These lies are so often repeated and so vehemently held that even some on the left concede or repeat them. But as we will definitively show, they are nothing but illogical propaganda not based in either economic theory or reality. 2/
-
-
Prikaži ovu nit
-
Because these 5 lies are so often used by the right to argue against leftist economic policies, it cannot be overstated how important it is for those of us on the left to be able to expose & debunk them for what they are: illogical propaganda. 3/
Prikaži ovu nit -
My hope is that with this thread anyone on the left, whether or not they studied economics, should be able to debunk these oft-repeated lies. 4/
Prikaži ovu nit -
I strongly urge anyone who cares about the environment and progressive policies in general to take the time to read & understand the economic theories and arguments in this thread. 5/
Prikaži ovu nit -
Since these lies are used constantly against leftist policies such as environmental regulations, public education, Medicare for All, etc., investing a few minutes to understand the economic models that demonstrate the fallacies of these lies is a worthwhile endeavor. 6/
Prikaži ovu nit -
It is no exaggeration or hyperbole to say that coherently exposing and debunking these 5 lies is an important starting point to making positive changes that could save the human race & life on the planet. 7/
Prikaži ovu nit -
Economic efficiency, as we will prove, is the domain of the left, NOT the right. The right might speak of economic efficiency when arguing against left policies but they are either completely ignorant of basic economics or just blatantly trumpeting propaganda. 8/
Prikaži ovu nit -
As we will see, it is actually the left who holds the logical, moral & ethical high ground in terms of economic efficiency and environmental sustainability. But first we must first begin by defining our basic terms: 9/
Prikaži ovu nit -
Economics is the study of the production, consumption & allocation of goods & services and the disposal of wastes & by-products within a society. Economic Efficiency means accomplishing the above economic functions optimally while minimizing waste of precious resources. 10/
Prikaži ovu nit -
To best understand and debunk these lies we will use two economic models: 11/
Prikaži ovu nit -
Widget A Model: To produce 1 unit of Widget A it costs the manufacturer $0.50 of resources & materials and $0.50 of labor for a total cost of $1.00 per unit. 12/
Prikaži ovu nit -
However, the production of Widget A entails emissions that result in $1.00 per unit of environmental damage to the neighboring community. Another $1.00 per unit of damage is caused when manufacturing by-products are dumped into local environmental 'sinks'. 13/
Prikaži ovu nit -
Manufacturing Widget A also causes respiratory health problems for its workers, resulting in $1.00 of costs per unit incurred either by the worker or society, but not the manufacturer. 14/
Prikaži ovu nit -
Finally, after consumers complete their utility of Widget A, disposal of Widget A results in toxic seepage into the earth and water supplies causing another $1.00 per unit of social and environmental costs. 15/
Prikaži ovu nit -
So while the cost incurred by the manufacturer for producing 1 unit of Widget A is only $1, the true social & environmental cost of producing 1 unit is 1+1+1+1+1 = $5. 16/
Prikaži ovu nit -
Economists call the $4 of costs not incurred by the manufacturer or consumer of Widget A as an 'externality'. And because in this model it's a burden rather than a benefit, it's called a 'negative externality'. 17/
Prikaži ovu nit -
Prices of goods and services act as a source of information to economic actors to help gauge the true social cost of that good or service. When the price is relatively high, less is consumed & produced. When the price is relatively low, more is consumed and produced. 18/
Prikaži ovu nit -
In our model of Widget A, the true social cost is $5 however the actual cost incurred by the manufacturer is only $1.00. let's assume the manufacturer sells Widget A for $2 ($1 profit). 19/
Prikaži ovu nit -
At a price of $2 far more Widget A's will be bought & sold than would be if the cost incurred by the manufacturer was based on the true social cost of $5, and assuming the same $1 profit a selling price of $6. 20/
Prikaži ovu nit -
In other words, the mispricing of Widget A causes an inefficiency because the artificially lower price of $2 will cause far more Widget A's to be produced & consumed than if they were correctly priced at $6. 21/
Prikaži ovu nit -
The problem is actually worse than this model shows because of the built-in incentives of market capitalism. The incentive for the manufacturer of Widget A is to externalize as much of the social costs as possible in order to maximize profits. 22/
Prikaži ovu nit -
Conversely, the incentive for the consumer is also to externalize as much of the social costs as possible in order to minimize the price she has to pay. BOTH producers & consumers are incentivized to externalize social costs. 23/
Prikaži ovu nit -
Thus market capitalism causes incorrect incentives for both buyers and sellers: to externalize as much of the social & environmental costs as possible. This means the long term tendency will always be towards greater inefficiency and environmental destruction. 24/
Prikaži ovu nit -
But that’s not all. To make matters worse, even if a good-hearted, well-intentioned manufacturer decides to incur greater expenses to better care for their employees & the environment they would have to complete with all the others who don’t. 25/
Prikaži ovu nit -
This situation creates a ‘race to the bottom’, where those who care the least and most aggressively externalize negative externalities will have greater profits and more competitive advantage. 26/
Prikaži ovu nit -
Put simply, market capitalism punishes those who care and rewards those who don’t. Eventually, over time, those who care the least tend to outperform and out-compete those who care the most. 27/
Prikaži ovu nit -
This suicidal trajectory is part of the reason why it is so important to debunk these 5 lies. 28/
Prikaži ovu nit -
Ultimately if left unregulated the ‘invisible hand’ of market capitalism will lead to greater & greater externalization of negative externalities due to 1) incorrect incentives & 2) competitive ‘race to the bottom’. 29/
Prikaži ovu nit -
In order for efficient production and consumption of goods and services prices need to reflect the true social costs of those goods and services. If prices diverge from the true social costs, then either too much or too little will be produced and consumed. 30/
Prikaži ovu nit -
The fact that market capitalism inherently 1) externalizes most social costs of products and services from both buyers and sellers and 2) incentivizes both buyers and sellers to further externalize costs as much as possible means that it is inherently inefficient. 31/
Prikaži ovu nit - Još 47 drugih odgovora
Novi razgovor -
Čini se da učitavanje traje već neko vrijeme.
Twitter je možda preopterećen ili ima kratkotrajnih poteškoća u radu. Pokušajte ponovno ili potražite dodatne informacije u odjeljku Status Twittera.

