Pigou Club Pigou Club Homepage – an elite group of economists and pundits that promote the use of pigovian taxes

WWMS – What Would Milton Say?

One argument against Pigovian taxes was:

• More important, on “Milton Friedman Day,” is my skepticism, noted in the post above, of empowering the government to choose the bad behavior that warrants a tax.

Another Pigou Club member Mike Moffatt found this quote from Free to Choose:

• Private enterprises will bear all the cost only if they are required to pay for environmental damage. The way to do that is to impose effluent charges–not to have one government agency impose arbitrary standards and then set up another to cut through the first’s red tape.

It looks like Friedman was not a fan of CAFE and similar programs. He did seem to endorse Pigovian taxes in this case. In his book Capitalism and freedom Friedman writes about "neighborhood effects" as a justifiable reason for government intervention in free markets. He also mentions gas taxes as being relatively efficient. Friedman being Friedman also warns about the dangers of excessive intervention. Sadly, we cannot ask him what his opinion is, but I think he should not be considered an opponent of Pigou Club.