instead of allowing the market to find the best answer, you assume you already know and assume that your vision will be imposed upon everyone. For some reason, I'm not surprised that the best you could think up looked pretty much like the current system.

[Jdanz]

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If (and that's a big if) government did actually allow organizational costs to be lower in this one narrow case, that alone would justify the oppression and bureaucratic bungling? Would you shoot the patient to kill his cancer?

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This is the main point i've been trying to get at. Frankly i don't think it's an if, it's a certainty insomuch as it would be easier for a government to enforce a system holding companies accountable for pollution, at the trade off of there being some amount of coercion and some amount of guess work in trying to determine exactly how valuable a resource is. It's certainly an imperfect system.

However, i do believe that this is a specifically good example of the main purpose of the state. I think that the state helps people to act in a rational collective manner while reducing the costs of acting collectively and that is its main benifit.

Government in it's simplest form is people giving up some amount of liberty to allow themselves to work together in an efficent manner. It's a necessary evil. This doesn't make the case for government it just is the justification for it.
I think it's reasonable to prefer either system, but i think it is unreasonable to unequivicably say one is flat out better/worse as both provide things the other simply CANNOT.

Though i'm for a more interventionist government, i think a very solid case can be made for an extremely limited government that still allows for the delineation and enforcement of property rights as it's only functions (which would solve the energy problem we're discussing by assigning and then enforcing the "public's" right to clean air).

[tylerdurden]

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I think it's reasonable to prefer either system, but i think it is unreasonable to unequivicably say one is flat out better/worse as both provide things the other simply CANNOT.

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Strictly speaking, Anarcho-capitalism, as a system, provides nothing. Nothing is forbidden, though, unless it aggresses against another.

Of course, there are lots of things that are extremely unlikely to "provided" in a AC system. Weapons of mass destruction is a good example. Intercontinetal ballistic missiles is another.

There are all sorts of complex comparisons where one item has pros and cons over another item, yet people make better/worse decisions between them all the time. Are you uncomfortable saying that US-style representative democracy is better or worse than North Korean-style autocratic dictatorship?

[Rick Nebiolo]

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When talking about the fight for global warming they thought it was important enough to spend over 20 minutes (guestimating) interviewing the director of "the day after tomorrow" Linky and how he replaces the lightbulbs in his house with energy efficient bulbs.

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Wacki, I love these posts.

Anyway, here's a related mini-eco story:

About six months ago a crew of six workmen show up to make my apartment more "energy efficient".

They replace the foyer overhead light with energy efficient lights. I used this maybe twenty times per month for ten seconds at a time. Since they put it in I use this maybe twenty times per month for ten seconds at a time.

They replace the overhead fan lights in the dining room. I used to use this light an hour or so a month, now I never use it (the replacement lights don't go to full brightness for several minutes - I used to use the lights when reading fine print).

They replace the vanity lights in the bedroom vanity area. My girlfriend, who used these about three times a week for an hour, made me change them to brand new lights because the light they cast was so ugly.

They replace an overhead hall light that I never used unless I turned it on by accident. I still never use it.

They put in a new programmable thermostat. I live in California and never turn on the primary heat (I do use a space heater in the one room I hang in).

Of course the owner probably gets a tax credit. With the savings maybe he can buy a new SUV. But the workers who put in the bulbs probably arrived in an old run down Chevy [img]/images/graemlins/frown.gif[/img]

~ Rick

[Jdanz]

no, insomuch as the US gov provides the services its citizens desire far more effectively then does korea. In the end the only measure of a system is in the benifit to individuals. Although some are concerned with greatest net beneift and some are concerned with greatest equality of benefit.