How should negative externalities be handled? (Warning: politics)

It's important to remember that, as our society is structured, the market is -defined by the government-. Capitalism, in our society, is in fact a form of regulation.

Yes. Property is theft. And while I'm a big fan of private property, I also think it's often really is theft.

Negative externalities are theory dependent, like property. What counts as 0 externality? If the girl you want prefers me, is that a negative externality? I wouldn't think so, because my rules of justice distinguishes between what I consider best and what I'll try to require by force from people.

First activity - determine what you think is 0 before you try to figure out what to do about negatives.

This seems intuitively likely, but, on the other hand, we thought the same thing about telecommunications, and our early move to nationalize that under the Bell corporation was wholeheartedly disastrous, and continues to haunt us to this day. I... honestly don't know. I suspect that some level of intervention is optimal here, but I'm not sure exactly how much.

In the case of water, if we were required to move water in tanks rather than pipes, water would be more expensive and traffic would be worse, but we'd also probably see far less wasted water and more water conservation.

It is not possible to create "big private monopolies" in a free market. That is simply a strawman. Monopolies are only possible with government sanction. Regulation is the tool by which this outcome is achieved.

There is a principle in economics called Theory of the Second Best, whereby if a market failure cannot be corrected, it may be better from a welfare and systemic hazard perspective to substitute it for a satisficing but suboptimal mechanism.

Examples would include ham-fisted government intervention, which are strictly worse than an idealised market solution, but generally better than what a realistic market solution will actually provide.

I think taxes works better. Cap and trade is good if there's a specific amount that's perfectly fine, but anything beyond that is horrible. In practice, it's generally going to be that the costs are fairly linear. If you increase CO2 emissions by x, it will cause a cost of kx, for some k. Just tax people by kx. In order for cap and trade to work, you'd have to know in advance how much CO2 emmissions is ideal.

Also, from what I understand, they are giving people a certain amount of CO2 emissions or whatever it is they are trading, rather than just auctioning it off to begin with. This causes people to try and fight over who gets them to begin with, since you're essentially just giving them money for no good reason.

If that's impossible (because of difficulties in getting international binding targets, for instance), then subsidies, rather than regulations, seem the most efficient way.

Subsidizing efficiency improvements sometimes leads to a net increase in pollution, and so this is more appropriate for things like subsidizing disruptive technologies than subsidizing improving existing coal plants.

probably underestimated

I'm under the impression that nuclear is one of the few where decommissioning costs are baked into the operating costs, and thus comparisons between it and other technologies are biased against nuclear.

That does seem like a better idea, ignoring issues of price setting. Unfortunately, nation states are extremely bad at game theory, and it's difficult to achieve international agreement on these issues, especially when it will impact one nation disproportionately (China would be much harder hit, economically, by cap-and-trade legislation than the US).

I'd disagree pretty strongly with the energy issue, at least for now - but that's a discussion for another time. In politics, as in fighting couples, it is crucial to keep your peas separate from your pudding - one issue at a time.

Many interventions in the economy have a positive expected benefit. (I should note that libertarians can concede this point, yet argue against interventions because they infringe people's rights etc)

Goalpost-shifting between consequences and virtues is characteristic of argument with libertarians, often in one argument with a single libertarian. It can be more infuriating than attempting to pin a Christian down on a claim.

Edit: Argumentative Internet self-declared libertarians, to be fair, per SMBC.

Your mention of wanting to "preclude blackmail, theft, and slavery" implies that you would like to see cooperative production between genuine equals, not relations of dominance or exploitation.

It really doesn't imply that in the least.

Being opposed to "blackmail, theft, and slavery" does not imply that you think that we're all "genuine equals", nor that you'd have any particular wish for that state, nor that even if you had such a wish, it would inform your political opinions in this world where people are decidedly unequal in talents, ethics, drive, and execution.

the prevention of inherited structures of power through inheritance tax and less income inequality

I have two problems with this. First, part of the idea of personal property is that you can do what you want with it. That's what makes it a good incentive. If what you want to do with it is give it to your kids, it's not the governments place to stop you and accuse you of nepotism. If you want to be nepotistic, then the economy can offer you the opportunity of giving money to your kids as incentive, and we will be better for it.

