[Economics 102] Robert Frank Agitates For Pigovian Taxes
David V. Loewe, Jr
anything...
http://www.nytimes.com/2009/12/06/business/economy/06view.html
"To eliminate deficits, we need additional revenue. The encouraging news
is that we could raise more than enough to balance government budgets by
replacing our existing tax system with one that taxes activities that
cause harm to others. Called Pigovian taxes by economists � after the
English economist Arthur Cecil Pigou � such levies create a burden that
is more than offset by the reductions they cause in costly side effects
of everyday activities."
The problem I have with this approach is the wildly differing notions
you are going to get of what causes "harm."
For example, Frank expostulates that heavier vehicles cause harm to
other vehicles in a crash. But heavier vehicles generally have better
crash ratings for drivers and passengers - and such things are also
good. Moreover, unless I *get into a crash* the heavier vehicle I could
be driving is no more harmful to persons in other vehicles than clean
air.
--
"In 1980 I found myself seated next to the former president of Mexico
at a ski-area restaurant. What, he asked amiably, had I done when I
lived in Mexico? "I tried to undermine your regime, Mr. President."
He thought this amusing..."
William F. Buckley, Jr.
David Friedman
"David V. Loewe, Jr" <dave...@charter.net> wrote:
> For example, Frank expostulates that heavier vehicles cause harm to
> other vehicles in a crash. But heavier vehicles generally have better
> crash ratings for drivers and passengers - and such things are also
> good.
Safety for the driver is a benefit the driver gets, hence one he takes
account of in deciding how heavy a car to get. Risk to people he might
run into, on the other hand, is an external cost. The idea of a
Pigouvian tax is to impose external costs (and benefits) on the decision
maker, to make it in his interest to make the decision that maximizes
total benefit, including costs and benefits to other people.
There are a lot of practical difficulties with the approach, since
external costs and benefit are not always easy to measure--in practice,
you can easily end up counting only external costs of things you don't
like--at a high estimate--and ignoring external benefits, or the other
way around. You then end up with a sophisticated sounding argument for
taxing things you don't like and subsidizing things you do.
But it does have an internal logic to it.
--
http://www.daviddfriedman.com/ http://daviddfriedman.blogspot.com/
Author of
_Future Imperfect: Technology and Freedom in an Uncertain World_,
Cambridge University Press.
David Loewe, Jr.
<dd...@daviddfriedman.nopsam.com> wrote:
> "David V. Loewe, Jr" <dave...@charter.net> wrote:
>
>> For example, Frank expostulates that heavier vehicles cause harm to
>> other vehicles in a crash. But heavier vehicles generally have better
>> crash ratings for drivers and passengers - and such things are also
>> good.
>
>Safety for the driver is a benefit the driver gets, hence one he takes
>account of in deciding how heavy a car to get.
My point here is that a certain amount of vehicle safety is *mandated*
by the government.
>Risk to people he might
There is that pesky word again.
I contend that the vehicle, as long as it is not in an accident, is no
riskier than any other vehicle. In fact, a larger vehicle, being more
visible, may pose less of a risk.
>run into, on the other hand, is an external cost. The idea of a
>Pigouvian tax is to impose external costs (and benefits) on the decision
>maker, to make it in his interest to make the decision that maximizes
>total benefit, including costs and benefits to other people.
>
>There are a lot of practical difficulties with the approach, since
>external costs and benefit are not always easy to measure--in practice,
>you can easily end up counting only external costs of things you don't
>like--at a high estimate--and ignoring external benefits, or the other
>way around. You then end up with a sophisticated sounding argument for
>taxing things you don't like and subsidizing things you do.
How do we go about taxing those who impose risks on society by crossing
the street at places that are not crosswalks or intersections?
>But it does have an internal logic to it.
Finally, don't we already impose a Pigouvian type cost on vehicles
anyway - in the form of mandated Collision and Medical insurance?
--
"The tree of liberty must be refreshed from time to time with the
blood of patriots and tyrants."
- Thomas Jefferson
Jette Goldie
>
> How do we go about taxing those who impose risks on society by crossing
> the street at places that are not crosswalks or intersections?
>
I thought jaywalking was a crime in the US - isn't it punishable with
a fine?
--
Jette Goldie
jette....@gmail.com
http://www.flickr.com/photos/wolfette/
http://www.jette.pwp.blueyonder.co.uk/
http://wolfette.livejournal.com/
("reply to" is spamblocked - use the email addy in sig)
David V. Loewe, Jr
<jgold...@btinternet.com> wrote:
>David Loewe, Jr. wrote:
>> How do we go about taxing those who impose risks on society by crossing
>> the street at places that are not crosswalks or intersections?
>I thought jaywalking was a crime in the US - isn't it punishable with
>a fine?
They have to catch you in the act (and the cop has to decide to give you
a ticket if he does catch you in the act). Mr. Frank wants to charge
owners of larger vehicles whether they drive a lot or a little and
whether or not they actually get into an accident where the properties
he considers dangerous come into play or not.
--
"You roll out of bed, Mr. Coffee's dead - The morning's looking bright
And your priest ran off to Europe - And didn't even write
And your husband wants to be a girl ....."
Gary Portney
Keith F. Lynch
> David Loewe, Jr. wrote:
>> How do we go about taxing those who impose risks on society
>> by crossing the street at places that are not crosswalks or
>> intersections?
> I thought jaywalking was a crime in the US - isn't it punishable
> with a fine?
Like most laws, it varies widely among the fifty states. Here in
Virginia, it's not a crime.
I believe it's generally safer to cross in mid-block than at an
intersection. Mid-block, motorists are looking straight ahead and
their headlights are shining straight ahead. At intersections, many
motorists face one way while turning the other. And when a car is
turning its headlight aren't pointing where it's going.
The only times I've ever been hit by a car was in an intersection,
when I had the right of way.
The person at risk from a car-pedestrian collision is the pedestrian.
The idea that he should be taxed or punished is absurd. Pedestrians
where here first. It's cars which imposed risks on pedestrians, not
vice versa. Just when did we vote to turn over the whole of the
outdoors to motorists, and what did the rest of us get in compensation
for this enormous transfer?
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.
David V. Loewe, Jr
<k...@KeithLynch.net> wrote:
>Jette Goldie <boss...@scotlandmail.com> wrote:
>> David Loewe, Jr. wrote:
>>> How do we go about taxing those who impose risks on society
>>> by crossing the street at places that are not crosswalks or
>>> intersections?
>
>> I thought jaywalking was a crime in the US - isn't it punishable
>> with a fine?
>
>Like most laws, it varies widely among the fifty states. Here in
>Virginia, it's not a crime.
>
>I believe it's generally safer to cross in mid-block
The data, which has been presented here to you before, says otherwise.
>than at an
>intersection. Mid-block, motorists are looking straight ahead and
But they also aren't expecting pedestrians to cross there, either.
>their headlights are shining straight ahead.
Not applicable for half of the year - which happens to be a time with
more traffic than the dark half.
>At intersections, many
>motorists face one way while turning the other.
You display a grave lack of knowledge of how to drive.
For example, 100% of drivers should be looking over their shoulders
while moving forward in order to ensure the lane is clear before
attempting a lane change.
The driver *should* absolutely be looking elsewhere to find that car
that is going to plow into them as they turn at an intersection. They
should not be moving forward at anything better than a fast crawl while
doing this. But that fast crawl pace isn't enough to do you damage - as
you have already said you've never been hurt in any of these collisions.
>And when a car is
>turning its headlight aren't pointing where it's going.
http://wikicars.org/en/Directionally_Adaptive_Headlights
>The only times I've ever been hit by a car was in an intersection,
>when I had the right of way.
A) Most people have never been hit by a car.
B) Most people who are *alive* after being hit by a car were hit in
places like intersections and parking lots where cars were going at
relatively low speeds on the main as opposed to being hit in the middle
of the road, as someone crossing at other than an intersection or
crosswalk would be, where the cars would be going much faster (and
inflicting more damage) on the main than elsewhere.
