Saturday, February 16, 2008

Pigou or nopigou???


Arthur C. Pigou was an early 20th-century British economist, one of the fathers of welfare economics. He believed governments can shape policy for the better by raising taxes on bad things and subsidizing good ones i.e. "internalize the externalities".


Is a tax on products that harm the environment is a good idea or is the free market is the best method for solving the problem.


Pigou or nopigou??


In the view of the Pigou Club: raising pigovian taxes will lower the environmental damage done by the economy. A pigovian tax is a tax levied to correct the negative externalities (negative side effects) of a market activity. For example, putting a tax on oil.

The pigou club manifesto:




In the view of the Nopigou Club: the Pigou approach is just another form of central planning dressed up in free market terminology.


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