Monday, November 17, 2008
The High Cost of "Green Recovery"
This piece ran in Forbes.com over the weekend. Again, it is pretty low-brow stuff for those readers who wish I would spend more time on Bohm-Bawerk's critique of Marx's law of surplus value. But hey, part of the function of this blog is for me to keep track of all my publications. It's not you, it's me.
Comments:
Speaking of Bohm-Bawerk, I did skim "The Positive Theory of Capital".
Definitions of capital:
"Capital in general we will call a group of Products which serve as means to the Acquisition of Goods."
"…a group of products destined to serve towards further production"
Book 1, p.38
He lists 11 other definitions as well, of which I think Jevons is the closest (p.32)
I would define capital as "wealth engaged in production". The wages of silver would merely be wealth until it is engaged, by contract, for production.
This may be semantics, but this helped me understand the "flight to real" more easily. Credit easing encourages (by time preference) consumption and wealth hoarding at the expense of capital. When the inflation party is over the asset bubble bursts as the wealth flows from the "real" to a neglected engagement as capital.
Does this make sense?
Definitions of capital:
"Capital in general we will call a group of Products which serve as means to the Acquisition of Goods."
"…a group of products destined to serve towards further production"
Book 1, p.38
He lists 11 other definitions as well, of which I think Jevons is the closest (p.32)
I would define capital as "wealth engaged in production". The wages of silver would merely be wealth until it is engaged, by contract, for production.
This may be semantics, but this helped me understand the "flight to real" more easily. Credit easing encourages (by time preference) consumption and wealth hoarding at the expense of capital. When the inflation party is over the asset bubble bursts as the wealth flows from the "real" to a neglected engagement as capital.
Does this make sense?
I think that sounds OK. But you count capital goods as part of wealth, right? I.e. even when the silver turns back into capital goods (if he decides to melt it and make silver toy soldiers) it is still wealth, right?
Congratulations, Bob, on getting into Forbes, but I must confess that it is a bit of a puzzle that even when you get the bully pulpit you decline to talk about what kinds of actions make sense as energy policy - such as how to improve the energy grid (a centralized push for local utility deregulation, so utilities might have some interest?), how to achieve political consensus on greater exploration (such as royalty checks to citizens), allowing faster depreciation, etc.
It also disappoints that you insist on engaging on climate change issues only from a heavy-handed government redistribution standpoint, while ignoring not only lack of property rights, many parties with differing views of equity, and tragedy of the commons aspects, but also ignoring the obvious superiority of carbon taxes (assuming legislators are going to choose between cap and trade and carbon taxes), which present few opportunities for rent-seeking and can be rebated to reduce the regressive effcts.
In short,
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It also disappoints that you insist on engaging on climate change issues only from a heavy-handed government redistribution standpoint, while ignoring not only lack of property rights, many parties with differing views of equity, and tragedy of the commons aspects, but also ignoring the obvious superiority of carbon taxes (assuming legislators are going to choose between cap and trade and carbon taxes), which present few opportunities for rent-seeking and can be rebated to reduce the regressive effcts.
In short,
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