>The person at risk from a car-pedestrian collision is the pedestrian.
>The idea that he should be taxed or punished is absurd.
By Pigouvian logic, if the pedestrian increases the risk - as he does by
jaywalking, he should be taxed to account for that increased risk.
>Pedestrians where here first.
So?
>It's cars which imposed risks on pedestrians, not vice versa.
One can easily imagine Keith in a previous incarnation getting all
worked up over the dangers of horses clomping around on the streets.
>Just when did we vote to turn over the whole of the
>outdoors to motorists, and what did the rest of us get in compensation
>for this enormous transfer?
--
"You tell 'em I'M coming... and Hell's coming with me, you hear?!
Hell's coming with me!"
- Kurt Russell as Wyatt Earp in Tombstone
plausible prose man
wrote:
> In an effort to boost traffic and promote discussion of something -
> anything...
>
> http://www.nytimes.com/2009/12/06/business/economy/06view.html
>
> "To eliminate deficits, we need additional revenue. The encouraging news
> is that we could raise more than enough to balance government budgets by
> replacing our existing tax system with one that taxes activities that
> cause harm to others
There's just no way this could possibly be true. According to this,
annual US tax revenue is about a trillion dollars.
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=203
Do you think there's over a trillion dollars in uncaptured
externalities in the economy?
>. Called Pigovian taxes by economists — after the
> English economist Arthur Cecil Pigou — such levies create a burden that
> is more than offset by the reductions they cause in costly side effects
> of everyday activities."
Sometimes, this doesn't work. Tyler Cowan describes how his son's
school found parents were, surprisingly, happier to pay some nominal
fee and pick their kids up later, and that the "hairy eyeball" was
actually more of a disincentive. Also, it would seem an ideal
pigouvian tax would be revenue-nuetral, and at least some
disincentive. This, by the way, is the imaginary, perfect version, and
not the one the teamsters and AMA and the teacher's union have some
say in writing.
Still, the point stands, if the tax doesn't transfer money from the
externalitor to the externalitee, well, it's not all that pigouvian
anymore, and the article suggests all the revenue is going into the
general fund for, you know, mostly the army and social security and
interest on the national debt.
> The problem I have with this approach is the wildly differing notions
> you are going to get of what causes "harm."
Among the many problems with this approach are...
I have read someplace that "externality" isn't just someone,
somewhere doesn't like something someone else does, but would actually
be willing to pay that person money not to do something, or the other
fellow is willing to pay money to do something, like pick up his kids
fifteen minutes late from day care, but both cannot due to the absence
of a market mechanism.
> For example, Frank expostulates that heavier vehicles cause harm to
> other vehicles in a crash.
Sure, okay. This is quickly going to sound like David's thing about a
line of pike men that he likes to use to illustrate "market failure,"
except I understand most crashes are single vehicle, so an individualy
rational decision doesn't totally impose costs on other people.
> But heavier vehicles generally have better
> crash ratings for drivers and passengers - and such things are also
> good.
I am not totally sure this is true, but if Walter Neff's boss is any
guide, the insurance companies all have a very clear idea as to which
vehicles are safest, on average.
> Moreover, unless I *get into a crash* the heavier vehicle I could
> be driving is no more harmful to persons in other vehicles than clean
> air.
Huh, I don't know, there's the pollution, as well. Still, it would
seem easy enough to figure out what's the average vehicle from the
standpoint of safety or pollution or whatever other externalities you
can identify, and then base some tax/subsidy on your choices deviation
from the mean. Your registration could cost more or less, or maybe
they'd even pay you, depending on whether you were driving a Brinks
armored car, or a street legal go-cart.
Then again, insurance companies already do something like that, so...
Keith F. Lynch
> I have read someplace that "externality" isn't just someone,
> somewhere doesn't like something someone else does, but would
> actually be willing to pay that person money not to do something, or
> the other fellow is willing to pay money to do something, like pick
> up his kids fifteen minutes late from day care, but both cannot due
> to the absence of a market mechanism.
One problem with paying people to stop doing something obnoxious is it
might encourage people to start doing obnoxious things so that other
people will pay them to stop.
> Huh, I don't know, there's the pollution, as well. Still, it would
> seem easy enough to figure out what's the average vehicle from the
> standpoint of safety or pollution or whatever other externalities
> you can identify, and then base some tax/subsidy on your choices
> deviation from the mean. Your registration could cost more or less,
> or maybe they'd even pay you, depending on whether you were driving
> a Brinks armored car, or a street legal go-cart.
And would those of us who don't drive at all be paid the most?
David Friedman
<ac35942a-69e6-435f...@b15g2000yqd.googlegroups.com>,
plausible prose man <George...@aol.com> wrote:
> Still, the point stands, if the tax doesn't transfer money from the
> externalitor to the externalitee, well, it's not all that pigouvian
> anymore, and the article suggests all the revenue is going into the
> general fund for, you know, mostly the army and social security and
> interest on the national debt.
Actually, you have this backwards. From the standpoint of controlling
externalities, the last person you want the money to go to is the victim.
The reason is that, as Coase pointed out, the division into tortfeasor
and victim is in an important sense arbitrary. A dorm mate playing loud
music late at night wouldn't impose an external cost on me if it weren't
that I had left my studying to the last minute and decided to do it in
the dorm instead of the library. The problem could be avoided by either
his changing his behavior or my changing mine. Hence it is more
accurately described as a problem jointly caused by both of us.
Ideally, we want each of us to have an incentive to change--just enough
incentive to make us change if doing so results in less cost than not
changing. A Pigouvian tax gives one party an incentive to change his
behavior. But if it goes to the other party, as in the case of tort
damages, it reduces his incentive to change his.
Keith F. Lynch
> A dorm mate playing loud music late at night wouldn't impose an
> external cost on me if it weren't that I had left my studying to the
> last minute and decided to do it in the dorm instead of the library.
What if you were trying to sleep? I'd call being unable to sleep
a cost.
> The problem could be avoided by either his changing his behavior
> or my changing mine. Hence it is more accurately described as a
> problem jointly caused by both of us.
But if he suspects you might be willing to pay him to be quiet, that
might be the whole reason he's making noise -- he's hoping you'll pay
him to stop.
David Friedman
"Keith F. Lynch" <k...@KeithLynch.net> wrote:
> David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
> > A dorm mate playing loud music late at night wouldn't impose an
> > external cost on me if it weren't that I had left my studying to the
> > last minute and decided to do it in the dorm instead of the library.
>
> What if you were trying to sleep? I'd call being unable to sleep
> a cost.
Yes. I was taking one example. As it happens, loud music doesn't
generally keep me from sleeping.
The general point is that the problem is jointly caused by my actions
and his. There are some things I could be doing--sleeping if I can sleep
through the music, or studying in the library--that would eliminate the
problem. There are things he could do--not play the music, or use
headphones--that would eliminate the problem. Ideally, we want legal
rules that result in whichever of us can eliminate the problem at lower
cost doing so--or each of us adjusting somewhat if that's the lowest
cost solution. Having him pay me damages eliminates my incentive to do
my part of that.
> > The problem could be avoided by either his changing his behavior
> > or my changing mine. Hence it is more accurately described as a
> > problem jointly caused by both of us.
> But if he suspects you might be willing to pay him to be quiet, that
> might be the whole reason he's making noise -- he's hoping you'll pay
> him to stop.
Could be--but that wasn't the point I was discussing.
Michael Stemper
>In article <ac35942a-69e6-435f...@b15g2000yqd.googlegroups.com>, plausible prose man <George...@aol.com> wrote:
>> Still, the point stands, if the tax doesn't transfer money from the
>> externalitor to the externalitee, well, it's not all that pigouvian
>> anymore,
>Actually, you have this backwards. From the standpoint of controlling
>externalities, the last person you want the money to go to is the victim.
