April 23, 2007
MAKING THE PIGS PAY TO USE THE TROUGH:
Bloomberg and Pigou (New York Sun Staff Editorial, April 23, 2007, NY Sun)
A bit of a debate is erupting on the World Wide Web in respect of whether the fee that Mayor Bloomberg plans to charge for driving into Manhattan is a Pigovian tax. This is a reference to the ideas of a British economist named Arthur Cecil Pigou. The mayor reckons that congestion pricing, which involves making drivers pay a fee to enter parts of Manhattan during certain hours, will keep down traffic in the city, speed the flow of cars and delivery vehicles, and, on a net basis, give a boost to commerce.This is in line with the ideas of Pigou, who reckoned that it was a beneficial thing for governments to use the taxing power to affect behavior. Pigou would have understood what the mayor was talking about when he said, "Using economics to influence public behavior is something this country is built on — it's called capitalism." The mayor was quoted to that effect in the Web log of a Harvard professor of economics named Gregory Mankiw, who is a former chairman of the Council of Economic Advisers and who offers what he calls "random observations for students of economics." [...]
"When people are not charged (or are undercharged) for using a common resource such [as] a congested road, then incremental use of the resource entails a negative externality on other users. Imposing a user fee for the scarce resource can be described as a Pigovian tax to deal with this externality. Similarly, a conventional Pigovian tax such as a tax on pollution emissions can be described as a user fee for consuming clean air."
Mr. Mankiw maintains what he's calling the Pigou Club, which is basically a group of economists and pundits with what Mr. Mankiw calls "the good sense to have publicly advocated higher Pigovian taxes, such as gasoline taxes and carbon taxes." His list includes not only himself and Martin Feldstein but columnists Paul Krugman, Gregg Easterbrook, John Tierney, Jonathan Rauch, and Thomas Friedman, along with Vice President Gore. Secretary of State Shultz and Chairman Greenspan are also in the Pigou Club.
The neocon moment may be over, but the neoconomists are just getting warmed up. Posted by Orrin Judd at April 23, 2007 7:55 AM
I wonder what Neoconomics would think about Al Gore's beloved "carbon offsets" idea, which is the modern day equivalent of the medieval Catholic Church's granting of indulgences that buy your way to forgiveness.
Posted by: Brad S at April 23, 2007 8:14 AMThere is certainly nothing new in the notion that the power to tax is the power to coerce and destroy.
Posted by: Lou Gots at April 23, 2007 9:09 AMSo how do "Pigovian taxes" differ from good old-fashioned"sin taxes", other than this time it's Leftwing Gaian Fundamentalists who are defining the "sins"?
Why hasn't Mayor RedKen Livingston's name been mentioned? Hasn't he already implemented tolls for drivers entering London?
Posted by: ed at April 23, 2007 12:48 PMBloomberg's limo get stuck? Eliminate the riff raff, quicker passages for our betters.
Posted by: Bob at April 23, 2007 2:14 PMoffsets are conservative dogma.
Posted by: oj at April 23, 2007 2:33 PMAs a formerly broke youngster who started out in New York, an additional tax on travel would have been all I needed. Taxes like this never cease to amuse since they only affect the marginal guy with the least ability to pay. Just another hurdle put up for the little guy to jump.
Posted by: at April 23, 2007 4:14 PMThe nameless, faceless one has hit upon it. Just as the limousine liberals (and limousine conservatives, such as W.F. Buckley) may look down the noses at the Right to Keep and Bear Arms from their gated mansions defended by hired guards, so they may wish to bar the commoners from the highways.
Posted by: Lou Gots at April 23, 2007 5:22 PMAre the poor barred from your gun club if they don't want to pay dues or purchase a firearm? Or are they just making an economic decision about what's important to them?
Posted by: oj at April 23, 2007 7:44 PMThe real poor take the bus or walk.
Posted by: oj at April 23, 2007 7:48 PMSo, Manhattan's a club? Some independant, young, up and coming, start up business types need to drive into the city from time to time. Money's not coming in quite yet. You don't want them in your club? You are an ass.
Posted by: at April 23, 2007 8:54 PMNo, Manhattan is a community. If you want to ruin their community they may charge you. If you were up and coming you'd take the train.
You have though nicely illustrated the surpassing sense of self-pity and entitlement that makes such steps necessary.
Posted by: oj at April 23, 2007 10:15 PM