I was just walking my dog and there was this parked car that pulled out. As it did it’s motor was crazy loud and I along with my dog got a big whiff of exhaust.
The first thought that came to my mind was something like, “Ugh, what a negative externality. It’s so annoying that we can’t easily measure these sorts of things and fine people accordingly.”
But then I thought, “What if we could?”. What if, hypothetically, there was some sort of externality god that was able to look down on us, detect these sorts of events, and report them to the government.
Would that be a good thing? How should we use this information? I think we’d have to incorporate the fact that if people got taxed all the time for random little things, it’d have a sort of transaction cost that’d need to be taken into account.
Similar for payments for positive externalities. Knowing that at any second you could do something that produces a positive externality and get paid for it makes me think back to when I did freelance web development. Knowing that I could spend one hour making $50 or whatever made me feel guilty for sitting down and reading a book or something, so the opportunity to freelance imposes a cost onto me. Same with positive externalities, I think.
But beyond these transaction costs I’m not sure what other issues there’d be with paying/taxing people for positive/negative externalities.
I’m also not sure what society would look like. I’m not really imaginative enough to paint a picture here, but I’d love to hear from others who want to take a stab at it in the comments.
Some people would be practically taxed for existing.
We could leverage the externality god to figure out answers to difficult questions. Often the problem is to figure out what are the second-order effects of something, and here we would get an exact number.
Externality god
I was just walking my dog and there was this parked car that pulled out. As it did it’s motor was crazy loud and I along with my dog got a big whiff of exhaust.
The first thought that came to my mind was something like, “Ugh, what a negative externality. It’s so annoying that we can’t easily measure these sorts of things and fine people accordingly.”
But then I thought, “What if we could?”. What if, hypothetically, there was some sort of externality god that was able to look down on us, detect these sorts of events, and report them to the government.
Would that be a good thing? How should we use this information? I think we’d have to incorporate the fact that if people got taxed all the time for random little things, it’d have a sort of transaction cost that’d need to be taken into account.
Similar for payments for positive externalities. Knowing that at any second you could do something that produces a positive externality and get paid for it makes me think back to when I did freelance web development. Knowing that I could spend one hour making $50 or whatever made me feel guilty for sitting down and reading a book or something, so the opportunity to freelance imposes a cost onto me. Same with positive externalities, I think.
But beyond these transaction costs I’m not sure what other issues there’d be with paying/taxing people for positive/negative externalities.
I’m also not sure what society would look like. I’m not really imaginative enough to paint a picture here, but I’d love to hear from others who want to take a stab at it in the comments.
Some people would be practically taxed for existing.
We could leverage the externality god to figure out answers to difficult questions. Often the problem is to figure out what are the second-order effects of something, and here we would get an exact number.