>
>The reason is that, as Coase pointed out, the division into tortfeasor
>and victim is in an important sense arbitrary. A dorm mate playing loud
>music late at night wouldn't impose an external cost on me if it weren't
>that I had left my studying to the last minute and decided to do it in
>the dorm instead of the library.
Why should you be forced to go to the library to study when you're
paying for the dorm room? Sounds like roomie's depriving you of the
use of your property. And, if roomie decides to play loud music all
afternoon and into the evening, it's no longer anything to do with
when you decided to start studying.
Of course, when I was in college, I played loud music *while* I was
studying. I couldn't concentrate otherwise. If I'd had a roommate
who needed silence for studying, that would have been a problem.
--
Michael F. Stemper
#include <Standard_Disclaimer>
Visualize whirled peas!
plausible prose man
> David Friedman <d...@daviddfriedman.nopsam.com> wrote:
> > A dorm mate playing loud music late at night wouldn't impose an
> > external cost on me if it weren't that I had left my studying to the
> > last minute and decided to do it in the dorm instead of the library.
>
> What if you were trying to sleep? I'd call being unable to sleep
> a cost.
>
> > The problem could be avoided by either his changing his behavior
> > or my changing mine. Hence it is more accurately described as a
> > problem jointly caused by both of us.
>
> But if he suspects you might be willing to pay him to be quiet, that
> might be the whole reason he's making noise -- he's hoping you'll pay
> him to stop.
Yeah, maybe, or maybe you'll find some way to extort him. Usually
when this subject comes up, the idea of someone opening one of those
factories you see in movies that seem to have no purpose but to belch
thick black gouts of smoke, exude a general miasma into the soil, etc.
in some community to extort anti-pollution rents from the populace,
but meanwhile in real life I read about how people move next door to a
pre-school and then complain about the noise the kids make on the
playground. The whole point is that the on-going situation cannot be
correctly analyzed as one party being very clearly in the wrong.
This is perhaps part of the "different moral universe" economists
inhabit, although it is interesting that, for people who say
everything devolves from secure property rights, well, where they butt
up against each other is a little vague. You might say, to an
economist, the old "your right to swing your fist ends at the tip of
my nose," is more an issue of "you got chocolate in my peanut butter,
you got peanut butter in my chocolate"
David Harmon
F. Lynch" <k...@KeithLynch.net> wrote,
>And would those of us who don't drive at all be paid the most?
As a transit rider, you are already paid the most.
David V. Loewe, Jr
wrote:
And received the largest subsidy...
--
"Taxes are not levied for the benefit of the taxed."
-Lazarus Long
Keith F. Lynch
> "Keith F. Lynch" <k...@KeithLynch.net> wrote,
>> And would those of us who don't drive at all be paid the most?
> As a transit rider, you are already paid the most.
What a fragrant load of steaming wrongness. Numerous people in the DC
area have been giving up on Metro and switching to driving, to *save*
money! Fares are up to nine dollars for a rush hour round trip on
Metrorail, even more if you transfer to or from a bus. Needless to
say, Metro riders aren't paid anything. We don't even get discounts
when there are massive delays. And fares are expected to increase
again soon.
Keith F. Lynch
> analyzed as one party being very clearly in the wrong.
> This is perhaps part of the "different moral universe" economists
> inhabit,
It may be one of the few issues on which I disagree with David
Friedman, unless I'm misunderstanding him. I see serious conflicts
mostly in terms of rights.
> although it is interesting that, for people who say everything
> devolves from secure property rights, well, where they butt up
> against each other is a little vague. You might say, to an
> economist, the old "your right to swing your fist ends at the tip
> of my nose," is more an issue of "you got chocolate in my peanut
> butter, you got peanut butter in my chocolate"
Noses and fists are a good example. I don't think I should pay anyone
for the privilege of not being punched in the nose.
Noise complaints are fuzzier. How much noise do my upstairs neighbors
have the right to make? Ideally, that would be decided and clearly
spelled out before either of us moved in. Since this is an apartment
complex, it's basically up to the landlord. Unfortunately, they don't
have consistent, clear, objective standards.
Doug Wickstr�m
<dd...@daviddfriedman.nopsam.com> wrote:
>In article <7f2ph5he38d0vm4h8...@4ax.com>,
> "David V. Loewe, Jr" <dave...@charter.net> wrote:
>
>> For example, Frank expostulates that heavier vehicles cause harm to
>> other vehicles in a crash. But heavier vehicles generally have better
>> crash ratings for drivers and passengers - and such things are also
>> good.
>
>Safety for the driver is a benefit the driver gets, hence one he takes
>account of in deciding how heavy a car to get. Risk to people he might
>run into, on the other hand, is an external cost. The idea of a
>Pigouvian tax is to impose external costs (and benefits) on the decision
>maker, to make it in his interest to make the decision that maximizes
>total benefit, including costs and benefits to other people.
>
>There are a lot of practical difficulties with the approach, since
>external costs and benefit are not always easy to measure--in practice,
>you can easily end up counting only external costs of things you don't
>like--at a high estimate--and ignoring external benefits, or the other
>way around. You then end up with a sophisticated sounding argument for
>taxing things you don't like and subsidizing things you do.
>
>But it does have an internal logic to it.
The easiest way to minimize the external costs of larger vehicles
to smaller ones is to require uniform bumper and lighting
heights, and actual fenders around wheels, instead of mud flaps.
It doesn't completely mitigate the problem, but it does help a
lot.
Oh, yeah. Require diesel exhausts to be above a minimum height
and to point _upward_.
--
Doug Wickstr�
Doug Wickstr�m
<k...@KeithLynch.net> wrote:
>David Harmon <b...@example.invalid> wrote:
>> "Keith F. Lynch" <k...@KeithLynch.net> wrote,
>>> And would those of us who don't drive at all be paid the most?
>
>> As a transit rider, you are already paid the most.
>
>What a fragrant load of steaming wrongness. Numerous people in the DC
>area have been giving up on Metro and switching to driving, to *save*
>money! Fares are up to nine dollars for a rush hour round trip on
>Metrorail, even more if you transfer to or from a bus. Needless to
>say, Metro riders aren't paid anything. We don't even get discounts
>when there are massive delays. And fares are expected to increase
>again soon.
_I_ pay taxes that subsidize your Metro, and I live more than a
thousand miles from it.
--
Doug Wickstr�
David Friedman
Doug Wickstr�m <nims...@comcast.net> wrote:
> The easiest way to minimize the external costs of larger vehicles
> to smaller ones is to require uniform bumper and lighting
> heights, and actual fenders around wheels, instead of mud flaps.
>
> It doesn't completely mitigate the problem, but it does help a
> lot.
>
> Oh, yeah. Require diesel exhausts to be above a minimum height
> and to point _upward_.
The problem is that such proposals are trying to control the
outcome--and it's unlikely that simple rules like this will consistently
give the right answer. The more elegant approach, and the one that
Pigouvian taxes try to implement, is to give the people making the
detailed decisions the right incentives, so that they will make the
correct choices, taking account of all costs and benefit.
David Loewe, Jr.
<k...@KeithLynch.net> wrote:
>David Harmon <b...@example.invalid> wrote:
>> "Keith F. Lynch" <k...@KeithLynch.net> wrote,
>>> And would those of us who don't drive at all be paid the most?
>
>> As a transit rider, you are already paid the most.
>
>What a fragrant load of steaming wrongness. Numerous people in the DC
>area have been giving up on Metro and switching to driving, to *save*
>money! Fares are up to nine dollars for a rush hour round trip on
>Metrorail, even more if you transfer to or from a bus. Needless to
>say, Metro riders aren't paid anything.
You are subsidized for approximately half the cost of providing service.
You have been shown the numbers more than once.
One of the things that sets people off about you is your denial of
evidence that has been presented to you.
>We don't even get discounts when there are massive delays. And fares
>are expected to increase again soon.
