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

David Friedman on Storms

David Friedman (Milton’s son) recently wrote a post about reality and hype in environmentalism. He found this image which shows that higher sea levels won’t endanger Manhattan by much in the event of a hurricane.

That is good news, but IPCC report also says:

• It is more likely than not (>50%) that there has been some human contribution to the increases in hurricane intensity.
• It is likely (>66%) that we will see increases in hurricane intensity during the 21st century.

Perhaps even the blue areas on that image will someday be partly attributed to global warming. The jury is still out on that one.

PS: David Friedman writes about economics of the World of Warcraft on his blog. If you would like to know more about market forces in computer games it is well worth reading.

“I’ll use this stick to measure the sea level..”

Different taxes different cars

Average European and US cars are quite different. The difference is mostly a consequence of higher gas taxes in Europe. The Economist has a nice chart in this week’s edition.

A huge difference indeed.

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.