It's In The Price Already

I liked this post from Arnold Kling at Econlog about whether people need to ‘behave more responsibly’ at the dinner table (e.g. eat less meat):

To argue that you need to “behave more responsibly” is to argue that there is something wrong with prices. If externalities are present (so that carbon-intensive consumption is under-priced, for example), then you need (a) a Pigouvian tax or (b) to be able to work through the input-output table. And I don’t trust even research specialists to do (b) accurately.

This strikes me as exactly right.

In our society many people to have their own list of behaviors that (they think) people – meaning you and I – ‘should’ do (or reduce/abstain from) in order to ‘be more responsible’ in one way or another. Whether it’s use less gasoline, recycle, eat less meat, whatever. And most such people are willing, if not eager, to use social policy and government fiat to force others to adjust our behavior to their liking.

Essentially none of the people who form such opinions have actually done the necessary calculations – worked through the input-output table, as Kling puts it – to be in a position to dictate what others ‘should’ do.

Whether I’m using ‘too much’ gasoline, whether I should recycle, whether I should ‘eat local’, whether I should take into account the ‘carbon footprint’ of this or that – if these are considered to be questions that are separate from the actual price signals that are already involved in these choices, none of the people with strongly-held views on these subjects have any real idea what they’re talking about. They just haven’t done the math – and most of them couldn’t if they tried.

Which doesn’t stop anyone from letting loose the little dictators inside them, of course.

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