--
"The more I know, the less I understand
All the things I thought I figured out,
I have to learn again"
Don Henley, Mike Campbell & JD Souther
Seth
>For example, Frank expostulates that heavier vehicles cause harm to
>other vehicles in a crash. But heavier vehicles generally have better
>crash ratings for drivers and passengers - and such things are also
>good.
But they aren't externalities.
> Moreover, unless I *get into a crash* the heavier vehicle I could
>be driving is no more harmful to persons in other vehicles than clean
>air.
So the cost of the potential excess damage to other people should
included the probability that such damage happens. (That is, if a
heavier vehicle causes $1 million excess damage in an accident, and
has a 1% chance of such an accident, then the expected excess damage
to others is $10,000.)
Seth
Seth
David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
>In article <hmpai5td8lj8grlb8...@4ax.com>,
> Doug Wickstr�m <nims...@comcast.net> wrote:
>
>> The easiest way to minimize the external costs of larger vehicles
>> to smaller ones is to require uniform bumper and lighting
>> heights, and actual fenders around wheels, instead of mud flaps.
>>
>> It doesn't completely mitigate the problem, but it does help a
>> lot.
>>
>> Oh, yeah. Require diesel exhausts to be above a minimum height
>> and to point _upward_.
>
>The problem is that such proposals are trying to control the
>outcome--and it's unlikely that simple rules like this will consistently
>give the right answer. The more elegant approach, and the one that
>Pigouvian taxes try to implement, is to give the people making the
>detailed decisions the right incentives, so that they will make the
>correct choices, taking account of all costs and benefit.
So the tax on a vehicle should be based on its bumper height compared
with the bumper heights of all other vehicles? That sort of thing can
take a long time to converge (especially if there are two popular
choices).
Seth
Seth
plausible prose man <George...@aol.com> wrote:
> Sometimes, this doesn't work. Tyler Cowan describes how his son's
>school found parents were, surprisingly, happier to pay some nominal
>fee and pick their kids up later,
because the fee was too low. If the fee had been high enough that the
teachers (or other caretakers) were at least indifferent between
leaving on time and getting paid to watch the children later, the
parents might have felt otherwise. And if they still didn't, then the
teachers would get enough to keep them happy, so there's still no
problem.
> Still, the point stands, if the tax doesn't transfer money from the
>externalitor to the externalitee, well, it's not all that pigouvian
>anymore, and the article suggests all the revenue is going into the
>general fund for, you know, mostly the army and social security and
>interest on the national debt.
Which thereby lowers everybody's taxes.
> I have read someplace that "externality" isn't just someone,
>somewhere doesn't like something someone else does, but would actually
>be willing to pay that person money not to do something, or the other
>fellow is willing to pay money to do something, like pick up his kids
>fifteen minutes late from day care, but both cannot due to the absence
>of a market mechanism.
Or due to the fact that one of them has the ability to do something,
and the other can't stop him. (E.g. a big company polluting a stream,
with enough political clout that the few individuals who merely live
downstream and have pollution running through their back yards can't
do anything about it.)
>> For example, Frank expostulates that heavier vehicles cause harm to
>> other vehicles in a crash.
>
> Sure, okay. This is quickly going to sound like David's thing about a
>line of pike men that he likes to use to illustrate "market failure,"
>except I understand most crashes are single vehicle, so an individualy
>rational decision doesn't totally impose costs on other people.
You have to include the likelihood of the external damage in the
calculation of its cost.
>> �Moreover, unless I *get into a crash* the heavier vehicle I could
>> be driving is no more harmful to persons in other vehicles than clean
>> air.
>
> Huh, I don't know, there's the pollution, as well. Still, it would
>seem easy enough to figure out what's the average vehicle from the
>standpoint of safety or pollution or whatever other externalities you
>can identify, and then base some tax/subsidy on your choices deviation
>from the mean.
For pollution, it should be zero-based. Any pollution has external
costs, not just the excess over some average.
> Your registration could cost more or less, or maybe
>they'd even pay you, depending on whether you were driving a Brinks
>armored car, or a street legal go-cart.
Why should someone who rides a bicycle not get in on it? Can I get
that payment for each bicycle I own?
Seth
Seth
David Loewe, Jr. <dlo...@mindspring.com> wrote:
>On Sun, 13 Dec 2009 20:24:31 +0000 (UTC), "Keith F. Lynch"
><k...@KeithLynch.net> wrote:
>>What a fragrant load of steaming wrongness. Numerous people in the DC
>>area have been giving up on Metro and switching to driving, to *save*
>>money! Fares are up to nine dollars for a rush hour round trip on
>>Metrorail, even more if you transfer to or from a bus. Needless to
>>say, Metro riders aren't paid anything.
>
>You are subsidized for approximately half the cost of providing service.
>You have been shown the numbers more than once.
The issue seems quite simple: there are two different things being
discussed.
One is the *actual cost* of providing service.
The other is the *amount the government pays* to provide that service.
If the service could be provided (were it not for government
contractors, unions, overpaid employees, excess management layers,
etc.) for, say, 1/3 of the current cost, then it seems that users are
overcharged by 50%, and everybody pays to subsidize half of the amount
the government pays.
Seth
Seth
David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
>The general point is that the problem is jointly caused by my actions
>and his. There are some things I could be doing--sleeping if I can sleep
>through the music, or studying in the library--that would eliminate the
>problem. There are things he could do--not play the music, or use
>headphones--that would eliminate the problem. Ideally, we want legal
>rules that result in whichever of us can eliminate the problem at lower
>cost doing so--or each of us adjusting somewhat if that's the lowest
>cost solution. Having him pay me damages eliminates my incentive to do
>my part of that.
If the government-specified damages were $100, and you'd be willing to
study in the library for $50, then why shouldn't he offer you $55 to
study in the library? That sort of thing seems like the most
economically efficient solution.
Seth
Keith F. Lynch
Exactly. I've made that point several times. Subsidies to transit
are a benefit to overpaid transit employees, not to passengers.
Metro is once again complaining about how short on money it is, and
discussing what combination of increases in government subsidies,
increases in fares, and decreases in service will be necessary. What
about cuts in employee salaries? Nope -- they're all getting raises!
Even though they're all already paid very handsomely indeed, and with
excellent benefit packages.
Though I could argue that when buses are slowed by car congestion,
the car drivers should compensate the bus passengers for their wasted
time, and the bus company for the additional salary of the driver
stuck in traffic the the extra fuel the bus burned while idling in
said traffic.
My brother recently complained that it took him two hours to get home
from Tysons on the bus thanks to heavy car traffic. He could have
walked the whole way in one hour.
Ground has finally been broken to extend Metrorail to Tysons, which
should mitigate traffic delays, since Metrorail is completely
grade-separated. I could argue that this billion-dollar extension
should be paid for entirely by car drivers, since if not for car
congestion, buses could provide perfectly adequate service there.
David V. Loewe, Jr
>David Loewe, Jr. <dlo...@mindspring.com> wrote:
>>On Sun, 13 Dec 2009 20:24:31 +0000 (UTC), "Keith F. Lynch"
>><k...@KeithLynch.net> wrote:
>
>>>What a fragrant load of steaming wrongness. Numerous people in the DC
>>>area have been giving up on Metro and switching to driving, to *save*
>>>money! Fares are up to nine dollars for a rush hour round trip on
>>>Metrorail, even more if you transfer to or from a bus. Needless to
>>>say, Metro riders aren't paid anything.
>>
>>You are subsidized for approximately half the cost of providing service.
>>You have been shown the numbers more than once.
>
>The issue seems quite simple: there are two different things being
>discussed.
>
>One is the *actual cost* of providing service.
>
>The other is the *amount the government pays* to provide that service.
Neither you nor Keith have ever proven that there is some significant
difference between the two.
>If the service could be provided (were it not for government
>contractors, unions,
Are you against the right of workers to organize?
>overpaid employees, excess management layers,
>etc.) for, say, 1/3 of the current cost, then it seems that users are
>overcharged by 50%, and everybody pays to subsidize half of the amount
>the government pays.