The second problem is that it's hard to stop. Unless they stop you from giving money away as well, it just means that only people who don't know they're about to die get taxed.

I most certainly do not think you are born with the rights to your parents money. If I did, I'd be against the use of wills.

free education for all to ensure equality of opportunity

If they just gave you money, you'd still have all the opportunity, and then some because now you can do something else with the money. It's not a good use of resources for everyone to be educated, and subsidizing it wastes money just as surely as subsidizing corn.

information campaigns to help end harmful social roles/scripts/stereotypes of gender, race and sexuality.

That sounds like a straight-up public good. The main problem here is that you're giving the government free reign over propaganda, and that might not be something you want to trust them with.

Personally, I'm what I'm thinking of calling a quasi-libertarian. I do think you should generally try to get the government from being involved, but what's more important is that when they are involved, they use market forces to their advantage, rather than just ignoring them.

anti-trust law, laws against false advertising, corruption laws.

I'll give you the false advertising. Anti-trust laws do not seem like an obvious win in the case of natural monopolies; for example, destroying Google and giving an equal share of their resources and employees to Bing, Yahoo, and Ask.com does not seem obviously likely to improve the quality of search for consumers. As for anti-corruption laws, I'd need to see a much clearer definition before I gave you an opinion.

Your mention of wanting to "preclude blackmail, theft, and slavery" implies that you would like to see cooperative production between genuine equals, not relations of dominance or exploitation.

That's true, but I suspect you're using those words in a substantially different sense than I would intend. Let's clarify: I believe that it is undesirable for someone's freedom (in a Libertarian theoretical sense of free use of their own body, autonomy, and property) to be dependent on the amount of violent physical force that other economic players are able to muster. This does not imply most of the other things you suggest.

As it happens, I'm on the fence about public education. It seems like a good idea in principle, but having been through the process myself, I cannot endorse it with good conscience. Furthermore, I am uneasy granting the government a monopoly on indoctrination of youth, which is a major component of any education.

As for inheritance tax, I don't think that's either enforceable or desirable. If people want to care for their children after they are dead, that doesn't harm me at all, and I wish them well. As for information campaigns, government propaganda, however much I may agree with this generation of ideals, is not something I particularly want to fund. Governments do not generally give power back once it's been given to them, and, when you give a government a power, you must trust not only the current administration, but every future one for the lifespan of the country. On the whole, it seems wiser to allow private organizations to blanket the world in propaganda as they see fit.

Oh dear. We seem to have strayed quite far from libertarianism.

You certainly seem to. I think I'm comfortable where I am, thank you. This specifically is actually my complaint about much political discussion. Whenever anyone expresses any doubt about the details of their political beliefs, people from other camps flock like carrion-birds to try to convert them to the righteous path. This leads to people not discussing doubts for fear of appearing weak to the damn, dirty greens, and forces people into unnecessarily extreme positions.

information campaigns to help end harmful social roles/scripts/stereotypes of gender, race and sexuality.

We had those, the problem is that it turns out those stereotypes were in fact true.

Something to keep in mind is that different people use the word "capitalism" to mean different things. Many libertarians and Objectivists say "capitalism" to mean a free-market economy with dramatically less regulation and taxation than we have today. However, many socialists and anarchists use "capitalism" to mean the sort of economy that we do have today, dominated by big businesses and finance capital. Others use expressions such as "mixed economy" and "crony capitalism" to imply various combinations of competitive free enterprise, regulation, and favoritism for the politically well-connected.

So some readers will take your comment as meaning that free enterprise requires state support; while others will take your comment as meaning that today's mixed economy requires state support.

always seemed to me "externality" was just a euphemism to cover up the fact that capitalist enterprise requires massive--not a hand out here or there--state support (and planning) to functional at all.

