Michael Tobis wrote:
> > Well the easy answer here is that utility is not generally linear in
>> money, so although the first $1 might bring a positive expected return,
>> the last will not.
>
> A good answer that raises a lot of questions. Is this accounted for in
> economists' thinking?
Of course it is!
Stern uses a logarithmic utility, where 10% of a poor person's salary is
worth the same (in terms of overall global utility) as 10% off a rich
person's. There are arguments about how plausible this curve is,
especially in combination with the negligible discount rate. I don't
think anyone claims that the world works like this, but Stern asserts
that the world _ought_ to behave like this.
>
> A lot of possibly related issues about the regressive nature of carbon
> taxes seem to be trying to pop into my mind...
>
>> can I borrow your house and savings for a little while?
>> I'll give you them back in 100 years (index-linked of course), I'll even
>> add the overly generous return of 20% for your trouble.
>
> I think microeconomics is a straightforward if possibly complex matter
> but macroeconomics is not.
>
> I don't particularly want collective decision making to have the
> identical structure as individual decision making, and I don't see any
> reasoning why it should even be remotely similar.
>
> Indeed, I think the point of collective decision making is to increase
> the likelihood of beneficial results from individual decision making.
> The macro presents a very different concern than the micro.
Society is just the sum of all the individuals. I don't see how you can
propose society forgoing current wealth for the promise of the same
wealth in the future, and somehow believe that individuals that make up
society can avoid the same. Are you are saying that this sort of bargain
would be acceptable to you, so long as everyone else did it?
James
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