I wrote: >> As I said before, all else constant (e.g., if incomes stay the same), >> a rising unit price of (say) coal would cause an _absolute_ fall in >> the quantity of coal demanded. I don't know of why this market -- or >> the market for any other kind of energy source -- could work any other >> way.
Tom: > We can agree that we don't live in a world in which all else is > constant. But IF we did then we've already precluded the case where > clean energy costs more than dirty energy. Actually, even in the real > world, it's not a given that dirty energy is necessarily cheaper. Dirty energy seems to be always more expensive than clean energy when we look at the true cost, but it's cheaper when we look at the market cost (price). Look at how wind- or solar-powered energy has struggled to compete, and it's not just the subsidies that the dirty energy sources get. Now, subsidies may allow the production wind- or solar-powered energy to benefit from economies of scale, so that this relative disadvantage goes away. Such subsidies (and the end of subsidies for and the imposition of taxes on) dirty energy seem a good idea in any event. >> What Tom seems to be saying (and I must admit I don't get it >> completely) is that an imposition of a carbon tax causes an endogenous >> increase in income and/or scale. Maybe Tom is right, but I haven't >> seen his explanation yet. > Your difficulty in seeing my point arises from your inability to "not > think like an economist". Tom, that's nonsense. I think like a non-economist a lot. (I regularly present _political_ analysis.) However, for the issue at hand, it's useful to think like an economist until someone can point to logical problems with it. Besides, it's rude to make assertions that someone's thought processes are flawed (referring to my "inability"). Instead, tell me the specific logical and/or empirical and/or methodological problems with what I say. > Things are either endogenous or exogenous > and if they are endogenous then one thing follows from another > nature-like as effect from cause. I assume that the above sentence is an effort to describe the economist's way of looking at things. But even for economists, exogeneity and endogeneity are always defined relative to the model or theory being discussed. What's exogenous for one model or theory (e.g., the demand for energy) can easily be endogenous in another model or theory. In making the endogenous/exogenous distinction, I was _only_ talking about one specific model/theory (the demand for energy). This distinction does not have to involve any kind of "nature-like" thinking (though it does so almost all the time for neoclassical economists). For example, in the classic experiment on cognitive dissonance, the message that the flying saucers were going to destroy the world and the cult should go out to the desert to meet the UFOs was an exogenous event (engineered by an unethical experimenter) while the social-psychological dynamics that resulted when the world did not end (ending with the collective conclusion that the world had been saved by the cult's faith) were endogenous. The endogenous part was hardly "natural." It also wasn't deterministic. > But, Jim, if growth is a political > imperative (which you appear to accept) then government policy will > intervene to compensate for the impact of an energy cost increase on > consumption (that is to say, in some hypothetical non-all-else-is- > constant world in which clean energy costs more than dirty). ... The political imperative is based on an economic imperative, the capitalists' lust for profits. I don't think we should assume that the government response that you posit is automatic. Maybe. If so, then we agree. But political processes are hardly deterministic. > ... The think is, I'm not talking about "market behaviors in > the absence of government intervention" or some such twaddle. > Intervention is the FOUNDATION upon which the market operates. I agree that markets without government intervention cannot exist for long (except when government-like institutions play a role). But I don't see how we can assume a specific government response. In the US, we see different government responses to pollution, for example, in the pre-neo-liberal era of the 1960s and early 1970s than we see in the current era. Politics is less deterministic than supply & demand. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
