Spotted in this article, referring to an old school of thought:
... economist J.E. Meade argued that honeybee pollination was an "unpaid factor" in apple farming, since orchard owners and beekeepers did not coordinate their production decisions. Both produce what economists call "positive externalities," or spillover benefits for the other, causing inefficiencies. Since "the apple-farmer cannot charge the beekeeper for the bee's food, which the former produces for the latter," Meade believed that certain "subsidies and taxes must be imposed."
Wait, what?????
In a particular sort of transaction, all parties benefit in ways that the others aren't observably paying for. This is a win all around, no? Everything's fine, and we shouldn't mess with it?
So what, exactly, was the logic behind Meade's insistence on having the government butt in?
Seems like this would also call for, e.g., taxing open-source software, or perhaps its use. Or imposing economic-justice regulations on garbage-to-energy operations, if the company extracting energy from garbage is selfishly not paying people for the garbage it uses.
Seriously, what possible rationale can there be for taxing positive externalities?
Comments