Friday, July 04, 2008

Be Cool, Don't Pigou

The libertarian argument of why you shouldn't join the Pigou Club (ie. using taxes to correct negative externalities) from Brian Caplan (h/t Adam Smith Institute Blog):

My view is that people have a right to create all sorts of negative externalities, and other people basically just have to live with them. Unhappy campers have a right to complain about the externalities, refuse to associate with those who create them, or buy a large bloc of land and require visitors to abide by their rules. But they have no right to pass laws to do anything about most externalities. For example, even though I think education has important negative externalities, I don't want to do anything more than eliminate government subsidies for education.

This does not mean, of course, that all negative externalities should be legal. Murder creates externalities, and I'm firmly against its legalization. But the right place to draw the line, in my view, is at physical trespass.

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