Sometimes a company that is trying to develop a new product invests in R&D or take the instance of a company providing some kind of safety net to an up-and-coming product (as in the revenue from sales of that product alone would not cover the costs but the company still does it in the hopes of getting much better returns in the long run). Could there not be an honest reason to go after alternative sources of energy?
David
· 3 years ago
That essay covers one topic that I would be interested in learning more about: how subsidization programs tend to benefit the well off at the expense of those less so. The article mentions The Logic of Collective Action, are there any other good books I should be looking into? Is there any chance that this theme, with instances of it happening, will return to Cafe Hayek?
William
· 3 years ago
This reminds me of two things:
Last year at UVa there was an attempt to get the University to buy some sort of "credits" that would support wind power. Obviously all of the University's power would still come from the same sources as before, but students would be asked to pay $7 extra in tuition. Not surprisingly, the well-meaning student body voted in favor of this measure, but fortunately, the Board of Visitors never heard about it.
The mention of taxis reminds me of my trip to Almaty, Kazakhstan, where any car willing to stop and pick up passengers is a "taxi." You stick out your arm and wait for someone to pull over. If he's going your way, you negotiate a price and get on your way. It's a pretty competitive market, and prices are cheap, even though there is price discrimination against foreigners.
Noah Yetter
· 3 years ago
"Could there not be an honest reason to go after alternative sources of energy?"
Of course there is: profit. When alternative energy is profitable, the world will switch to it. Subsidies make ventures appear profitable where they are not, thereby misaligning economic decisions from reality.
Ivan Kirigin
· 3 years ago
I am very much in favor of subsidies for _research_ into alternative energies, but not for individual products. Funding an idea that turns out to be worse than something else doesn't mean that other product loses. Peer review and selective commercialization are excellent filters.
thingsbetterwithkoch
· 3 years ago
I agree. We should continue to subsidize bad forms of energy and then the laws of unintended consequences and Murphy's Law will get us the new forms of cheap good energy that will fuel our children's futures.
medusa
· 3 years ago
I don't understand why we need to subsidize other forms of energy. After all, the profit for a successful new form would be so great there is already a trememdous amount of incentive.
Did anyone ever have to subsidize a 49'r?
John Powers
· 3 years ago
Rather than subsidize, what if we quit peanlizing alternate energy. Ethanol from Brazil is being produced at $1/Gallon. To bring it to the US brings a $.50/Gallon tax, making it un-competitive with Gasoline.
All Comments
Sometimes a company that is trying to develop a new product invests in R&D or take the instance of a company providing some kind of safety net to an up-and-coming product (as in the revenue from sales of that product alone would not cover the costs but the company still does it in the hopes of getting much better returns in the long run). Could there not be an honest reason to go after alternative sources of energy?
That essay covers one topic that I would be interested in learning more about: how subsidization programs tend to benefit the well off at the expense of those less so. The article mentions The Logic of Collective Action, are there any other good books I should be looking into? Is there any chance that this theme, with instances of it happening, will return to Cafe Hayek?
This reminds me of two things:
Last year at UVa there was an attempt to get the University to buy some sort of "credits" that would support wind power. Obviously all of the University's power would still come from the same sources as before, but students would be asked to pay $7 extra in tuition. Not surprisingly, the well-meaning student body voted in favor of this measure, but fortunately, the Board of Visitors never heard about it.
The mention of taxis reminds me of my trip to Almaty, Kazakhstan, where any car willing to stop and pick up passengers is a "taxi." You stick out your arm and wait for someone to pull over. If he's going your way, you negotiate a price and get on your way. It's a pretty competitive market, and prices are cheap, even though there is price discrimination against foreigners.
"Could there not be an honest reason to go after alternative sources of energy?"
Of course there is: profit. When alternative energy is profitable, the world will switch to it. Subsidies make ventures appear profitable where they are not, thereby misaligning economic decisions from reality.
I am very much in favor of subsidies for _research_ into alternative energies, but not for individual products. Funding an idea that turns out to be worse than something else doesn't mean that other product loses. Peer review and selective commercialization are excellent filters.
I agree. We should continue to subsidize bad forms of energy and then the laws of unintended consequences and Murphy's Law will get us the new forms of cheap good energy that will fuel our children's futures.
I don't understand why we need to subsidize other forms of energy. After all, the profit for a successful new form would be so great there is already a trememdous amount of incentive.
Did anyone ever have to subsidize a 49'r?
Rather than subsidize, what if we quit peanlizing alternate energy. Ethanol from Brazil is being produced at $1/Gallon. To bring it to the US brings a $.50/Gallon tax, making it un-competitive with Gasoline.
JBP