Tuesday, February 13, 2007

Cap-and-trade: Pigovian Bootleggers exposed

For a sharp analysis of the economic muddle behind plans for cap-and-trade carbon schemes, no one beats Fred Smith of Competitive Enterprise Institute in his testimony today before the U.S. Senate Committee on Environment. In the 19th century, laws banning alcohol sales on Sundays were backed by Baptists and Bootleggers. "Thus politicians were able to pose as acting to promote public morality, even while taking contributions from Bootleggers." Smith argues that "environmental pressure groups active in the Climate Action Partnership are the Baptists, providing moral screen to the Bootleggers, in this case the energy and manufacturing companies."
The real problem, he goes on, is that the proposed cap-and-trade carbon systems is in fact '"an ugly combination of two of the greatest ills to affect the market economy over the past 200 years--cartelization and central planning."
Fred Smith is hereby enrolled in the No Pigou Club.
For another note on the use of state pricing to control demand, see my column today (On Gas Taxes, the Voters Know) at the Club site on the continuing wisdom of Canadian and American voters. They've seen what happened to tobacco.


Anonymous Pigou Club said...

There is a small problem - Pigou Club is not endorsing Cap and trade schemes.

7:38 AM  
Blogger Terence Corcoran said...

Good to hear that Pigou Club is not endorsing Cap and Trade. But I don't know what the "problem'
is. The No Pigou Club does not endorse the,m either, which is why we inducted Fred Smith into the club. Although C&T strikes me as an idea that many Pigovians would like. Market forces, through trading, brought to bear to fix a problem. The price acts as a tax on carbon, getting even closer to the alleged root cause of climate change than a gasoline tax.
But I'm not here to argue the Pigovian case--just glad to have you on the right side of this issue.
Maybe a few of your members might want to take a look at the nopigouclub blog and Web (www.nationalpost...com/nopigouclub

11:33 AM  
Blogger Bernie said...


The word "genocide" appears three times in the first section of this article. Accepted definitions of genocide generally involve the mass killing of people belonging to a particular group. Selecting the black people in Africa for misery, disease, and death by deliberately depriving them of life-saving DDT is, therefore, consistent with the ordinary definition.

World energy rationing affects, however, a much broader socioeconomic group. This group is perhaps best defined by those who are not in it. Al Gore, for example, flies about in expensive personal jet planes, maintains multiple homes that use 10 times as much energy as those of ordinary people, and rides in gas-guzzling limousines. He obviously does not consider himself to be in the group who must submit to energy rationing.

World taxation, rationing, and shortages of energy will – assuming that political stability can be maintained – hurt primarily the poor, lower, and middle classes sufficiently to markedly increase their death rates. The upper classes within which the hysteria for global energy rationing has originated expect to maintain their own lifestyles with only minor inconvenience.

While, therefore, the group of people who have been selected for diminished lives, suffering, and death from energy rationing and the resulting technological decline is larger than that ordinarily associated with genocide, the number of likely deaths is also much larger than in previous genocides. We think the use of this term is appropriate and will not be confusing to the reader. more:

6:23 PM  

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