Archive for the ‘scarcity’ Category

Bob Murphy acknowledges that implicit carbon pricing may reflect genuine economic scarcity

November 4th, 2008 4 comments

In June, I made a number of comments to Bob Murphy in response to his blog post entitled, Cap and Trade Is Not a “Market Solution”; Bob declined to respond at that time.

One of my comments was that Bob

(1) … unfairly conclude[s] that, since it will be government that will be implicitly pricing carbon emissions, such pricing “won’t reflect genuine economic scarcity” at all, when Austrian approaches do not deny that lack of property rights will result in economic actors ignoring external costs, but simply indicate the government pricing of resources can only imperfectly reflect economic factors;

Bob Murphy, in comments on his blog, has acknowledged his overstatement:

However, in context, my statements could easily be construed as saying that even in principle, the idea of carbon emissions having anything to do with scarcity was crazy. And that is too strong, so my op ed was misleading on this point.

It’s a minor point, but I appreciate Bob’s acknowledgment.