Resource Allocation
From: John Marks (vze33mct@verizon.net)
Date: Fri 22 Nov 2002 - 21:29:14 EST
On 11/22/02 8:29 PM, "hugo_steincamp" <norgo@cybertrails.com> wrote:
> John:
>
> I agree with you on this issue. The environment is serious trouble -
> the biosphere as we know it is now is on the way out - and
> considering the depth of the crisis, we will soon no longer have the
> freedom to be wasteful of critical resources (and thus to be idiotic.
> The more intelligent we are now in what we choose to drive now will
> result in less government restrictions on motoring choice in the
> futre. But the solution to people choosing to drive SUVs that get 15
> mpg is not punitive government regulation: a combination of
> education, government supporting technological shift, and financial
> incentives is required move to a more environmental benign form of
> transportation. The size of government doesn't necessarily restrict
> freedom, but what a government (no matter its size) does and and does
> not do, does curtail freedom. I'm off topic of Peugeot, but the idea
> that the government supporting the shift to more intelligent modes of
> transportation will automatically reduce freedom is simplistic and
> requires a response.
>
> Hugo Steincamp
> '87 505 STX 24 mpg
Hi-
Please believe that I am trying to add light rather than heat here.
The two huge problems that complicate all these matters of resource
allocation are extremely difficult to come to terms with let alone solve,
but just to show that you need more than a bumper sticker...
The notion of the commons tragedy was first advanced in an 1833 publication
by William Forster Lloyd (1795-1852). Lloyd held the Drummond Chair at
Oxford in the 1830s. Lloyd's parable was one of the earliest and is
certainly the most elegant refutation of Smith's "invisible hand" theory, at
least when Smith's theory is applied to resources held in common. Lloyd's
parable was also one of the earliest clear statements of the notion of
marginal utility.
Lloyd demonstrated that when resources are ³free,² that is, held in common
or in public trust (such as grazing on the village green), the dynamic is to
value short-term individual gain over long-term so that the first
overgrazers get a short term marginal return much greater than their share
of the eventual communal loss. Even the most orthodox classical conservative
economists such as Hayek (no relation to the Mexican film actress that I
know of) recognized that certain social problems such as adulterated food
and medicine, pollution, and resource destruction required government
intervention.
But this leads directly to the second problem. United States tax policies
and government funding choices created huge distortions in the pre-existing
free market for transportation services. Los Angeles was before the second
world war a comparatively livable city with a comparatively enviable public
transit system. When Eisenhower decided to create a national highway system
as a matter of national defense preparedness (a great job of watching the
rear-view mirror), the government subsidies and incentives created huge
distortions. As has our foreign policy, which post-WWII has been mostly to
keep energy prices below real market and deny oil reserves to the Soviets.
Too bad nobody was paying attention to the ³unintended consequences.² Oh,
Hi, Osama. How¹s things?
Cheerio,
John
__________________________
John Marks
John Marks Records: http://www.jmrcds.com
Free newsletter on culture and the arts:
http://www.topica.com/lists/jmrcds
[Non-text portions of this message have been removed]
This archive was generated by hypermail 2.1.4 : Fri 22 Nov 2002 - 21:29:45 EST