The texas legislature is back in session and you know what that means. District lines being redrawn? Babies kissed? Steak dinners? No? Well at least there are some interesting laws being passed and proposed. Check this one out. Lets hear some opinions.
Archive for the ‘Efficiency’ Category
So I was thinking about Steven Landsburg’s argument (from Chapter 7 of the Armchair Economist) that Burning a dollar bill decreases the price level and helps everyone who holds money except the one who’s bill was burned. I’m not sure I agree.
A) I first wanted to claim that when the value of all other non-burned dollars become more valuable the relative usable value to dollar holders doesn’t increase as much as the $1 decrease the burner experienced. Allow me to explain. There are plenty of dollars that still have value but that no-one holds. These are the “lost” dollars of the world. Waiting to be found, similar to the dollar that Landsburg says “would be as good as burned” if he let it blow away. In all reality it isn’t burned. It still holds $1 worth of value to the lucky soul who finds it. If you imagine that scattered throughout this orb we inhabit there are thousands if not millions of dollars “lost” to potential dollar holders. Every-time a dollar is burned, the relative value of these dollars all increase, and the relative value of usable held dollars in the world has decreased. Thus the value to SOCIETY has actually decreased not remained the same.
B) Second why would everyone else’s value increase really? To the world this dollar has just been saved byLandsburg, to be spent another day. The world expects it to still have value, the same as the world has expectations of a probable expected future use for all the “lost” bills I mentioned in part A). Thus the price level will not decrease to the extent Landsburg claims. Thus the world is “worse” off by the burning of a dollar. Unless of course it is broadcast to the world so that everyone would know that it had really been destroyed. But in that case we have to think if the opportunity cost of broadcasting to the world the burning of a dollar bill outweighs the value to the world of watching.
We can all agree that global warming exists, however, there is limited proof that it is caused by human beings. Of the approximate 200 billion metric tons of greenhouse gases emitted last year, man was responsible for emitting an approximate 7 billion metric tons. Be that as it may, we still must decide whether it is cost efficient to do anything to attempt to combat the rising temperatures. I am speculating, but I would imagine that the cost associated with reducing that 7 billion metric tons will be incredibly high and will have a negligible impact on global warming, if any at all.
We cannot stop nature and, therefore, must embrace what it has to offer. As Tyler points out, there are many benefits that could be realized by global warming and we must find a way to realize them and harness their potential. One of these benefits would be the potential increase in the production of food. With an increase in the production of food, much of the world’s starved population could be fed by the surplus. Although much of the world’s starvation problems are political in nature, the excess would exist for those that could penetrate the political force fields.
So, if we wish to proliferate world hunger then I suggest we do everything in our power to spend all the necessary resources to reduce our emissions. Otherwise, we can follow the Tao, flow in accordance with the way of nature, and realize all the benefits from that which we cannot stop.