littleboxes
Bad, Bad Leroy Brown
Baddest Man in the Whole Damn Town...
Some of us saw Cindy Sheehan on the Bill Maher show the other night.
By the way, an informal poll of our staff shows that the best joke from the Maher Show went something like this:
Oil Companies should stop making commercials about how they care about the environment. There are these commercials where they show birds, seagulls and pigeons and talk about how they want to protect animals. The only thing pigeons and oil executives have in common is that they would both steal french fries from a baby.
Most of us laughed. Sure oil executives are greedy vultures, but that is what they are paid to be. Their efforts to maximize their profits are what makes our economy efficient. Adam Smith and the invisible hand. Each person acting in their own best interests produces an efficient society. There is nothing wrong with making money.
But even an undergraduate economics major understands that this invisible hand rule is pretty simple and assumes that their are no hidden costs to one's actions. The costs are usually only hidden to the one imposing them on others. For example, the person whose water source is Lake Superior notices the costs of water pollution in the lake, but the company that dumped their waste there 50 years ago certainly did not ever see the costs (they were hidden).
How do we reconcile our conservative beliefs with our understanding that externalities do exist? Do we trust that the market will produce technology to clean up environmental problems or that if it really did hurt consumers they would negotiate with companies and compensate them for not polluting their water?
Well, Lake Superior water drinks may bear the full costs of Lake Superior water pollution and they may be the sole beneficiaries of any clean up. Why would they not clean it up? If it was really worth it to them why wouldn't they clean it? Well, this could be a free rider problem in that the entire group of Lake Superior water drinkers must contribute money to clean up the lake. But even if one person doesn't contribute they will benefit from the clean-up. Thus all these rational people will tend to underfund clean-up efforts since they rationalize that they can minimize their contribution but still receive the benefits. Thus the market may not produce a technology because no one will pay for it.
Can consumers negotiate with companies? Where would this happen? Well, in the court room for one. We say John Travolta in Civil Action and we know you can sue companies for pollution or harms to your health. But as conservatives we kind of hate these type of lawsuits. But, at least in some cases, they are obviously good things as they make companies realize their hidden costs and this may cause them to pollute less or not at all. Of course, these lawsuits usually happen after pollution has occured.
Unfortunately, these costs are not has hidden as first implied. If they are so hidden from corporations why do they go to great lengths to hide environmental harm? For years some corporations polluted and did it in secret. Why? Did they realize the costs and just didn't want to pay? If they did it in secret they must have known that their actions would be unpopular and might even cause harm to people (like Lake Superior water drinkers). Since the knew about the costs they must have known that people might actually pay them to dispose of their waste in an environmentally friendly way.
Why did they not approach people and ask them to pay? Did they know about the free rider problem and that they just couldn't get enough cash to dispose of waste properly? Did they want to negotiate but they didn't know who to talk with? Or did they think that it was worth more to them to pollute than it was for others to keep the environment clean, meaning that people could never compenstate them enough to not pollute?
If this last point is true than the market simply has not created the incentives for negotiation. If the savings from polluting are greater than the potential compensation from consumers for being environmentally friendly than there is no reason for companies to approach consumers to ask them to pay for clean disposal.
But then why advertise about being environmentally friendly? Why care? The only way they must care is if there is some cost associated with being perceived as environmentally unfriendly. This cost must be greater than the cost of making and airing commercials.
there is no point, only writing...
-Marcus and the gang
Some of us saw Cindy Sheehan on the Bill Maher show the other night.
By the way, an informal poll of our staff shows that the best joke from the Maher Show went something like this:
Oil Companies should stop making commercials about how they care about the environment. There are these commercials where they show birds, seagulls and pigeons and talk about how they want to protect animals. The only thing pigeons and oil executives have in common is that they would both steal french fries from a baby.
Most of us laughed. Sure oil executives are greedy vultures, but that is what they are paid to be. Their efforts to maximize their profits are what makes our economy efficient. Adam Smith and the invisible hand. Each person acting in their own best interests produces an efficient society. There is nothing wrong with making money.
But even an undergraduate economics major understands that this invisible hand rule is pretty simple and assumes that their are no hidden costs to one's actions. The costs are usually only hidden to the one imposing them on others. For example, the person whose water source is Lake Superior notices the costs of water pollution in the lake, but the company that dumped their waste there 50 years ago certainly did not ever see the costs (they were hidden).
How do we reconcile our conservative beliefs with our understanding that externalities do exist? Do we trust that the market will produce technology to clean up environmental problems or that if it really did hurt consumers they would negotiate with companies and compensate them for not polluting their water?
Well, Lake Superior water drinks may bear the full costs of Lake Superior water pollution and they may be the sole beneficiaries of any clean up. Why would they not clean it up? If it was really worth it to them why wouldn't they clean it? Well, this could be a free rider problem in that the entire group of Lake Superior water drinkers must contribute money to clean up the lake. But even if one person doesn't contribute they will benefit from the clean-up. Thus all these rational people will tend to underfund clean-up efforts since they rationalize that they can minimize their contribution but still receive the benefits. Thus the market may not produce a technology because no one will pay for it.
Can consumers negotiate with companies? Where would this happen? Well, in the court room for one. We say John Travolta in Civil Action and we know you can sue companies for pollution or harms to your health. But as conservatives we kind of hate these type of lawsuits. But, at least in some cases, they are obviously good things as they make companies realize their hidden costs and this may cause them to pollute less or not at all. Of course, these lawsuits usually happen after pollution has occured.
Unfortunately, these costs are not has hidden as first implied. If they are so hidden from corporations why do they go to great lengths to hide environmental harm? For years some corporations polluted and did it in secret. Why? Did they realize the costs and just didn't want to pay? If they did it in secret they must have known that their actions would be unpopular and might even cause harm to people (like Lake Superior water drinkers). Since the knew about the costs they must have known that people might actually pay them to dispose of their waste in an environmentally friendly way.
Why did they not approach people and ask them to pay? Did they know about the free rider problem and that they just couldn't get enough cash to dispose of waste properly? Did they want to negotiate but they didn't know who to talk with? Or did they think that it was worth more to them to pollute than it was for others to keep the environment clean, meaning that people could never compenstate them enough to not pollute?
If this last point is true than the market simply has not created the incentives for negotiation. If the savings from polluting are greater than the potential compensation from consumers for being environmentally friendly than there is no reason for companies to approach consumers to ask them to pay for clean disposal.
But then why advertise about being environmentally friendly? Why care? The only way they must care is if there is some cost associated with being perceived as environmentally unfriendly. This cost must be greater than the cost of making and airing commercials.
there is no point, only writing...
-Marcus and the gang
posted by littleboxes at 5:18 PM
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