If it could be done for half of what Keith pays now, why isn't someone
doing it?
--
"When you're old and grey you will remember what they said,
That two girls are too many, three's a crowd and four you're dead."
Raymond Douglas Davies
David Friedman
wrote:
A point made some years back by Ronald Coase. But there are some
problems:
1. Suppose the actual damage done to me by your action is $100 and the
government correctly measures it and imposes a $100 fine on you. Further
suppose that the value to you of the action is $150. Initially you
continue doing it and paying the fine (imagine that all the numbers are
annual figures). I am still suffering a $100/year injury, so I offer you
$60 to quit. Quitting saves you a $100 fine, gets you $60 from me, so
you agree--thus stopping an activity whose benefit was larger than its
cost.
2. Suppose instead of a fine we use something like tort damages--you owe
me $100/year payment. As it happens, there are things I could do to
eliminate the problem that cost me only $50/year. But since I'm fully
compensated, I have no incentive to do them.
That could be solved if you offer me $60/year to mitigate the damages,
provided that the elimination of the problem through my action is
observable to the court, so it stops making me pay you damages. Or I
offer you $60/year to agree not to sue me for the damages.
The general point, known as the Coase Theorem, is that if there are no
transaction costs and rights are well defined, the parties will always
bargain to an efficient outcome. But transaction costs may, in realistic
examples, be too large to permit that to work.
For a more detailed explanation, see:
http://www.daviddfriedman.com/Laws_Order_draft/laws_order_ch_4.htm
David Friedman
"David V. Loewe, Jr" <dave...@charter.net> wrote:
> >If the service could be provided (were it not for government
> >contractors, unions,
>
> Are you against the right of workers to organize?
Government employees have some special advantages in union/employer
bargaining, since they are sitting on both sides of the table--as
employees, and as an organized interest group lobbying the employer.
That's a reason to think that costs would be lower if the service were
provided privately instead of by government.
> >overpaid employees, excess management layers,
> >etc.) for, say, 1/3 of the current cost, then it seems that users are
> >overcharged by 50%, and everybody pays to subsidize half of the amount
> >the government pays.
>
> If it could be done for half of what Keith pays now, why isn't someone
> doing it?
One answer, depending on the particular service, is because the
government won't permit it. I'm thinking of the history of jitneys,
which provided serious competition to the (I think mostly private, but
politically powerful) trolly liens early in the 20th century, until they
were effectively legislated out of existence.
David Friedman
> >overpaid employees, excess management layers,
> >etc.) for, say, 1/3 of the current cost, then it seems that users are
> >overcharged by 50%, and everybody pays to subsidize half of the amount
> >the government pays.
>
> If it could be done for half of what Keith pays now, why isn't someone
> doing it?
(something I left out in previous post)
A second answer is that it's hard to compete against a heavily
subsidized government firm. In this particular case, I'm pretty sure the
costs being discussed are operating costs. Transit systems can also have
enormous fixed costs--which, in the D.C. case, were (I think) paid
entirely by the taxpayers. So even if a private firm could operate such
a system for enough less to outweigh the current subsidy, it doesn't
follow that it could do it for enough less to pay back the capital costs
of construction.
David Friedman
<ac35942a-69e6-435f...@b15g2000yqd.googlegroups.com>,
plausible prose man <George...@aol.com> wrote:
> Still, the point stands, if the tax doesn't transfer money from the
> externalitor to the externalitee, well, it's not all that pigouvian
> anymore
That's not the case. Both fines and damage payments are forms of
Pigouvian tax. The objective isn't to compensate anyone, it's to give
people an incentive to take those actions, and only those actions, whose
net benefits are larger than their net costs.
David Loewe, Jr.
<dd...@daviddfriedman.nopsam.com> wrote:
> "David V. Loewe, Jr" <dave...@charter.net> wrote:
>
>> >overpaid employees, excess management layers,
>> >etc.) for, say, 1/3 of the current cost, then it seems that users are
>> >overcharged by 50%, and everybody pays to subsidize half of the amount
>> >the government pays.
>>
>> If it could be done for half of what Keith pays now, why isn't someone
>> doing it?
>
>(something I left out in previous post)
>
>A second answer is that it's hard to compete against a heavily
>subsidized government firm. In this particular case, I'm pretty sure the
>costs being discussed are operating costs. Transit systems can also have
>enormous fixed costs--which, in the D.C. case, were (I think) paid
>entirely by the taxpayers. So even if a private firm could operate such
>a system for enough less to outweigh the current subsidy, it doesn't
>follow that it could do it for enough less to pay back the capital costs
>of construction.
*I* was always assuming that the capital costs were a major part of the
equation and *the* reason that a private company could not do it. Recall
the post I made a while back where I critiqued Keith's plan for a Mass
Transit system including a cost analysis of how much the extra busses to
provide the service levels he wanted would cost just for St. Louis on
just the then existing routes.
--
"I wish to have no connection with any ship that does not sail
fast; for I intend to go in harm's way."
- John Paul Jones
David Loewe, Jr.
<dd...@daviddfriedman.nopsam.com> wrote:
> "David V. Loewe, Jr" <dave...@charter.net> wrote:
>
>> >If the service could be provided (were it not for government
>> >contractors, unions,
>>
>> Are you against the right of workers to organize?
>
>Government employees have some special advantages in union/employer
>bargaining, since they are sitting on both sides of the table--as
>employees, and as an organized interest group lobbying the employer.
>That's a reason to think that costs would be lower if the service were
>provided privately instead of by government.
Two thirds lower?
That is what Seth is arguing.
And I'll state it again, none of you have ever proven that there is some
significant difference between the cost of providing the service and the
amount that transit agencies pay for the service.
>> >overpaid employees, excess management layers,
>> >etc.) for, say, 1/3 of the current cost, then it seems that users are
>> >overcharged by 50%, and everybody pays to subsidize half of the amount
>> >the government pays.
>>
>> If it could be done for half of what Keith pays now, why isn't someone
>> doing it?
>
>One answer, depending on the particular service, is because the
>government won't permit it. I'm thinking of the history of jitneys,
Jitneys are hardly bus or train scale Mass Transit. Subject them to the
same kinds of safety regulations that other services must labor under
and a lot of the advantages go away.
Compare apples to apples.
>which provided serious competition to the (I think mostly private, but
>politically powerful) trolly liens early in the 20th century, until they
>were effectively legislated out of existence.
--
"Reading Solzhenitsyn makes it difficult to take seriously the
people in this culture who insist that Dissent has been squelched.
Brother, you have no idea."
James Lileks
Keith F. Lynch
> So even if a private firm could operate such a system for enough
> less to outweigh the current subsidy, it doesn't follow that it
> could do it for enough less to pay back the capital costs of
> construction.
Plus, digging a whole new competing subway system would not only cost
tens of billions, but would require government permissions that aren't
likely to be forthcoming.
Buses, of course, can go no faster than the traffic they're stuck in.
Unless they have lanes or roads set aside for them. And permission
for those lanes or roads is equally unlikely to be forthcoming.
Of course if nearly everyone rode those buses, there would no longer
be heavy traffic congestion, so they could use the existing lanes, and
everyone would get where they were going faster, more safely, and less
expensively, and less fuel would be consumed, and less pollution would
be produced. But how do you get there from here? It's a chicken-and-
egg problem. A "tragedy of the commons." Congestion pricing might be
a solution.
David Friedman
"David Loewe, Jr." <dlo...@mindspring.com> wrote:
> >One answer, depending on the particular service, is because the
> >government won't permit it. I'm thinking of the history of jitneys,
>
> Jitneys are hardly bus or train scale Mass Transit. Subject them to the
> same kinds of safety regulations that other services must labor under
> and a lot of the advantages go away.
The individual jitney carries feweer people than a bus or train, but
during the brief period before they got eliminated there were a lot of
jitneys, carrying a lot of people.
