Oh but i do

Since I feel pretty similiarly to Sam and wanted to touch on the environmental stuff from the book, I thought I'd build off what he's said.

First off, general impressions about the book: I think Blinder would be useful to thrust into the arms of those who are less knowledgeable about economic topics. His writing style is very accessible and one doesn’t get the feeling that he is making presumptuous self-righteous editorializing. This may explain why Sam wanted to have the chapter to hand to loopy environmentalists. I also found the discussion on monetarism, rational expectations and supply side economics , while possibly overly dismissive, a good history lesson. Nevertheless, I have to agree with Sam that this may have been a little too simplistic for us at this point. More rigorous economics or more radical departures from thought we’ve been reading might be interesting to dive into at this point. Oh well.

About the environmental section: I thought Blinder did an excellent job of characterizing environmentalism and how to best solve environmental issues. I’m happy to say that most respected environmentalists that I know of have moved towards his solutions. For me as a philosopher, the dismissal of rights does become slightly problematic. If one doesn’t look at inherent rights and value, arguments for making decisions outside the market for the benefit of non-human entities becomes difficult. Dealing with questions of pollution as questions of “more or less” rather than “yes or no” does create problems with my sympathies with deep ecology as a philosopher. Nevertheless, when I don my cap as an economist, I recognize that I am evaluated transactions between humans and would gladly work to increase the efficiency of this system.

It is here that I think Blinder and the economists of his time made large contributions. His discussion of sulfur dioxide regulation was incredibly interesting because it was the terrible inefficiencies of sulfur regulation which led to the huge successes of sulfur pollution control as a large scale test of cap and trade policy. In fact, that success seems to have convinced most environmentalists that I have studied under that there is a great deal to be said for market based pollution control. Even in working for Greenpeace in Vienna, I noticed that many in the office were eager to use the markets for environmentally beneficial purposes.

There are some problems with market solutions, however, that I think Blinder misses and policy makers should be aware of. Most significantly I was troubled by the lack of discussion of environmental justice. As Blinder knows, markets may create the most efficient systems but they in no means guarantee proper distribution. Cap and trade systems have been feared by environmental advocates, especially those working as social advocates in low income areas, due to the fear of pollution bubbles. If air rights are less valued in a low income area than in Malibu (where wealthy individuals could buy up air rights to protect their own views/property) what would prevent toxic industries from targeting poor areas. This is especially problematic because the poor most impacted by such a shift are least likely to be able to provide proper health and legal routes to protect their well-being. In order to protect from such situations, one would need to move to a system with at least some straight-forward regulation.

Another point I would like to make is specific to environmentalist support/dissent on market systems of the Bush administration. Many people attack environmentalists for their opposition to these “efficient” solutions. However, if one looks carefully, the biggest complaints are usually that any shifts the current administration makes towards market regulation also includes increases in the absolute amount of pollution allowed under regulatory schemes. Total permits may allow more tons of a toxic than current regulation allows of the industry. I think many environmentalists would jump at the chance to create a true polluter pays system where every permit is sold and there are no “free” permits or tax exemptions. As blinder notes, however, this would not be acceptable to the industry.