Externalities pre-date the modern capitalist system. For example, in England, well before modern capitalism, restrictions on smelting and similar industries existed to prevent them from polluting surrounding neighborhoods. These concerns are even older than that. The Talmud discusses the legality of farming flowers that make for bad tasting honey when bees use them to make honey, and when one can plant such flowers near the property of someone who owns beehives. Similar issues with water rights also date to the early Middle Ages in some respects. There's nothing inherent about "capitalism" here, merely economic activity as a whole.

Most libertarians do. When the government is passing out handouts, libertarians are the ones most likely to complain.

I do agree that many Americans are largely in denial about the extent of government control of the economy.

I think people talk more about negative externalities, which are fought through taxes, not encouraged through state support.

Much of what is encouraged through state support has nothing to do with externalities. For example, growing corn has no significant externalities, but it is heavily subsidized.

At any rate anyone who opposes central planing and "big government" also opposes capitalism in it's extant form.

In other words, if we oppose big government, we oppose the current government, because it's big? I think that's generally what people mean when they say they oppose big government, unless they're arguing with a communist that wants it even bigger.

With central planning, how do you figure out how many of each product to make?

If we have enough power to do functional distributed planning, we have enough computational power to do functional central planning.

The calculations that are most relevant are the valuations people put on things - I prefer this over that. No, you don't have enough artificial computing power to detect and properly simulate the choices of 6bil+ humans.

The most interesting question for me is what do we do if, as seems likely, automation and technological development produces an abundance of goods and leisure time.

I expect quite a lot of this within ten years.

For instance, there are about 3.5 million truck drivers in the United States, and there is a shortage of new drivers. Self-driving cars will probably launch in a few years. Self-driving trucks are sure to follow. That puts the truckers out of work.

Other goods-handling jobs are already being automated; for instance, there are fully-automated warehouses using automated storage & retrieval systems. If Amazon and FedEx aren't working on universalizing this, they're fools — and they're not fools.

Meanwhile in San Francisco, hackers are delivering burritos by drone. And delivery robots have been used in closed environments such as hospitals for years and years.

There's synergy here: automated warehouses + self-driving trucks + delivery robots → the Internet of physical goods. Stick a barcode on an arbitrary object and fill out a web form, and a robot comes and gets that object delivered anywhere accessible by road anywhere in the free world. Awesome for customers, manufacturers, and whoever owns the tech and gets paid for it. Not awesome for the workers in the whole swaths of industries being replaced.

As automation rises, the skill level needed to be economically productive rises too — and, as you mention, "the gains from capital massively outweighing the returns from labour". Or rather, the rents accruing to the existing owners of infrastructure; without there necessarily being much avenue for new participation. Unless the Internet of physical goods has open standards and peering points, whoever runs it can lock everyone else out.

I've heard this sort of thing before, and I've never been totally sold on the idea of post-scarcity economics. Mostly because I think that if you give me molecular nanotechnology, I, personally, can make good use of basically as much matter and energy (the only real resources) as I can get my hands on, with only moderately diminishing returns. If that's true for even a significant minority of the population, then there's no such thing as a post-scarcity economy, merely an extremely wealthy one.

In practice, I expect us all to be dead or under the watchful eye of some kind of Friendly power singlet by then, so the point is rather moot anyway.

The most interesting question for me is what do we do if, as seems likely, automation and technological development produces an abundance of goods and leisure time.

Anything abundant, such as air, we will use freely as we do now. Anything scarce, such as front row seats to a live concert, we will either distribute using an economy as we do now, or we will distribute with central planning, because that works a lot better when you have a superintelligent AI as the planner.

Also, I'm skeptical of it it so most stuff is abundant. We will simply increase the population until it's scarce again.

If this future comes about, how should we structure our economy and society?

We can just use simple wealth redistribution. Tax everyone X%, and evenly distribute the money. I would not recommend communism unless you have a superhuman AI central planner.