An individual automobile is an inefficient form of transport when there
is only one person in it, but much more efficient when it is full.
William December Starr
David Friedman <dd...@daviddfriedman.nopsam.com> said:
> Government employees have some special advantages in
> union/employer bargaining, since they are sitting on both sides of
> the table--as employees, and as an organized interest group
> lobbying the employer. That's a reason to think that costs would
> be lower if the service were provided privately instead of by
> government.
If the private enterprises can also lobby the government, doesn't
the same problem apply?
I can see the argument that opening up the jobs to competitive
bidding amongst multiple would-be providers, rather than giving a
bloc of government employees the monopoly on them, would lower
prices, but if so those savings would arise from, well, the
competition, not the fact that the providers of labor couldn't and
wouldn't themselves comprise an organized interest group that would
lobby the government for laws that would favor them.
-- wds
David V. Loewe, Jr
<dd...@daviddfriedman.nopsam.com> wrote:
> "David Loewe, Jr." <dlo...@mindspring.com> wrote:
>
>> >One answer, depending on the particular service, is because the
>> >government won't permit it. I'm thinking of the history of jitneys,
>>
>> Jitneys are hardly bus or train scale Mass Transit. Subject them to the
>> same kinds of safety regulations that other services must labor under
>> and a lot of the advantages go away.
>
>The individual jitney carries feweer people than a bus or train, but
>during the brief period before they got eliminated there were a lot of
>jitneys, carrying a lot of people.
>
>An individual automobile is an inefficient form of transport when there
>is only one person in it, but much more efficient when it is full.
Sounds like they made them safe and called them taxicabs...
--
"It's raining soup and we haven't built any soup bowls."
Dr. Jerry Pournelle
David Friedman
"David V. Loewe, Jr" <dave...@charter.net> wrote:
Similar vehicle, different mode of operation.
David Friedman
wds...@panix.com (William December Starr) wrote:
> In article <ddfr-7CA3DF.1...@newsfarm.iad.highwinds-media.com>,
> David Friedman <dd...@daviddfriedman.nopsam.com> said:
>
> > Government employees have some special advantages in
> > union/employer bargaining, since they are sitting on both sides of
> > the table--as employees, and as an organized interest group
> > lobbying the employer. That's a reason to think that costs would
> > be lower if the service were provided privately instead of by
> > government.
>
> If the private enterprises can also lobby the government, doesn't
> the same problem apply?
I'm not sure I understand your point.
If private firms are contracting with government to supply services, the
same problem applies. But if private firms are bargaining with their
employees, it doesn't; the employees don't get to vote for directors of
the company. I was imagining the alternative to government transit as
private bus lines or the like.
...
Seth
><dd...@daviddfriedman.nopsam.com> wrote:
>> "David V. Loewe, Jr" <dave...@charter.net> wrote:
>>
>>> >If the service could be provided (were it not for government
>>> >contractors, unions,
>>> Are you against the right of workers to organize?
No, I'm against the government paying above-market with my tax money.
>>Government employees have some special advantages in union/employer
>>bargaining, since they are sitting on both sides of the table--as
>>employees, and as an organized interest group lobbying the employer.
>>That's a reason to think that costs would be lower if the service were
>>provided privately instead of by government.
>
>Two thirds lower?
>
>That is what Seth is arguing.
Could be. Have you ever seen government efficiency?
>And I'll state it again, none of you have ever proven that there is some
>significant difference between the cost of providing the service and the
>amount that transit agencies pay for the service.
Look at the cost of employees, and compare with private employers. In
NYC, subway token clerks (when they sold precisely one item, and it
cost $1 each) got paid more than twice as much as supermarket
cashiers, probably closer to three times the cost when benefits
(e.g. retirement on half-pay after 20 years, where "half-pay" included
all the overtime the employee could cram into the last years of
employment).
>>> >overpaid employees, excess management layers,
>>> >etc.) for, say, 1/3 of the current cost, then it seems that users are
>>> >overcharged by 50%, and everybody pays to subsidize half of the amount
>>> >the government pays.
>>>
>>> If it could be done for half of what Keith pays now, why isn't someone
>>> doing it?
>>
>>One answer, depending on the particular service, is because the
>>government won't permit it. I'm thinking of the history of jitneys,
>
>Jitneys are hardly bus or train scale Mass Transit.
One jitney? So what? All jitneys that would run in, say, New York
City if they were legal? You might be surprised. (In some areas,
they get more passengers than city buses even now.)
> Subject them to the same kinds of safety regulations that other
>services must labor under and a lot of the advantages go away.
I've never been on a city bus with seat belts.
Seth
Seth
David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
> Both fines and damage payments are forms of
>Pigouvian tax. The objective isn't to compensate anyone, it's to give
>people an incentive to take those actions, and only those actions, whose
>net benefits are larger than their net costs.
So if the fine is set at (minimum over Amelioration strategies) of
(cost of Amelioration) plus (cost of remaining damage), would that
produce the society-optimum result?
(Obviously, the cost of calculating that is assumed away.)
Seth
David Friedman
wrote:
> In article <ddfr-D4104A.1...@newsfarm.iad.highwinds-media.com>,
> David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
>
> > Both fines and damage payments are forms of
> >Pigouvian tax. The objective isn't to compensate anyone, it's to give
> >people an incentive to take those actions, and only those actions, whose
> >net benefits are larger than their net costs.
>
> So if the fine is set at (minimum over Amelioration strategies) of
> (cost of Amelioration) plus (cost of remaining damage), would that
> produce the society-optimum result?
Looks right.
> (Obviously, the cost of calculating that is assumed away.)
Yes.
If you have an all knowing court, solving these problems is
easy--announce that anyone who doesn't act in the socially optimal way
will be shot. Of course, it might be prudent to also tell people what
their socially optimal action is. That gives you the equivalent of a
centrally planned economy controlled by an omnipotent and omniscient
dictator.
On the other hand, if courts know nothing you have a problem creating a
workable system of legal rules. The interesting analysis is mostly
between those extremes.
William December Starr
David Friedman <dd...@daviddfriedman.nopsam.com> said:
> wds...@panix.com (William December Starr) wrote:
>> David Friedman <dd...@daviddfriedman.nopsam.com> said:
>>
>>> Government employees have some special advantages in
>>> union/employer bargaining, since they are sitting on both sides of
>>> the table--as employees, and as an organized interest group
>>> lobbying the employer. That's a reason to think that costs would
>>> be lower if the service were provided privately instead of by
>>> government.
>>
>> If the private enterprises can also lobby the government,
>> doesn't the same problem apply?
>
> I'm not sure I understand your point.
>
> If private firms are contracting with government to supply
> services, the same problem applies. But if private firms are
> bargaining with their employees, it doesn't; the employees don't
> get to vote for directors of the company. I was imagining the
> alternative to government transit as private bus lines or the
> like.
Ah. I was indeed thinking of firms that would be bidding for the
job of, say, driving the city's busses.
(Not that the operators of private bus lines wouldn't also try to
influence lawmaking in their favor, but that's a different matter.)
-- wds
Keith F. Lynch
> That gives you the equivalent of a centrally planned economy
> controlled by an omnipotent and omniscient dictator.
If we are ever ruled by an an omnipotent and omniscient dictator, I
hope it is also omnibenevolent. And that the same goes for all its
successors, if there are any.
I'd still prefer freedom, even if the net benefit was provably worse,
as presumably it would be in that implausible case. I'd rather do
what I want to do than what would give me the most happiness, even if
I knew for a fact exactly what actions would lead to the latter.
Keith F. Lynch
> I've never been on a city bus with seat belts.
It's not clear that seat belts would be useful on a bus.
Karl Johanson
news:hhbk90$hu5$3...@reader1.panix.com...
> David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
>> That gives you the equivalent of a centrally planned economy
>> controlled by an omnipotent and omniscient dictator.
>
> If we are ever ruled by an an omnipotent and omniscient dictator, I
> hope it is also omnibenevolent.
