Tuesday, September 25, 2012

Cost and Price

I received a mailer from the Republican Central Committee informing me that Montana Senator John Tester's Cap-and Trade "climate change" Plan would cost families $1,761.00 a year and cause "millions of lost jobs due to higher costs of goods and more regulation." Climate change is in scare quotes because many Montanans are skeptical that it is real (or in any case,related to mans activities). As for any costs associated with it, if it's not real it doesn't cost anything! Problem solved. Also, regulations have costs, therefore no regulations means no costs. This is how the Market brings about a magic equilibrium through it's invisible hand and many Montanans remain in awe of this power. Such libertarian orthodoxy is on the rise in what I believe is a sub-conscious reaction to a growing public perception of climatic "limits to growth". They react to threat by hardening their position. More moderate forces on both sides have to pretend that democratic discourse can overcome this and that"electoral politics" is not just theatre but an actual incremental solution. Liberal economists, meanwhile, are in a tough position, warning against doomsday rhetoric while assuring us that regulation and market incentives can work in time. James Beard recommends building sea walls around low lying countries. But the fact is, "cost" and "price" are gradually being exposed as meaningless religious terms that reflect faith more than knowledge. Carbon pricing is as fanciful as happiness pricing. Economics professors keep assigning the same chapters to business majors but they too can sense their "science" crumbling along with the rest of the centuries "ideological rubble".

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