October 26, 2007
Grasshopper’s protest
With apologies for the delay (time waits for no blog, though it is going to have to make an exception in my case) here’s a response to Brad DeLong’s comments on a recent column of mine. My article argued that the debate over fuel-economy standards was not advancing the cause of climate-change mitigation, and it made the case (again) for a carbon tax. Brad’s take on this was:
Clive Crook says: - A stronger CAFE is better than what we have now - A full-fledged gas tax would be better than a stronger CAFE - There is little chance of a full-fledged gas tax - I’m against a stronger CAFE I think I am missing something.
Much as I admire Brad’s writings–what would we bloggers on political economy do without him?–I think this ruthless dissection of my logic leaves a little to be desired. “A stronger CAFE is better than what we have now.” I don’t say that. I say that a stronger CAFE would do only a little to curb carbon emissions (a non-zero benefit to be sure), and that its costs (also non-zero) are disguised. I don’t know what the balance is, and I don’t pronounce on that. “A full-fledged gas tax tax would be better than a stronger CAFE.” Yes, I do say that: much better, with benefits greatly outweighing costs. “There is little chance of a full-fledged gas tax.” I don’t say that and I don’t believe it either. The United States already has state and federal gas taxes, remember. When people call for a gas tax they are proposing not a completely new idea but increases in taxes that already exist. This seems within the realm of possibility. A comprehensive carbon tax–much the best way to go–is politically harder, but again surely not impossible. And it isn’t going to happen unless somebody makes the case. It won’t happen if everyone confines himself to advocating the line of least political resistance. “I’m against a stronger CAFE.” I don’t even say this, if you want to be precise (see point one, above.) I say that it’s an inferior policy, an excuse for inaction where it counts, and that the United States should opt instead for the plainly superior policy. Obviously my view might be wrong, but I fail to see where the logic breaks down. Brad reckons I’m redeemable, I think–the grasshopper may one day achieve enlightenment–and a man of my advancing years appreciates that. He thinks I’m a liberal pretending to be a conservative: I should just declare my allegiance, come on board, and acknowledge my scepticism on CAFE as a kind of denial. In other circles I’m suspected of being a conservative pretending to be a liberal. Political and intellectual tribes, necessary as they are, have never appealed to me. Trust me, you can decline membership without abandoning intellectual coherence.
You actually believe that there is a good chance of having a “full-fledged” gas tax? In America?
If so, I think I’m done w/ your blog. To get a real reduction in gasoline consumption, you need a hefty increase in gas taxes, which = pissed off voters. Yes, five cents a gallon might be a politically feasible start (if combined w/ tax cuts elsewhere…), and then could be increased in the future, but five cents a gallon won’t budge consumption.
You seem to favor “doing nothing” b/c it at least is cheap. Except, the costs of doing nothing are hidden — that’s what is particularly onerous about it. (So invisible, in fact, that you don’t even realize that they are there…) When I consume gasoline, there are externalities (environmental & foreign policy related) that I don’t pay for. When I buy a car, I care more about how it looks and rides and whether it’s going to get me any girls than I care to calculate the discounted present value of all future gasoline purchases. Nobody does that. Hence, people tend to buy cars w/ worse gas mileage than they should were everyone an actuary. (Most undergrads can’t even calculate Present Value in simple situations, much less w/ something as complex as expected future value of gasoline consumption…)
Posted by: Thorstein Veblen | November 1st, 2007 at 12:16 am | Report this comment