Jack Williamson, "The Humanoids."
>And that the same goes for all its successors, if there are any.
>
> I'd still prefer freedom, even if the net benefit was provably worse,
> as presumably it would be in that implausible case. I'd rather do
> what I want to do than what would give me the most happiness, even if
> I knew for a fact exactly what actions would lead to the latter.
Karl Johanson
Seth
Keith F. Lynch <k...@KeithLynch.net> wrote:
>Seth <se...@panix.com> wrote:
>> I've never been on a city bus with seat belts.
>
>It's not clear that seat belts would be useful on a bus.
I've been on buses that made sudden swerves and/or stops. There
weren't any injuries, but that was luck; there could easily have been.
Seth
Jette Goldie
City buses don't usually have seat belts, but inter-city coaches, tour
buses and rural school buses often do in the UK.
--
Jette Goldie
jette....@gmail.com
http://www.flickr.com/photos/wolfette/
http://www.jette.pwp.blueyonder.co.uk/
http://wolfette.livejournal.com/
("reply to" is spamblocked - use the email addy in sig)
David V. Loewe, Jr
<k...@KeithLynch.net> wrote:
>Seth <se...@panix.com> wrote:
>> David Loewe, Jr. <dlo...@mindspring.com> wrote:
>>> You are subsidized for approximately half the cost of providing
>>> service. You have been shown the numbers more than once.
>
>> The issue seems quite simple: there are two different things being
>> discussed.
>
>> One is the *actual cost* of providing service.
>
>> The other is the *amount the government pays* to provide that service.
>
>> If the service could be provided (were it not for government
>> contractors, unions, overpaid employees, excess management layers,
>> etc.) for, say, 1/3 of the current cost, then it seems that users
>> are overcharged by 50%, and everybody pays to subsidize half of the
>> amount the government pays.
>
>Exactly. I've made that point several times. Subsidies to transit
>are a benefit to overpaid transit employees, not to passengers.
You people need to remember that DC transit funding has one of the
highest ratios of fare revenue to total spending in the US.
For example, King County (read Seattle) Metro only gets 14% of revenue
from fares.
http://metro.kingcounty.gov/am/reports/2003/122003-performance.html
----------
How Transit Is Funded
Sales Tax: 61%
Fares: 14%
Capital Grants: 12%
Sound Transit: 5%
Interest Income: 2%
Other Operations Revenue: 2%
Miscellaneous: 4%
----------
Another point to make is that, if you have this massive transit system
and people *do* forego having their own cars and rely on transit and
shank's mare to get everywhere, what happens when the transit workers go
on strike? What happens to cost containment when striking transit
workers can bring the city to its knees?
--
"Nothing so conclusively proves a man's ability to lead others as
what he does from day to day to lead himself."
- Thomas Watson, Sr.
David Loewe, Jr.
>David V. Loewe, Jr <dave...@charter.net> wrote:
>
>>For example, Frank expostulates that heavier vehicles cause harm to
>>other vehicles in a crash. But heavier vehicles generally have better
>>crash ratings for drivers and passengers - and such things are also
>>good.
>
>But they aren't externalities.
So?
>>Moreover, unless I *get into a crash* the heavier vehicle I could
>>be driving is no more harmful to persons in other vehicles than clean
>>air.
>
>So the cost of the potential excess damage to other people should
>included the probability that such damage happens. (That is, if a
>heavier vehicle causes $1 million excess damage in an accident, and
>has a 1% chance of such an accident, then the expected excess damage
>to others is $10,000.)
No. It should be charged only *when* it happens.
--
"I came here to say that I do not recognize anyone's right to
one minute of my life. Nor to any part of my energy. Nor to
any achievement of mine. No matter who makes the claim, how
large their number or how great their need."
- Howard Roark
David V. Loewe, Jr
>David Loewe, Jr. <dlo...@mindspring.com> wrote:
>>On Sun, 13 Dec 2009 20:24:31 +0000 (UTC), "Keith F. Lynch"
>><k...@KeithLynch.net> wrote:
>
>>>What a fragrant load of steaming wrongness. Numerous people in the DC
>>>area have been giving up on Metro and switching to driving, to *save*
>>>money! Fares are up to nine dollars for a rush hour round trip on
>>>Metrorail, even more if you transfer to or from a bus. Needless to
>>>say, Metro riders aren't paid anything.
>>
>>You are subsidized for approximately half the cost of providing service.
>>You have been shown the numbers more than once.
>
>The issue seems quite simple: there are two different things being
>discussed.
>
>One is the *actual cost* of providing service.
>
>The other is the *amount the government pays* to provide that service.
>
>If the service could be provided (were it not for government
>contractors, unions, overpaid employees,
A little investigation on line reveals that the WMATA workers are
perhaps not so overpaid as Keith would have people believe.
2004 average pay for a WMATA employee was $52,092. This is less than
the average pay for a DC Government worker (%52,917) that same year. I
understand that this is not quite an apples to apples comparison, but it
is also far less than the current median household income for the
Washington Metro Area ($72,800) or for Washington DC ($54,812 - 2007)
itself.
>excess management layers, etc.) for, say, 1/3 of the current cost,
>then it seems that users are overcharged by 50%, and everybody pays
>to subsidize half of the amount the government pays.
I'm still wondering where you are going to find the requisite number of
qualified (Class B CDL w/ Passenger endorsement) bus drivers and
bus/train mechanics to replace the "overpaid" ones already employed by
WMATA.
--
"Population will inevitably and completely outstrip whatever small
increases in food supplies we make, ... The death rate will increase
until at least 100-200 million people per year will be starving to
death during the next ten years."
Paul Ehrlich in April 1970
Seth
Keith F. Lynch <k...@KeithLynch.net> wrote:
>Exactly. I've made that point several times. Subsidies to transit
>are a benefit to overpaid transit employees, not to passengers.
I've heard that government employees get free passes.
When my employer buys me a bus pass, the transit system considers the
cost of that pass to be passenger revenue.
How is the cost-equivalent of government employees' rides counted?
Seth
Seth
David V. Loewe, Jr <dave...@charter.net> wrote:
>2004 average pay for a WMATA employee was $52,092. This is less than
>the average pay for a DC Government worker (%52,917) that same year. I
>understand that this is not quite an apples to apples comparison, but it
>is also far less than the current median household income for the
>Washington Metro Area ($72,800) or for Washington DC ($54,812 - 2007)
>itself.
What is the median number of employed people per household?
>I'm still wondering where you are going to find the requisite number of
>qualified (Class B CDL w/ Passenger endorsement) bus drivers and
>bus/train mechanics to replace the "overpaid" ones already employed by
>WMATA.
What percentage of WMATA's employees are of that type, and what
percentage are overpaid office workers and bureaucrats?
Seth
Seth
David Friedman <dd...@daviddfriedman.nopsam.com> wrote:
>In article <hh6a34$hv1$8...@reader1.panix.com>, se...@panix.com (Seth)
>wrote:
>A point made some years back by Ronald Coase. But there are some
>problems:
>
>1. Suppose the actual damage done to me by your action is $100 and the
>government correctly measures it and imposes a $100 fine on you. Further
>suppose that the value to you of the action is $150. Initially you
>continue doing it and paying the fine (imagine that all the numbers are
>annual figures). I am still suffering a $100/year injury, so I offer you
>$60 to quit. Quitting saves you a $100 fine, gets you $60 from me, so
>you agree--thus stopping an activity whose benefit was larger than its
>cost.
That's why the government keeping the money doesn't lead to the
optimal choices.
>2. Suppose instead of a fine we use something like tort damages--you owe
>me $100/year payment. As it happens, there are things I could do to
>eliminate the problem that cost me only $50/year. But since I'm fully
>compensated, I have no incentive to do them.
If you can eliminate the problems for $50, then the government should
make me pay you only that $50, because that's the minimum that makes
you whole.
