> Negative externalities are a reality, but the goal is to
> apply them fully to the individuals responsible not eliminate freedoms to
> prevent them from happenning. Negative externalities as well as positive
> externalities will always exist. Shouldn't "free riders" be made to pay
> for positive externalities as well? This has been the thrust of my
> argument...if person A wants to enjoy a positive externality(such as a
> nice view) then that person must pay for it. I don't consider a lot of
> what people are griping about as negative externalities, I consider them
> as the loss of positive externalities, sematics, maybe, but it still
> doesn't give others the right to dictate policy on my property.
Externalities, both positive and negative, are not captured in
market transactions because: 1) not all values are easily identified,
2) prices are not easily established for such values, 3) there
is no widely accepted mechanism for incorporating such externalities
4) information is not cost-free and easily obtainable. Value, which
must incorporate externalities, is not always captured in "price."
Example: I value a spotted owl just because I feel good knowing
it is out there in the woods. Now, how do we capture this (existence)
value in a market transaction? Note: the owl itself is not part of
*any* direct market transaction. So what happens? This existence
value is approximated through the market value of timber. Well, this
is a poor approximation at best. And how would you price the owl when
the individual says, "there is no amount of money that I'd be willing
to accept to allow you to kill that owl? The owl is not for sale."
[...]
> But the market is not an "inanimate force". It is people making moral
> and ethical choices about the products they buy.
Ethical and moral choice may or may not be captured in a buying
(or selling) decision. People cannot always assimilate
and process all knowledge in a purchase decision. (Remember: in free
market theory, there is an assumption of readily available and cost-free
information.) I may not have all the information neccessary to make
an informed, ethical choice. The end result: price alone is often *the*
determining factor in many market transactions because that is the
only information we possess.
> If Champion liquidated
> their lands it was what *people* demanded in the marketplace.
Not at all. What is good for Champion stockholders is not
necessarily what the "people" want. I would guess
that people in Montana want sustainable forest products and
sustainable economies. When Champion exported its logs to
Japan, is that what the people demanded in the marketplace?
Which marketplace? Which people?
> If the market did not work
> than by your argument cows and chickens should be the scarcest animals
> on the earth.
My argument makes no such implicaton. The market works in some
instances, but not in others. The market is the interaction of both
supply and demand. Where we can readily control and manipulate supply,
the market is more successful. When supply is fixed, as in the case of
some environmental goods, the market mechanism breaks down.
[...]
> Value is a subjective determination we
> all make and varies from person to person.
Yes.
> Price is the great
> equalizer. It sythesizes all of our values to optimize price so as to
> place an item in its place of appropriate *value*.
Price ignores important components of value. Do you think the full
price of nuclear power is captured in the price of energy charged by
the power companies? Do you think the full price of energy
is captured in the price of hydoelectric power? If you say "yes",
then why is BPA going to charge customers more to change management
of the damns? Why wasn't this value (on fisheries) originally captured
in the price?
The bottom line...information is not perfect, and values change. It
is impossible for the market to continually and accurately reflect
the best allocation of all goods. The market mechanism does work
in the allocation of some goods but it is hardly the omniscient
diety that you portray it to be.
[...]
> You can be mad, you can be indignant, but you can't force
> people to do what you or I have decided is morally right(remember legal
> grounds are normally well defined...except for RCRA and just about
> anything put out by the EPA...both are currently
> violating the Constitution left and right). That is totalitarianism.
Now that is an interesting statement that I have not heard before.
Just how is the EPA unconsitutional? Please refer back to the text of
the constitution when bringing forth your argument. I'm quite
interested in how you will develop this argument.
-- Greg Brown gregb@uidaho.edu Computer Services Moscow, ID 83843 University of Idaho (208) 885-2126