Rethinking the Economy

The International City/County Management Association just came out with an report, Getting Smart About Climate Change, that’s a nice example of Principle #2, Place Your Bets. It uses case studies to illustrate nine strategies cities and counties are using to combat global warming:
1. Create more sustainable and resilient communities
2. Green the local economy
3. Engage [...]

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[Part 7 of Values-based vs. Market-based Approaches to the Economy]
The case I’ve laid out over the last six posts is not an argument against using markets as a tool. As I’ve said, for example, despite all the problems with cap and trade it’s certainly possible that this usage of markets could be [...]

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[Part 6 of Values-based vs. Market-based Approaches to the Economy]
One of the fundamental principles underlying a market-based framework is that through consumer choice, everyone gets a say. Some bureaucrat doesn’t decide what shoes you get to wear, you do. If you decide hot pink ballerina slippers or combat boots — or hot pink [...]

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This week’s New York Times Magazine also had fascinating article about efforts to come up with an alternative to the GDP — i.e., how to put a number on how our country is doing. For years, economists and activists have criticized the GDP as a bad way to measure how we’re doing. For example, Katrina [...]

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A New York Times Magazine piece on Cass Sunstein, the legal scholar who now runs the White House’s Office of Information and Regulatory Affairs, explains how he’s trying to put numbers around the cost of climate change. But as the article shows, “cost” has as much to do with politics — with what’s feasible [...]

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[Part 5 of Values-based vs. Market-based Approaches to the Economy]
It’s easy to understand why economists love market-based frameworks: they’re elegantly simple. Set the right prices and everything follows. Or as Krugman wrote about solving the climate crisis:
Econ 101 tells us — probably correctly — that the only way to get people to [...]

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[Part 4 of Values-based vs. Market-based Approaches to the Economy]
If you’ve ever heard someone preach the joys of a market-based solution, odds are at some point they’ve said, government regulations/bureaucrats can’t be smarter than the market — the economy’s just too complicated. But as we saw last week, creating a market-based solution runs [...]

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While working on yesterday’s post, I found a lot of interesting analysis of cap and trade. In case you’re a glutton for geeky green punishment, a few more tidbits:
A great series by Eric De Place making some of the strongest arguments in favor of carbon emissions trading.
In response to a Wall Street Journal [...]

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[Part 3 of Values-based vs. Market-based Approaches to the Economy]
As we saw yesterday, the strongest argument for a market-based framework is that it allows for decentralized, flexible, creative solutions vs. what Krugman calls “a ‘command and control’ fix that issues specific instructions in the form of regulations.”
That’s the theory. But step [...]

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[Part 2 of Values-based vs. Market-based Approaches to the Economy]
Last week, I argued that a values-based framework has two big advantages over a market-based framework in setting the agenda. We’re more likely to debate what really matters to us. And we’re more likely to debate who should get to decide — and in [...]

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