mdsolar's Journal: A use for market simulations

Free market economists are very very protective of their theory for good reason. They demonstrated that the free market is more efficient than a planned economy and won the cold war, defeating communism.

But let's be clear, a free market is not free, it is regulated. Certain transactions are prohibited. For example, if you are asked to pay for the privilege of me not pulling the trigger of the gun I have aimed at you, that is not allowed, even if you could instead choose to pay somebody else 10% less and there were market competition in armed robbery.

A regulatory structure that preserves certain conventions, in this case property rights, is needed for market theory to work.

Armed robbers are sent to jail even if they didn't pull the trigger, but polluters continue to pollute even when they actually kill a lot of people. They are just exercising their property rights, which need to be protected.

It is possible to add regulations on pollution similar to regulations on armed robbery, and considering the huge loss of life from pollution compared to armed robbery, long jail sentences for all polluters would be proportional. But, instead, free market economists want to impose a pollution fee or an emissions trading system and double down on markets, claiming it is an efficient method to cut pollution.

But I think things have changed since the cold war. I think numerical simulations of markets are available now that can capture the main efficiencies that such approaches might produce and provide a recipe for ending pollution that can be carried out directly, without going through the exercise of administering a fee or trading scheme. At some point the failure of simulation to capture the last dregs of market efficiencies is insignificant compared to the administrative and moral costs of playing market with people's health and lives.

So, let the market theorists use their theory to find which pollution sources should be closed in which order, and we'll make that the list we use without a fee or a trade system. And, I think those same economists can show that doing it this way will be better since it will allow us to deploy job retraining programs and avoid defaults on pensions in the polluting industry that would otherwise become large socialized costs in an actual market scheme.

lol

[Captain Splendid]

Calling the USSR a "planned" economy is like calling Justin Bieber a recording artist. It's technically true, but most people will still laugh at you when you say it.

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[mdsolar]

The wisdom of crowds is better than the ignorance of the politburo....

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[Captain Splendid]

Not exactly the highest bar to clear though. Mind you, that's always been one of capitalism's major flaws: It abhors a challenge.

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[mdsolar]

If it ain't broke, hire some marketing people....