Wednesday, November 29, 2006

No planners in Pigouland?

The NoPigou club is under attack! Mark Jaccard, in a commentary posted at the NoPigou Club clubhouse, says we're just a bunch of Orwellian truth manipulators. In essence, the Simon Fraser University prof says carbon and other Pigou taxes are just crispy clean market-friendly government measures that all "right"-thinking economists and politicians should and do support. But here's Jaccard's big claim: He supports Pigovian taxes because they involve "no role for planners." We'll have more on this untruth in later postings, but let's begin with one question: Who sets the price--i.e. the tax? No planners here, says Jaccard. Just us free market economists. And how does one set the tax rate? What factors does one take into consideration? Maybe we need a report from the Ministry of Oil Supply and the Ministry of Consumer Behavior, the Department of International Trade and the Bureau of Tax Collection Efficiency. And then another question: What do we do with the money collected through the Pigovian tax? Let's get the Ministry of the Environment and the Department of Industry...but, hey, no planners, please. We're free-market driven Pigovians!


Anonymous Anonymous said...

Perhaps in lieu of "planners" we of the "NO PIGOU" should call them "decision makers." Would that make it more obvious to people? "Was a decision made that was not a part of free market interaction?" If so this is, and always is, planning.

6:43 PM  
Anonymous Mike Moffatt said...

I've responded to your challenge here:

The Gas Tax - Answering NoPigou's Questions.

I hope today's Financial Post article isn't the best argument against the gas tax that you've got. If it is, I'm not surprised that you're so reluctant to debate me. :)

7:52 AM  
Anonymous Anonymous said...

Mike that isn't much of a response to Terence Corcoran's main point. Setting a tax to change behavior hardly is a situation where there is "no role for planners".

Note the point isn't as much an argument against gas taxes or other "Pigou taxes", rather its just a refutation of Mark Jaccard's specific argument for them. Even if Jaccard's argument is weak, that doesn't automatically mean the argument for such taxes is weak. Reducing gasoline consumption or CO2 emissions might be important enough that some degree of such planning is desireable or at least acceptable. Also the intrusiveness of a tax on CO2 production is lower then the intrusiveness of many other proposed interventions.

Also see a couple of arguments from Don Boudreaux

3:00 PM  

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