Shorter, Better Summary of Natural Resource Taxation
posted by sleepy-sniper on July 16th, 2023 at 2:19AM
posted by sleepy-sniper on July 16th, 2023 at 2:19AM
I made a shorter, better summary (4 paragraphs instead of 5):
Markets are an excellent mechanism for organizing production and distribution, but they don't generate prices *ex nihilo*. Market prices are circular. The price of a product depends on three factors:
1. The prices of the inputs to its production.
2. The prices of competing products.
3. The supply and demand for the product, given the prices of other products.
So, prices depend on prices. Markets are a way to continuously optimize a collection of prices relative to one another, but this circularity must be bootstrapped for markets to work. In modern societies, prices are bootstrapped in an ad hoc way, using a combination of resource extraction fees, regulations, licenses, taxes, government fiat, etc. This causes market prices to depend on external conditions in ways that are random and unclear, without any design or plan.
The best way to bootstrap market prices is to appraise the physical inputs to the economy, natural resources, based on their utility, scarcity and downstream effects (such as pollution). Natural resource taxation should be applied at the point of use, extraction or degradation. All prices ultimately depend on the prices of natural resources, and the prices of natural resources are not entirely determined by the market.
Libertarians might complain that natural resource taxation would require price-setting by government bureaucrats, which is an opportunity for corruption. That is true, but prices have to be bootstrapped somehow. Markets aren’t magic. Implicit, ad hoc pricing creates more opportunities for corruption and evasion. If we don’t price natural resources, then markets are not bootstrapped, and we have a tragedy of the commons. Currently, we have a mixture of ad hoc pricing and no pricing.
Markets are an excellent mechanism for organizing production and distribution, but they don't generate prices *ex nihilo*. Market prices are circular. The price of a product depends on three factors:
1. The prices of the inputs to its production.
2. The prices of competing products.
3. The supply and demand for the product, given the prices of other products.
So, prices depend on prices. Markets are a way to continuously optimize a collection of prices relative to one another, but this circularity must be bootstrapped for markets to work. In modern societies, prices are bootstrapped in an ad hoc way, using a combination of resource extraction fees, regulations, licenses, taxes, government fiat, etc. This causes market prices to depend on external conditions in ways that are random and unclear, without any design or plan.
The best way to bootstrap market prices is to appraise the physical inputs to the economy, natural resources, based on their utility, scarcity and downstream effects (such as pollution). Natural resource taxation should be applied at the point of use, extraction or degradation. All prices ultimately depend on the prices of natural resources, and the prices of natural resources are not entirely determined by the market.
Libertarians might complain that natural resource taxation would require price-setting by government bureaucrats, which is an opportunity for corruption. That is true, but prices have to be bootstrapped somehow. Markets aren’t magic. Implicit, ad hoc pricing creates more opportunities for corruption and evasion. If we don’t price natural resources, then markets are not bootstrapped, and we have a tragedy of the commons. Currently, we have a mixture of ad hoc pricing and no pricing.
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posted by dennisn on July 16th, 2023 at 11:44AM
> Markets are an excellent mechanism for organizing production and distribution
So why don't you let them manage land and breeding, and other shit? > Natural resource taxation should be applied at [bla bla bla commie shit] Loool. So immediately after explaining basic "economics", you do a 180 and become a commie rent seeker :))). Dumbass. > the prices of natural resources are not entirely determined by the market. Tf does that even mean. King George isn't part of the market? ;) ;). Dumbass. King George ought to unilaterally determine prices? > prices have to be bootstrapped somehow Cringe. 1 Pizza cost TEN THOUSAND bitcoins in the early days. You're right, this wasn't magic. Where exactly does King George fit into the pricing of pizza? Dumbass. > a tragedy of the commons This commie phrasing of a commie problem, lol. "The commons" is a mostly commie concept, the inevitable fuckery that happens when property isn't properly owned. Commie dumbasses.
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