tag:blogger.com,1999:blog-16594468.post8467344855862464703..comments2023-10-24T04:29:23.693-06:00Comments on Atheist Ethicist: The Pigovian TaxAlonzo Fyfehttp://www.blogger.com/profile/05687777216426347054noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-16594468.post-30536702099738174882007-04-14T04:24:00.000-06:002007-04-14T04:24:00.000-06:00Mike HI was trying to make a distinction between a...Mike H<BR/><BR/>I was trying to make a distinction between an externality tax and murder-for-profit. The notion of a ban I was implying was like a criminal sentence for a business, when, as Alonzo correctly pointed out, it is really (or can be) a boundary condition for the real (full-cost) viability of a business.<BR/><BR/>I was not arguing for a murder-for-profit tax at all. I was alluding to the idea that you cannot hold a business <B>fully</B> responsible for murder or manslaughter as one does with persons and so it is the individuals controlling the business that should bear the consequences for that.<BR/><BR/>And the means to minimise whether or not the question of murder or manslaughter, as a consequence of a business's normal activities, comes up <B>in the first place</B>, a Pigovian tax, with real world boundary conditions, is currently the most effective means we know to achieve this.Martin Freedmanhttps://www.blogger.com/profile/16952072422175870627noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-37249889131043106282007-04-13T15:52:00.000-06:002007-04-13T15:52:00.000-06:00We constantly live with such contradictions.Show m...We constantly live with such contradictions.<BR/>Show me a major smuggler of any restricted substance who has gone to jail for smuggling, and I almost guarantee he also is in jail for income tax evasion.<BR/>Selling drugs is illegal, but if you do sell drugs you have taxable income from it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-16594468.post-6934835417232004232007-04-13T10:54:00.000-06:002007-04-13T10:54:00.000-06:00martino: I understand that in a sense, murder for ...martino: <BR/><BR/>I understand that in a sense, murder for profit is "imposing a cost on another person," so technically yes, it is an externality. What I object to is CALLING it an externality. "Externality" has the connotation of not being very serious: simply internalize the cost and that makes everything okay. By calling murder for profit an "externality," you're helping to make it less serious of an issue than it is. <BR/><BR/>By viewing murder for profit as an externality, that already framed the issue for you as "something to be minimized." No, its something to be eliminated if possible! There's a difference in meaning. Of course the effect of trying to eliminate something is to minimize it, but if you set you're goal as "minimization" that communicates a weaker message than the goal of "elimination." <BR/><BR/>Its possible to eliminate the murder by shutting down the plastic Flamingo industry. My point is that the plastic Flamingo industry, like many industries, is fairly worthless when compared to the value of a human life. We need to keep our priorities straight: producing plastic junk should be last on our list, and preventing murder should be near the top. Viewing this as an externality issue muddles things and confuses our priorities. <BR/><BR/>How can you have a combined policy of a murder for profit tax and prosecution for murder for profit? That's a contradiction. One policy says "you must pay this much if you want to kill people" and the other one says "you may not kill people."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-16594468.post-3265788991675725632007-04-13T05:19:00.000-06:002007-04-13T05:19:00.000-06:00In any policy, there are instances in which the co...In any policy, there are instances in which the costs of doing something exceed the benefits.<BR/><BR/>Let us assume that there is an industry that produces $100,000 worth of externalities. However, the bureaucracy to collect and distribute a Pigovian tax would cost the government $1,000,000. This is a case in which it is literally true that "the cure is worse than the disease."<BR/><BR/>At the same time, if we have reason to be certain that a Pigovian tax would close down an industry, prudence suggests simply closing down the industry. For example, governments could have gone through the effort of putting a Pigovian tax on chemicals that damaged the ozone. However, such a tax would quite obviously make it economically unfeasible to use those chemicals. The things they were being used for were not that important and inexpensive sustitutes were already available. Given these facts, prudence does suggest an outright ban.<BR/><BR/>An outright ban on carbon dioxide or sulpher dioxide, for example, would be far too costly.<BR/><BR/>These, then, describe two boundary conditions for using a Pigovian tax. The value of the externalities we can correct for must exceed the cost of the bureaucracy to enforce the tax, and the externality-generating activity must be one that can survive the tax.Alonzo Fyfehttps://www.blogger.com/profile/05687777216426347054noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-39576365671043561972007-04-13T02:38:00.000-06:002007-04-13T02:38:00.000-06:00Just wanted to clarify that I do not regard a Pig...Just wanted to clarify that I do not regard a Pigovian tax as a fine. The first is a means to help make markets efficient by ensuring the appropriate parties bear their own costs and the latter is to discourage a party from transgressing whatever rules of that market legally apply.Martin Freedmanhttps://www.blogger.com/profile/16952072422175870627noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-2232550405557145512007-04-13T02:30:00.000-06:002007-04-13T02:30:00.000-06:00Mike hI disagree wiht your fundamental point summe...Mike h<BR/><BR/>I disagree wiht your fundamental point summed up in your last sentence. <BR/><BR/>"But if I go around killing people for profit, thats murder, not an externality."<BR/>No, if one goes around killing people for profit, that is <B>also</B> murder <B>as well as</B> a negative externality. This is a key point. The negative externality does not disappear but is undeniably worse when comparing,say, noise pollution versus loss of life due to chemical poisoning. If, as I think we both agree, murder for profit is abhorrent and we want a society that can at least minimise it if not eliminate it, then a Pigovian tax on the chemical side effects of Plastic Flamingo production will serve that purpose more effectively than any other. <BR/><BR/>The question becomes when, <B>in addition</B> to using an externality tax, it is appropriate to ban something (in which case an externality tax is not needed, but that is just a consequence of this specific alternate policy and not a sufficient or necessary relation in general). As, I think Alonzo has implied in many of his other posts, people and businesses should be held responsible and pay the consequences of the harm that they do to others, then there seem to be two related systems of punishment - fines and prevention of trade on business versus fines and prevention of liberty on persons.<BR/><BR/>If there is a means of deciding that the operators of the Pink Flamingo business are murdering for profit, then they can and should be prosecuted for that as persons. In the meantime, Alozno has argued, and I agree, that the most efficient method that prevents such situations occurring is a Pigovian tax.Martin Freedmanhttps://www.blogger.com/profile/16952072422175870627noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-21817834405920073202007-04-13T00:34:00.000-06:002007-04-13T00:34:00.000-06:00If a business producing plastic flamingos to put o...If a business producing plastic flamingos to put on your lawn was releasing dangerous chemicals that cause 10 people to die every year, could you honestly say that taxing them is the best policy? Lets say that some economists do a survey and they determine that citizens are willing to pay $500 to save the life of one person, so those 10 lives are "worth" $5000. But the plastic flamingo industry is "worth" $50,000, and preventing them from using those chemicals would shut down their business. <BR/><BR/>I think the only sane answer here is shut them down! Sure you could tax them and make them internalize the $5000 cost of killing people, and then they'd kill maybe 8 people instead of 10 or something. <BR/><BR/>But I think that one human life is worth more than a lot of the trash that our economy produces. People may value that trash more, but they're wrong. <BR/><BR/>We have to draw the line between what violates peoples' rights and what is simply imposing a burden on them. Taxing a club for making loud music that disturbs the surrounding area might make sense, for example. Loud music is a true negative externality. But if I go around killing people for profit, thats murder, not an externality.Anonymousnoreply@blogger.com