I still can't wrap my head around the purpose of this proposed taxation...
The alleged negative externality in question is that by using antibiotics, bacteria acquire a resistance, and antibiotics become less effective in general...
The proposed solution is to tax antibiotics, thereby taking them out of the hands of people who need them, thereby reducing the effectiveness of antibiotics far more quickly and completely than the alleged negative externality would have done. If you don't have antibiotics in your possession, I can guarantee that they will not work for you.
What's more, the idea that the elites who control government will do this fairly and equitably, and that they won't secure and horde antibiotics for themselves and their entourage is just comically naive, but I guess you can't expect much common sense or, indeed, morality from the average economist. They think government aggression solves everything. Usually because they're part of the aforementioned government entourage.
Coase:It's an issue of optimal resource allocation.
What's your criterion or criteria for optimality of resource allocation?
The keyboard is mightier than the gun.
Non parit potestas ipsius auctoritatem.
Voluntaryism Forum
His criterion is the same criterion all pseudo-economists who make value judgments use:
"The appartments of workers are 'too small.' The houses of capitalists are 'too large.' This is not 'optimal.' " (Ludwig Pohle 1911).
He never actually uses mathematical definition of "optimality," because (Pareto) optimality doesn't care how resources are intitially distributed and how this makes the final distribution.
To optimize something Pareto style, i.e., mathematically, one must minimize costs while maximizing results. Thus, changing who pays without changing quantity of either costs to pay or quantity of results does not make anything more or less "optimal."
The Pigovian analysis of Tax, Tax, Tax is pre-ordinal utility, and pre-Pareto, BTW, even though Pigovian analysis was popular for a very long time after Pareto. The whole thing depends, notice, on Alfred Marshall's style of analysis; universities which stress modern economics usually fail to condone Pigovian taxes.
Edit: I feel I should write a short math essay and put it on Arxiv or something, that gives a refresher course in basic Intermediate Micro, and link to that in this forum, because these discussions are becoming absurd in the amount of ignorance.
If someone in most universities just writes "Tax" as solution to problems, without proving it, they get 0 points. Why should this be different in an economics forum? Well?
Optimal: given initial conditions, if all members of the market were to judge the various possibilities, and their judgement was weighted in accordance with their personal wealth, and they bore the full costs and benefits of their judgement, the situation that would be judged as superior.
Coase:Negative externality is a consequence of an action that affects someone negatively who is not party to the decision.
Like your girlfriend leaving you for someone else? Or a guy not dining at your restaurant and choosing your competitor next door instead?
And yeah, tax that. Not ban.
So tax anti-virus software to discourage people from using it? Why not just ban it outright and be done with it?
Yes but no. Practically speaking, we're concerned with the price system and the market, narrowly (properly) defined.
Sure, yeah, whatever. Just get the price up.
Actually, no to both examples. Misread them, sorry.
Coase:Optimal: given initial conditions,
Do you know exactly what those initial conditions are? Does anyone, ever?
Coase:if all members of the market were to judge the various possibilities,
How many possibilities are there? How many members of "the market" are there?
Coase:and their judgement was weighted in accordance with their personal wealth,
How is their personal wealth to be measured?
Coase:and they bore the full costs and benefits of their judgement,
Do you know exactly what those costs and benefits are?
Coase:the situation that would be judged as superior.
Judged by whom, exactly? "All members of the market" together?
Irrelevant, irrelevant, irrelevant, irrelevant, dollars, irrelevant, yeah.
Demonstrate, demonstrate, demonstrate, demonstrate, why dollars?, demonstrate, this implies unanimous-decisions-or-bust.
Actually, it's all irrelevant. I defined a term. None of your questions make sense as a response.
As far as I'm concerned, your definition is ambiguous. But I can't help it if you're afraid to provide clarification.
Only your last question was an issue of clarification, and I'm pretty sure the answer is implied in the definition I gave.
Oh, and the one about how to measure wealth (dollars).
It seems to me that the use of antibiotics would not violate anyone elses property rights. So how is this an externality? Just because an action affects other people does not make it an externality.
Coase:Only your last question was an issue of clarification, and I'm pretty sure the answer is implied in the definition I gave.
As far as I'm concerned, all of my questions were issues of clarification. You have yet to demonstrate how they're all irrelevant. Note that merely repeating your claim of irrelevance does not constitute a demonstration of said claim.