[Terrapreta] Carbon tax

[Dan Culbertson]

Jim Joyner wrote:
> I think that is the wrong question. What we want is system that get the
> best use out of any resource. The free market is the best at doing that.
> The problem is, companies get free rides either as legal monopolies or
> immunity from the protection the gov't should provide. That is the
> problem now: companies don't pay the real cost of producing their 
> products.

That is a great point Jim. I enjoyed reading your perspective.   I read 
somewhere (the book "Omnivore's Dilemma" I think) that economists call those 
"externalized costs" or "externalities" and they are what makes the 
so-called "free market" not really work for the benefit of humankind rather 
than for the person or persons dumping his costs elsewhere.  I think the 
observation I read was that when a person buys land down the road from me 
and starts up a pig farm (old stinky variety) which stinks so bad it makes 
my land unliveable he has externalized the cost of odor abatement and I have 
to pay for it by losing prperty value and/or my quality of life.  There were 
a few other observations but the point boiled down to the idea that if there 
were absolutely no externalized costs then the free market would always act 
to preserve the environment, or for the benefit of society which I think 
should be the same thing (since it would, for example, be more profitable to 
reuse waste rather than dump it and pay for the greater social cost of that 
externality, etc.).  I'm not sure I see how that would make the free market 
non-exploitive (or beneficially exploitive) in all cases but I think it 
would make the market much more human and planet friendly. Presuming there 
is some way to actually determine all the externalities.   Wikipedia says 
about it:  "In the absence of significant externalities, parties to an 
economic transaction are assumed to benefit, improving the overall welfare 
of society." (http://en.wikipedia.org/wiki/Externality) and goes on into a 
lot of the theory.  Not being an economist I don't understand all of that in 
Wiki but it sounds at least partially reasonable.  It makes me wonder about 
the people who claim unregulated markets and free markets are the same thing 
when there are all those hidden subsidies (extrnalities) enshrined by law. 
Seems to me that the biggest law-based subsidy was the development of the 
"artificial entity" status for corporations which protects the people in a 
corporation  from any liability for their non-criminal but still antisocial 
actions.  I suspect we haven't really seen a free market since that little 
development.  But the politics of corporation protection is another thing I 
don't really claim to understand.  Anyhow, I think you are quite right - 
companies truly do not pay the real cost of producing their products.  Would 
sure be nice if they did!  I'd never have to worry about buying the cheapest 
product around since I'd know it was created by a system that improved "the 
overall welfare of society" rather than just benefited me and the 
corporation that plundered the land or impoverished workers or such.  But I 
wonder if that is ever really possible?  If incorprating all externailities 
into the price resulted in $10 a gallon gasoline would the voting public 
stand still for it? (I would, and I'd adjust my life accordingly, but I'm of 
the rather lunatic conservationsist minority view so I don't count for much 
in public policy development).   I'm not real hopefull.

Dan C.