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The new economics!

The answer is straightforward. We need to redefine productivity so that it equates to using the lowest material input possible in a process. And we need to incentivise this by, firstly, accounting for the costs of planetary destruction and, secondly, imposing environmental taxes to actually reflect that cost on those companies that cannot or will not adapt to the world we live in.

So, total factor productivity with Pigou Taxes on externalities. If only someone could have thought this up before the ‘Tater brought it to our attention!

17 thoughts on “The new economics!”

  1. That’s the theory sorted. There are now just the practicalities to deal with to get the world on an even keel again.

    you have to wonder what kind of person could write that sentence in a sense that is non-satirical…

  2. His earlier ‘bashing the metal bashers’ post was even better:

    Can we afford this? Of course we can. We know most manufactured items are of such little value that we throw them away sooner or later, with sooner becoming ever more commonplace. In contrast, health, education, the arts, entertainment and so on are what are really valuable.

    Guess those ‘shovel ready’ projects will need cancelling. Additionally let’s hope those involved in such activities can manufacture all their own equipment, build their own classrooms and so on…

    It can never be over-emphasized how much of a cretin he is.

  3. The Meissen Bison

    …we need to incentivise this by, firstly, accounting for the costs of planetary destruction

    Douglas Adams never thought of that!

  4. Who’s this ‘we’ he keeps referring to? It certainly doesn’t include me; I wouldn’t want to be associated with anything that prick dreams up.

  5. The externalities are unquantifiable given that we don’t know to what extent they even exist or even what sign they have.

    We can say, with almost absolute certainty, that the few pin pricks we make in the earth’s surface are not destroying the planet so that is not something we have to cost.

    What price to we put on eliminating extreme poverty, raising life expectancy, and eradicating energy poverty?

  6. News just in.

    Ely Cathedral, the previous largest man-made structure in Ely, Cambs, has now been overtaken by the ever- expanding ego of Richard Murphy.

  7. This prompted a dim lightbulb in my head and upon looking it up, it was indeed Boehm Bawerk’s theory of production and productivity that he is refuting.

    Some feat. Kudos.

  8. John77

    Well it’s back to Douglas Adams innit ?
    Make a mountain “disapper” by building a new moon.

  9. @ Ottokring
    IIRC that lost him the bet (and his life) and DA pointed out that he should have turned it into a SEP

  10. But this is exactly why Pigou taxes are an appalling bad idea in practice. No one will ever agree on the ‘right’ amount to charge – cue greenies wailing about buying the right to pollute if it’s not enough, by which they will mean not enough to make any project unviable – and they will always ratchet upwards. Great idea in theory, terrible in the real world.

  11. @Ltw

    There is an old military saying that “no plan survives contact with the enemy”. We might equally say that no economic plan survives contact with politics, because political priorities always take precedence over economic ones.

  12. secondly, imposing environmental taxes to actually reflect that cost on those companies that cannot or will not adapt to the world we live in do what I want them to do. TFTFY

  13. “We need to redefine productivity so that it equates to using the lowest material input possible in a process.”

    Isn’t that a peasant non-industrial economy, where everyone works in the fields in a subsistence existence?

  14. I was thinking of the Abos, Jim.

    They’d wander through the bush with the blokes bashing an occasional kangaroo on the head while the birds searched for edible veggies or witchetty grubs to put in their dilly bags.

  15. “We need to redefine productivity so that it equates to using the lowest material input possible in a process.”

    A million Chinese moving dirt using baskets to build a dam is therefore extremely productive, while a thousand Westerners using backhoes and dump trucks to move the same dirt is much less so.

    The circus never ends.

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