Thursday, November 29, 2007

#2 - Carbon Tax just Further Intervention

Carbon Tax just Further Intervention
by Alex Merced

Yesterday, an article calling for a Carbon Tax was published and I
felt compelled to respond. To institute a Carbon Tax is to tax
something we subsidized which is counter productive and can better be
solved by the free market solution, END THE SUBSIDIES. The US
Government subsidiezes oil through foreign intervention, by sending
foreign aid and troops to protect many oil refineries. If the US were
to end these types of subsidies we would save $19 Billion dollars a
year according to an article from the Cato Institute. This would
essentially have the same market effect of a raise in price in Oil
without us having to tax it.

Many criticize the free market for externalities outlined in a
wonderful documentary called, The Corporation. After reading up on
Austrian Economics and looking into government subsidies I understand
that these externalities are not the result of a free market, but a
market filled with government intervention. These interventions
motivate companies AWAY from the most efficient solutions to problems
and destroy the incentive of consumers to be informed on their
purchases by making decisions for them.

Corn ethanol is a great example, Corn ethanol without government
subsidies is just as NOT viable as oil, but subsidies force the market
to use inefficient material cause the new artificial price. According
to an article by Lance Winslow, Hemp ethanol can produce 4x the amoung
of ethanol, a much better bang for your buck. Yet, industrial hemp in
many cases is illegal which is yet more government intervention.
Although the different types of ethanol are all fine and dandy but how
about sugar, solor and others, subsidies on Corn Ethanol only detract
from there other more viable options.

If you leave the market ENTIRELY ALONE, meaning no tariffs, subsidies,
federal wage mandates, or other GOVERNMENT intervention, companies will
be forced to do research and develop the most cost effective and
sustainable fuel whatever that may be. The free market perscribed by
Austrian economics is still the most efficient and fair way to
distribute wealth, but even the tiniest intervention can cause long
term ramifications.

Don't take my word for it, go online and do some research on Austrian
Economics, Government Subsidies, and Foreign Intervention. For those
interested, the only candidate running for office who talks about this
type of domestic and foreign intervention is Ron Paul, go do some
research.

2 comments:

Josh said...

Good stuff. I've added you to my blog reader.

Kristoffer said...

Nice points about the negative effects of government subsidies. It'd be interesting to see the results if oil existed in a free market without government influence.