It is time to stop quivering in our boots in pointless fear of the future and just roll up our sleeves and build it.
- Ray Pierrehumbert

Saturday, March 12, 2011

A Question

12 comments:

Michael Tobis said...

Pay no attention to the massive Tesla coils.

John said...

It's "monetary only" economics that is responsible for much, if not all, of our current problems.

Unless and until the economic system is based on energy efficiency and minimization of effects on our life-support system, i.e. the environment, we are simply accelerating our demise.

John Puma

Hank Roberts said...

http://www.cpeterson.org/2011/03/10/why-gas-is-so-expensive-today-hint-its-not-libya/

Speculation; links to sources in the original.

ScruffyDan said...

Yes. Economics is about utility which can in certain occasions be expressed as $.

At least that is what I was taught in school.

Tony Lee said...

Michael, is that screencap from a TED talk or similar? If so, do you have a link to the vidcast/podcast?

David B. Benson said...

Read The History of Money.

Michael Tobis said...

Tony, the picture I took was from the Ignite Austin event last night (associated with the South by Southwest conference); I don;t know where the original slide within the slide came from. The ignite Austin talks were of varying quality and I actually don;t recall which one this was.

They will probably show up as videos here eventually.

Michael Tobis said...

Dan, so they claim. But then they generally ignore non-monetary exchanges of utility as unimportant pretty much immediately.

Ron Broberg said...

Economics is a subset of Ecology - namely the extraction and transformation of energy and resources into products by homo sapiens. Just as language and society have allowed us to create a multi-generational culture unique but still embedded in the natural world, so has monetary abstraction allowed us to create an economy abstracted from but still embedded within the natural ecology.

http://en.wikipedia.org/wiki/Biophysical_economics

Compared and contrasted with
http://en.wikipedia.org/wiki/Physiocrats

Tony Lee said...

Thanks, Michael

manuel "moe" g said...

Yes, non-monetary economics *is* economics.

The economists that practice such don't enjoy true influence, but they *do* enjoy Nobel prizes. (Many awards are given as a signal it is OK to ignore the award winners. ;-)

Elinor Ostrom, Daniel Kahneman, George A. Akerlof, Joseph Stiglitz, Kenneth Arrow, George Stigler, Ronald Coase - these are fastidiously ignored by USA economic policy makers - USA economic policy makers are still under the spell of cartoon-carnival-Friedmanism (the actual Friedman was measured in scholarly work, 2nd order corrections to Keynes)

Non-Nobel winner: Mancur Olson, Hyman Minsky, Robert J. Shiller

rustneversleeps said...

This seems like an apropos place to mention this.

Ross McKitrick comments @ Climate Etc.: "The purpose of applying an emissions tax is to put a price on emissions. The purpose of a $10/tonne carbon dioxide tax is to make it $10/tonne more expensive to emit a tonne of CO2. The tax achieves its purpose by definition. If as a result of imposing what we believe to be the optimal tax on carbon dioxide emissions we observe that emissions do not subsequently fall, that tells us that the optimal policy does not entail much emissions reduction. But it doesn’t mean that the policy failed to achieve its purpose."

It seemed to me - much to my astonishment! - that he really was suggesting that achieving the price/tax was the objective in and of itself. irrespective of whether it had any effect (let alone a desired effect!) on the quantity of the thing being priced/taxed.

Surely that must not be what he meant, I naively thought. Otherwise, this would really the case where "non-monetary" isn't "real" economics. Heck, as long as you got a price on it - any price! - you would consider it a success. outcomes on emission quantities be damned!

Wouldn't you recalibrate, and at least consider that perhaps some of your initial assumptions about elasticity of demand and susbitutability were wrong?

Apparently not... Ross cures me of my naivete: "The price is the policy. In other words, if we start from the question “what is the optimal policy?” we could derive an optimal emissions level and propose the cost-minimizing mechanism to achieve it, or we could derive the optimal emissions price and apply it as a tax. It is a fallacy to suppose that “climate policy” has to prescribe a quantity of emissions. In economic analysis it is more natural and intuitive to think of determining the optimal emissions price."

Well golly! Surprise, surprise, surprise!

P.S. - Didn't McKitrick himself propose a carbon tax whose level was tied to a physical measure - i.e. surface temperature??? (ill-suited a measure as it was??)