For the record, I'm going to ignore Ben's request that I call him my "consultant" instead of my personal economist, which went in part, "... it's not like there are any Depeche Mode songs about economists." Because now I'm hoping there might someday be a Depeche Mode song about economists.
Anywho, read his recent good post on externalities, which is more interesting than perhaps it sounds and starts something like this:
So the biggest problem with the neoclassical view espoused by so many conservatives is that it forgets about externalities. This is huge.
An externality is the effect you have on others that doesn't directly affect you. When you drive, every pedestrian has a little more trouble breathing. When you eat a hamburger, a cow had to be killed. When you wear a low-cut dress, the boys who pass you on the street feel a little bit better. [I swear, every econ class I've ever had used an example about cute girls.] That sort of thing.
From the economist side of things, there is no real solution to the externality problem, in the sense that it's supremely difficult to work out what the optimal behavior is, and how you should go about getting people to engage in that behavior. Basically, if an agent can do something that benefits it but causes a negative externality on others, then you're guaranteed that the agent will do too much (a suboptimal amount) of that activity.
Which is where government comes in. A good law curtails those activities which have negative externalities and thus makes the world a better place. Y'know: don't litter because it's easy for you but makes other people's lives worse; don't drive drunk because it's easy for you but makes other people's lives worse...
The post then goes on to discuss governmental oversight of optimal boobie display and the immeasurability of how kids are harmed by married gays. Speaking of, the Stranger's recent stunt was for Dan Savage and Amy Jenniges to go get a totally gay marriage license. According to BC, yr pal Kurt B. Reighley was supposed to play at the reception at the newly remodeled Timberline. He backed out, though, a few days before, citing their strange new ban on playing hip-hop music. Wha? Does anybody know more about this? Is that city related? And who decides what is hip hop? If a lot of young black males show up at an Accordion-Off, does polka become hip hop?
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