Wednesday, April 10, 2019

Mark W. Anderson — Right Wing or Left Wing – There Are Still No Free Lunches

This analysis is basically right about the economics, but very wrong about the finance.

The problem we face with human contributions to climate change and the levels of pollution that are unhealthy for a vast majority of people is basically economic in the sense that negative externality is being socialized. This means that in markets, goods that generate negative externality through use or in the course of their production are sold at below true cost.

The result is mispricing of negative externality in markets. The economic answer is imposing true cost rather than using cost of goods sold and mark up with respect to pricing. This can be addressed by preventing socialization through tax imposition that approximates true cost.

The solution lies in tackling economic rent politically, that is, preempting financial rents, lands rents, natural resource rents, and monopoly and monopsony rents, along with crime, including legalized crime, as well as socializing negative externality.

Why aren't we doing this? Because it would destroy "capitalism" as we know it.

Why is he wrong about solution when he proposes a carbon tax, which would address socializing negative externality? This is not an argument against using MMT analysis, which, after all, is based on a correct institutional description. MMT simply argues that taxation is not needed to "pay for" a GND, since taxation doesn't pay for anything the government spends on.

MMT does NOT argue that imposing taxes to address economic rent and negative externality is a bad idea even though it is unnecessary for funding, although at least some would argue that it preferable to preempt economic rent anti rather than tax it away post. Better to keep the petroleum in the ground.

MMT argues that taxation is needed for two reasons: to create demand for a currency and to control inflation. Moreover, taxes can also be used functional for public purpose by discouraging behavior that is taxed.

Stirring the Pot
Right Wing or Left Wing – There Are Still No Free Lunches
Mark W. Anderson


GLH said...

As I see it the real problem is that Mr. Anderson is depending on the market to solve the problem and leaving the government out. Neo liberal. The way to solve the problem is to pass laws telling industry what they have to do. Think about when the government used to tell the car companies how many miles per gallon their cars had to get. It seems that we all need to get out of a neoliberal mindset. Another thing he is wrong about is that tax cuts don't increase spending. Tax cuts to the regular people will increase spending, it is just tax cuts for the rich that don't. Regan and Trump just looked out for the rich and to hell with the rest of us. And you asked what is wrong with a carbon tax, well that would be a tax on the real economy and unless there was a tax cut for the rest of society, then it would come out of our pockets. Anyway, corporations will get out of paying a carbon tax that hurts their shareholders but they won't mind passing one on to us. Think of Al Gore's bullshit scheme with Goldman to tell everybody about global warming and then scam us using tax credits. You are right about the idea that companies need to impose true cost to their planning. Here in NC Duke Power dumped coal ash for years no doubt not facing the idea that some day they would have to pay anything for their pollution. Now that it is time to pay the piper they want their customers to pay up instead of the share holders. More neoliberalism externalize the cost and screw the consumer.

Ryan Harris said...

European conglomerate just built a giant wind farm near a wild life refuge which hosts 650 species of migrating birds, many endangered,. along Texas' gulf coast. Some breezy nights, thousands of birds, entire flocks weary from long journeys get dispatched and lie in piles. We've abundant water and insects, totally inappropriate use of the filthy devices. European big green rentiers need to be taxed out of existence and the revenue can be used to pay for dismantling the bird choppers. These negative externalities of Big GrenG industrial policy are so much worse than anything that they are replacing. Disgusting.

Ryan Harris said...

In California they build a giant solar concentrator, the only problem is that the mirroes incinerate, mid air, spontaneous combustion of any birds they fly over the Big Green project. Who could have imagined that concentrated beams of solar energy that create temperatures of 800 degrees could roast birds and cause feathers to combust? Bizarre willful blindness and a total unwillingness to engineer solutions to reduce their pollution. We need Big Green taxes, and NOW

Calgacus said...

You've got to be kidding, Ryan.

Ryan Harris said...

Not really, Calgacus. Being a bird-a-caust denier isn't a good look.

Bird Spontaneous Fires

Yet another European wind farm on gulf coast.

Ryan Harris said...

Google "bird deaths and wind turbines" . 10% of bird kills are now caused by wind farms to produce less than 1% of power. Clean, efficient fuels have few negative externalities compared to Big Green's bird chopping turbines.

Ryan Harris said...

Don't even get me started on Big Green's toxic coal melted sand panels without any recycling and clean up plans for disposal at end of solar capture life. eBay is loaded with people unloading used toxic panels to unsuspecting consumers that don't know coal-melted-sand panels with diminished solar capacity are problematic.

Calgacus said...

Ryan, taking the bird-a-caust and solar panel disposal at your face value and as a certainty, and taking the effects of fossil fuels as used today as a probable threat, the comparison of negative externalities is a joke. The threats involved with fossil fuels are stupendously greater than wind and solar's and are global rather than local.

Ryan Harris said...

I don't follow the logic. Because you find oil problematic, it's okay to destroy birds with bad technology and make no effort to ameliorate impacts? *It's not about oil, it's about Big Green* If a flaw is found in any system, poininpo at a different system and saying it is worse doesn't fix the flaw. It's not an oil conspiracy killing birds, it's irresponsible wind and solar projects. Wind and solar projects need to be designed sustainably with regard to the environment. Period. Alternatives like 4g Nuclear exist without negative externalities of solar, oil and wind