>The general point, known as the Coase Theorem, is that if there are no
>transaction costs and rights are well defined, the parties will always
>bargain to an efficient outcome. But transaction costs may, in realistic
>examples, be too large to permit that to work.
You also need perfect information, don't you?
Seth
Seth
Keith F. Lynch <k...@KeithLynch.net> wrote:
>I'd still prefer freedom, even if the net benefit was provably worse,
>as presumably it would be in that implausible case. I'd rather do
>what I want to do than what would give me the most happiness, even if
>I knew for a fact exactly what actions would lead to the latter.
If you knew for a fact what actions would give you the most happiness,
you'd choose to do something else just to be perverse? But then
doesn't the perversity give you happiness, so . . .
Seth
Seth
>>David V. Loewe, Jr <dave...@charter.net> wrote:
>>
>>>For example, Frank expostulates that heavier vehicles cause harm to
>>>other vehicles in a crash. But heavier vehicles generally have better
>>>crash ratings for drivers and passengers - and such things are also
>>>good.
>>
>>But they aren't externalities.
>
>So?
"taxes activities that cause harm to *others*" [emphasis added].
>>>Moreover, unless I *get into a crash* the heavier vehicle I could
>>>be driving is no more harmful to persons in other vehicles than clean
>>>air.
>>
>>So the cost of the potential excess damage to other people should
>>included the probability that such damage happens. (That is, if a
>>heavier vehicle causes $1 million excess damage in an accident, and
>>has a 1% chance of such an accident, then the expected excess damage
>>to others is $10,000.)
>
>No. It should be charged only *when* it happens.
When I know that people hold incorrect beliefs, I prefer to encourage
them to base their actions on reality. Most people are much better
than average drivers (just ask them) and will never be the cause of a
major accident (again, just ask them). So taxing them _when_ they do
doesn't get the optimal decisions; taxing them based on the
probability, in advance, does better.
Seth
Kip Williams
Perfect knowledge would be nice in some cases. I've thought it would be
worth paying some money to have a psychic come over and tell me exactly
which books and other items I would never ever look at again so I could
trim the fat and lighten my life.
But not too perfect. I'd want them to stop before they got to, say, a
2012 calendar and said, "Oh, you won't need this."
Kip W
David Friedman
wrote:
> >>So the cost of the potential excess damage to other people should
> >>included the probability that such damage happens. (That is, if a
> >>heavier vehicle causes $1 million excess damage in an accident, and
> >>has a 1% chance of such an accident, then the expected excess damage
> >>to others is $10,000.)
> >
> >No. It should be charged only *when* it happens.
>
> When I know that people hold incorrect beliefs, I prefer to encourage
> them to base their actions on reality. Most people are much better
> than average drivers (just ask them) and will never be the cause of a
> major accident (again, just ask them). So taxing them _when_ they do
> doesn't get the optimal decisions; taxing them based on the
> probability, in advance, does better.
There are actually arguments for both alternatives.
To begin with, I'm not sure your factual claim above about beliefs is
true. People's beliefs about their own abilities are of course
imperfect, and may well be biased, but your argument depends not only on
the existence of such an error but on its being large.
Beyond that, even if people's beliefs about their driving ability are
imperfect and biased, it's still the case that not everybody is the
same, hence that your preferred alternative will overdeter good drivers
in cars in good condition, under deter bad drivers in cars with poor
brakes. You need to trade off the errors due to the obviously false
assumption that everyone is (in this respect) identical against those
due to individual misperception.
And that assumes that the people setting the charge actually do a
competent job of working out the average externality, which strikes me
as quite unlikely. Quite a while back Kip Viscuzi, in one of his books,
had a table showing the value of life figure implicit in various legal
rules. It varied, as I recall, over a couple of orders of magnitude. So
you also need to trade off the error and bias of the individual driver
against the error and bias of the rule maker setting the fixed charge.
On the other hand, one advantage of charging for the average cost rather
than for the rare actual cost is that the latter is much larger, hence
the actor is less likely to be able to actually pay the charge.
David Friedman
wrote:
> >2. Suppose instead of a fine we use something like tort damages--you owe
> >me $100/year payment. As it happens, there are things I could do to
> >eliminate the problem that cost me only $50/year. But since I'm fully
> >compensated, I have no incentive to do them.
>
> If you can eliminate the problems for $50, then the government should
> make me pay you only that $50, because that's the minimum that makes
> you whole.
But that requires the government to have more information--not only what
people did do and what happened, but what they could have done and what
its consequences were.
Incidentally, anyone sufficiently interested in these questions will
find them discussed at some length in my _Law's Order_.
http://www.daviddfriedman.com/Laws_Order_draft/laws_order_ToC.htm
David Loewe, Jr.
>David V. Loewe, Jr <dave...@charter.net> wrote:
>
>>2004 average pay for a WMATA employee was $52,092. This is less than
>>the average pay for a DC Government worker (%52,917) that same year. I
>>understand that this is not quite an apples to apples comparison, but it
>>is also far less than the current median household income for the
>>Washington Metro Area ($72,800) or for Washington DC ($54,812 - 2007)
>>itself.
>
>What is the median number of employed people per household?
First off, I noted that it wasn't an apples to apples comparison.
Secondly, I don't know. Why don't you look that up if you want to know.
>>I'm still wondering where you are going to find the requisite number of
>>qualified (Class B CDL w/ Passenger endorsement) bus drivers and
>>bus/train mechanics to replace the "overpaid" ones already employed by
>>WMATA.
>
>What percentage of WMATA's employees are of that type,
Looking at the numbers of busses and trains, I'm *guessing* there are
about 3000 bus drivers and between 400 and 600 train operators. I have
no good way to gauge the numbers of mechanics. The bus driver and train
operator figures alone that I'm guesstimating would be over a third of
the total number of WMATA employees.
>and what percentage are overpaid office workers and bureaucrats?
How do you define "overpaid"? I've already shown what the average WMATA
employee is paid and it is far less than the median household income for
the Washington Metro area.
--
"Leave your worries behind...
'Cause rain, shine don't mind
We're ridin' on the Groove Line tonight."
Rod Temperton
Keith F. Lynch
> Seth wrote:
>> Keith F. Lynch <k...@KeithLynch.net> wrote:
>>> I'd still prefer freedom, even if the net benefit was provably
>>> worse, as presumably it would be in that implausible case. I'd
>>> rather do what I want to do than what would give me the most
>>> happiness, even if I knew for a fact exactly what actions would
>>> lead to the latter.
>> If you knew for a fact what actions would give you the most
>> happiness, you'd choose to do something else just to be perverse?
>> But then doesn't the perversity give you happiness, so . . .
Not to be perverse, but to be free. And as mental exercise.
Suppose you had a magic hearing aid which would always whispher in
your ear exactly what to say and exactly what to do. You need never
think again. Sure, your brain would atrophy, but so what? You
wouldn't need it.
Would you want to live like that? I wouldn't.
> Perfect knowledge would be nice in some cases. I've thought it
> would be worth paying some money to have a psychic come over and
> tell me exactly which books and other items I would never ever look
> at again so I could trim the fat and lighten my life.
I would be rather disturbed to learn that I would never again look at
some favorite book. I'd prefer to think that I'm free to read any of
my books at any time.
ObSF: A Frankowski novel in which a time traveler notices that every
book in his new library seems to be personally autographed. He asks
if this is indeed the case. He's told, "No, only the books that you
will look at are autographed." I find that somewhat disturbing.
> But not too perfect. I'd want them to stop before they got to, say,
> a 2012 calendar and said, "Oh, you won't need this."
Indeed. But even if I were to learn that I will live for many
centuries, if every moment of those centuries is already predetermined,
what's the point in living them? I might as well be watching my life
as a movie.
And the same goes if it's not literally predetermined, but the actions
that will give me the maximum happiness are spelled out -- *if* I
follow those actions. So I wouldn't.
Of course in the real world there are no (accurate) psychics, oracles,
magic hearing aids, or omniscient benevolent governments, so it's moot.