"But We Must Do the Wrong Thing!": Understanding the "Economic" Arguments Against Dealing with Global Warming
The market-based economics that I was brought upon had four principles:
- It is important to get the distribution of wealth right, or as right as you can, so that household willingness-to-pay properly represent social marginal values.
- It is important to get aggregate demand right--for the government to create the right amount of safe and of liquid assets to match shifting private sector demand and so make Say's Law true in practice if not in theory--so that the problems economic policy is dealing with are Harberger Triangles and not Okun Gaps.
- Then you can let the competitive market rip--as long, that is, as...
- You have also imposed the right Pigovian taxes and bounties to deal with externalities.