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Source link: http://archive.mises.org/5873/the-good-the-bad-and-the-pigovian/

The Good, the Bad, and the Pigovian

November 10, 2006 by

Statist economist Greg Mankiw launches a fresh offensive on freedom with the Pigou Club (to view which, you must register at facebook.com, but Mankiw describes it on his blog). There he and a familiar list of famous (Al Gore) statists and their fellow travellers advocate increased taxes on gasoline to bolster government revenues (now there’s a lofty goal) and alleviate global warming at the same time – a one, two punch as it were.

Terence Corcoran, editor of Canada’s National Post, has launched the NoPigou Club right out in the open, accessible like any other Web site, and you can join that one just by sending them an e-mail with your (real) name in it.

Corcoran and a growing list of nobodies like me hold that Mankiw’s proposed tax “is just another form of central planning dressed up in free market terminology.” Sour grapes from someone who didn’t get his snout into the trough fast enough? Well, after your snout’s been at the wrong end of the trough for long enough, you develop a taste for sour grapes.



Axel Riemer November 10, 2006 at 10:42 am

Also on the facebook is the group for NoPigou Club as well. With unfortunately a 10th of the numbers as the Pigou Club.

Bill November 10, 2006 at 11:00 am

I find it amazing how these elites can not see that the higher prices of fuel have spawned a whole bunch of auto manufactures to improve the fuel economy of their vehicles.

I also find it odd that years and years of fuel taxes in Europe and subsidies in the US have failed to produce the same thing.

I find it odder yet that their solution is to use more taxes and subsidies instead of the obvious solution that is let consumers force the suppliers to innovate. The suppliers faced with pressure from consumers will improve their vehicles by making them safer, more reliable, more fuel efficient and more pleasing.

Boerd November 10, 2006 at 1:12 pm

The list also includes other “statists” like Richard Posner, Alan Greenspan, Martin Feldstein, and Gary Becker!!

In other words, if you are not an anarcho-capitalist you are an “elite”, “statist”! F.A. Hayek, that goes for you too!!

And Rothbardians wonder why no one listens to them. They, like their mentor, have a habit for exaggeration and taste for “good-versus-evil” story telling.

Boerd November 10, 2006 at 1:14 pm

As a side note. Greg Mankiw did not set up the facebook account. And, as Axel notes, the NoPigou club is also on facebook.

Once again, the Rothbardian tenency toward moral outrage sacrifices truth for the sake of rhetoric. HA!

Ice Cream Headache November 10, 2006 at 1:55 pm

“The list also includes other “statists” like Richard Posner, Alan Greenspan, Martin Feldstein, and Gary Becker!!”

Don’t forget Bush’s former speech writer David Frum.

What’s next, a post comparing Ronald Reagan to Leon Trotsky? Margaret Thatcher to Breshnev?

As someone already pointed out there are facebook counterparts of both the Pigou (Mankiw’s site) and NoPigou websites.

If there was a way your entry could have been more wrong I certainly can’t think of it.

Stranger November 10, 2006 at 2:26 pm

There’s nothing sadder than watching a wing of the government fight another with “market tools”. Since the transportation system is owned by the government, it makes absolutely no difference how much consumers pay for gas. They have no alternative in transportation, so they’ll just pay the damn tax and keep using their car.

Ohhh Henry November 11, 2006 at 11:08 am

Check out the comments over on Mankiw’s blog (emphasis in the original):

“When they’re not afflicted by the Bolshevik mindset that pretty much defines contemporary libertarianism, most people will readily concede that many kinds of economic activity entails social costs — externalities — that can really only be effectively mitigated through public, i.e., government, action.”

RogerM November 11, 2006 at 12:05 pm

The Pig(ou)s are transfixed by externalities behind every rock! They remind me of the Right during the cold war who saw a communist behind every bush, or the conspiracy theorists who see the international bankers and/or Jews behind every world event. I wonder why they have chosen externalities as the great Satan, whom they must devote their lives to vanquishing? Could it be as the late Francis Schaeffer said of irreligious in the 1960′s, that having jettisoned all traditional absolutes they will one day grasp at arbitrary ones? That seems to be the way of the Left. They pick odd things like smoking, the environment, and externalities to devote their lives to eliminating.

Boerd November 11, 2006 at 2:58 pm


But this isn’t a question of taxing every single negative externality. This is a question of whether we should tax carbon emissions.

Even Rothbardians agree that negative externalities can exist in the presense of ill defined property rights. You would think that they would also see that externalities can exist even when property rights are well defined if transaction costs are high (like is most likley the case here).

But I guess I am hoping for too much. Like Rothbard, his students prefer to start with a conclusion (all taxes are evil) and work their way back from there.

RogerM November 11, 2006 at 3:17 pm

Boerd: “But this isn’t a question of taxing every single negative externality.”

It certainly is! Go read Mankiw’s block about his Pigou society. The thought of taxing externalities sends them into a state of ecstasy.

Besides, an externality exists only if GW were truely a problem. Since it ain’t, no externality exists and therefore no justification for taxation. But then the Left likes to start with a false conclusion, that CO2 emmissions cause global warming, then work backwards to an even more ridiculous solution.

von Schiller November 11, 2006 at 5:59 pm

If carbon emissions cause global warming, and global warming is bad, carbon emissions should be completely outlawed, because by what right do pigouvians allow people to suffer from global warming in order to generate tax income?

Ohhh Henry November 11, 2006 at 8:59 pm

“I wonder why they have chosen externalities as the great Satan, whom they must devote their lives to vanquishing?”

The answer of course, is self-interest. A dirigiste must find externalities behind every rock, because if externalities did not exist then he would have to get a real job. A cold warrior sees Reds under every bed for the same reason. A Bushist sees Islamists as the Great Satan because if he didn’t, then how else would he get his hands on all those oil contracts?

“Like Rothbard, his students prefer to start with a conclusion (all taxes are evil) and work their way back from there.”

When someone points a gun at my head in order to confiscate my property, it is their moral obligation to convince me why this is necessary, not the other way around. If they fail to do so, or if they can only come up with hazy, unquantified hypotheses about “warming” then there is no other word for their schemes except plunder.

Mathieu Bedard November 12, 2006 at 6:05 am

I applause this initiave, but why stop at environment? Birth also generates externalities, those who enter this activity will undoubtedly be sick some day and cause a threat to the health care system. Therefore we need a Pigouvian Tax scheme to limit this selfish, anti-public interest, activity.

RogerM November 13, 2006 at 9:14 am

The Pigous have created a new rationale for government–eliminating externalities. Traditionally, governments role was to fight crime and defend against external enemies. Then it became income redistribution. Now it’s supposed to get rid of all externalities.

Stephen Austra-Beck June 5, 2008 at 1:29 pm

I bet Canadian journalist (and enemy of rationality) Naomi Klein loves No Pigou Club.

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