Wed, 08 Nov 2006

Pollution

Everyone is against pollution. That means "stuff where the property owner doesn't want it." So it could be litter, or air pollution, or water pollution, or groundwater pollution. Nobody wants somebody else to pollute their property. Nobody

The problem is that pollution is difficult to control. How do you stop a factory from polluting the air when they're doing it from their property, and you have no contractual relationship with them? The economic term for this is "externality," because the effects of the factory are external to itself and its customers. The standard answer is "Well, you just pass a law."

The problem with a government solution is that government itself is difficult to control. Voting is the ultimate externality. The majority inflicts its will on a minority.

Using government to solve pollution doesn't solve the problem; it just transforms it into a different problem. Perhaps the government solves the pollution problem, but then it creates other problems at the same time. If you could get it to not create those problems, it probably couldn't stop pollution either.

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