Posted by: graemebird | March 23, 2009

Sado-Pigouvianism: The Third Paradigm.

I had my drumming teaser. And that ended with Mankiw coming in, taxing the drummer, taking the money and sending it off to Canberra, so that some lunatic like Nick Gruen, could open up another department to produce documents for hundreds of thousands of dollars apiece when we could just buy a book. Or alternatively Gruen would blow the money on a stimulus package.

Not entirely satisfying for the drummer, his parents, or the Maori next door, whom the drumming is annoying.

Suppose its not the law. Suppose its a wise man or tribal elder. Or just someone that people go to in dispute resolution. Suppose he says (in the context of their being no income tax) that the kid, in a show of goodwill, ought to commit a stipend every week to a bank account. And that then both the Maori and he need to sign to get that money out, in order to buy something they’ve agreed upon that will fix the situation…. Maybe a practice pad…. Maybe some way of deadening the sound coming out from where he’s playing the drums.

If the consultation all ended in smiles and an apology from the Maori for threatening violence would THAT not be the best remedy?

Not a tax to be frittered away by assholes in Washington or Canberra…. But rather EARMARKED INVESTMENT MONEY.

I put this in, not as a perfect solution to so-called externalities…. But merely as a THIRD PARADIGM. In the hope that I will break through this logjam that people seem to have with this pro-Pigou, anti-Pigou silliness. I’m anti-Pigou in principle. But that doesn’t mean I’m going to be in some sort of technical denial in some cases where there is a bit of an economics case.

Now supposing you have the Hudson river. And its just after World War II. And everyone up and down the river is polluting that river.

Now what you could do is tax people and they’d cheat. And they’d fudge their figures as to the effluent. Or what you could do is earmark the money into a separate account. And you try and get them to put aside this money. Its like our Super fund. They can control it. Its their money. They can make it make a better return. But at that time, up and down the river…. at THAT time….. when its felt that all players really do have more than enough funds to trigger a general solution…….. then by common consent the time of the trigger can be agreed upon. And within 1 year of everyone agreeing to the trigger, most of them have their remainder money back, and the Hudson is worthy of swimming in again. Because they’ve made the necessary investments to minimise their effluent going into the river, and they’ve got most of the money back…. or at least most of them have with some of them still saving up for a better investment solution later.

Now isn’t that a better third paradigm?

Can we apply this third paradigm to the paradox-of-land problem that I’ve alluded to before? Well I don’t think we can do this perfectly. But I think we can do this a great deal more successfully than with the other two paradigms.

Think about how crappy sado-pigouvianism is. The problem with it is that you have to pay this fucking tax!!!!!…. So where are you getting to get the resources money to fucking solve the problem. Like what are we saying here? Like we’ve got to fucking pay TWICE???? How can THAT ever be good and righteous? Because surely if there is a problem, its a problem that ought to be solved and the only way to solve it is by investment.

Thats why this pigouvianism is no good.

Its not that they don’t have a technical case in some situations. Its because the solution is no solution and prevents a well-meaning solution that comes from fucking investment for fucksakes.

You people can be so blind you know.

And hurtful.



  1. Pathbreaking insights into economic science. And this…… THIS!!!!! is what we get from Jason Soon:

    “Bird has posted another Obama gay sex scandal video.”

    What a tawdry, gutter-performance from Catallaxy………. (Heathen).

  2. I mean its just typical isn’t it.

    It’s the same thing we saw with the fake Hanson photos.

    These idiot lying leftists don’t want to talk policy because they know they can only win by lying and filibustering.

    So they try to drag it all down into the gutter.

    Just really despicable.

    • I hear you Ron. Despicable. Tawdry. Upsetting. Dissapointing. Saddening……… and yet…………………….. TYPICAL.

  3. “When social costs exceed private costs then a tax should be imposed.”

    If DH feels like confiscating your private property, then he’s just going to go ahead and do it.

    Typical Marxist.

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