Experiments you can do with Mark Steyn columns

Mark Steyn on the trouble he has with facts:

Incidentally, I stopped writing for the [New York] Times a few years ago because their fanatical "fact-checking" copy-editors edited my copy into unreadable sludge.

I think it's some sort of chemical reaction -- add facts to a Mark Steyn column and it curdles into sludge. Macleans doesn't seem to bother with fact checkers because check this Sten column out:

The other day, an admiring profile of Cate Blanchett ("Green before it was hip, she cites Al Gore and David de Rothschild as heroes and believes that leaf blowers 'sum up everything that is wrong with the human race,' " etc.) revealed that, in order to give her new mansion as small an environmental footprint as possible, she requested that the plumbing be constructed to "allow them to drink their own waste water." ...

Miss Blanchett and her husband have paid their architect thousands of dollars to design a system whereby the bodily waste goes down the toilet, gets whisked by pipeline through the walk-in closet, over the balcony, down the wall, back in through the rec room, and up into the wet bar directly into the soda siphon. As her fellow Antipodean, the Aussie wag Tim Blair, observed: "Not exactly Pickfair, is it?" -- Pickfair being the legendary mansion of Douglas Fairbanks and Canada's own Mary Pickford. But who's to say Pissfair won't become the norm in the new Hollywood?

All right, let's make us some sludge.

Warning: if you try this experiment yourself, you should wear eye protection and use a fume cabinet. The fumes from Mark Steyn columns can cause dizziness, nausea and foaming at the mouth. If you get a Mark Steyn column in your eye, immediately wash it out with plenty of cold water and see your physician.

Sydney's Sun Herald had a story about Blanchett's new home:

The Oscar-winning actor and her playwright husband, Andrew Upton, are splashing out almost $1.5 million in renovations to create an environmentally friendly home.

A massive 20,000-litre water tank, high-tech solar panelling, low energy lighting and grey water recycling will be among the features of the Hunters Hill home.

Contrary to Steyn's belief, grey water recycling does not involve drinking urine, because:

  1. Grey water does not contain urine -- it is the water from showers and laundry.

  2. It is treated to remove impurities.

  3. You use it for watering the garden, flushing the toilet, and clothes washing. Greywater outlets must be labelled with "WARNING DO NOT DRINK".

Now the writer of the story in W does say that the recycling system allows them to drink the recycled greywater, but she has clearly made a mistake -- health regulations require a "WARNING DO NOT DRINK" sign. Steyn then turned this mistake into his own flight of fantasy. But we're not finished yet, we can curdle more of his column, just by adding more facts!

Sheryl Crow, meanwhile, recently proposed that when it comes to, ah, other waste products, her environmentally conscious fans should only use a single sheet of bathroom tissue per visit.

Crow was making a joke. Isn't making sludge so much fun.

Well I'm sure you can see where his column is heading:

Two of those arrested for plotting terrorism this month in Germany were jihadists with the impeccably Teutonic names of "Fritz" and "Daniel." Both had converted to Islam in the town of Ulm, on the Danube, where the population is, officially, 25 per cent Muslim. That's not evenly distributed: the dying seniors are native Germans, the demographically surging youth is overwhelmingly Muslim.

Yep, the Muslims are taking over. How did he connect TMATO with toilets?

Meanwhile, on the fast depopulating plains of eastern Germany, rural communities are dying, and one consequence is that municipal sewer systems are having a tough time adjusting to the lack of use. Populations have fallen so dramatically there are too few people flushing to keep the flow of waste moving. Traditionally, government infrastructure expenditure arises from increased demand. In this case, the sewer lines are having to be narrowed at great cost in order to cope with dramatically decreased demand. For the demographically dying West, it's not a question of "sustainable growth," but of sustainable lack of growth. One can talk airily about Western civilization being flushed down the toilet of history, but it turns out even that's easier said than done. Long before Sheryl Crow's celebrity pals have squeezed their last Charmin, it will be clear that the job of "saving the planet" is one the West has bequeathed to others.

Simple really.

After curdling a Steyn column with facts, the resulting sludge should be disposed by flushing it down a toilet. Do not put it into a greywater recycling system.

Update: If you check out the blogs that linked Steyn, you find uncritical acceptance by posters and commenters of Steyn's obviously false story about Blanchett. For instance, Ed Driscoll, Van Helsing and Tim Blair. The funniest is this one, where a commenter proves that the story is rubbish, but the others' faith in the Holy Word of Steyn is unshaken.

More like this

Here is the second in what will be a series of posts on how little things like changes in technology we take for granted, or simple behaviors, can have a big impact on water use. The first looked at turning off the water when you brush your teeth: a seemingly trivial thing. It turned out not to be…
Sydney Morning Herald columnist Miranda Devine likes to import the ideas for her anti-environmentalist screeds from America. (For example, DDT ban kills millions, and hockey stick is broken.) Her latest import is the claim that low-flush toilets don't work. Here it is in a 1998 column from a…
Too much nutrient in wastewater can lead to serious water pollution. The nutrients act as food for micro-organisms and algae who use up dissolved oxygen in the water when they metabolize them. When oxygen levels go too low -- when the stream or river or pond "goes anaerobic" -- new micro-organisms…
A couple of recent Skepticality interviews (with environmental engineer Kelly Comstock and environmental toxicologist Shane Snyder) taught me something that may seem obvious, but which was radical news to me. Tap water is an industrial product. It occurs nowhere in nature. Water suppliers use…

As her fellow Antipodean, the Aussie wag Tim Blair, observed: "Not exactly Pickfair, is it?"

It doubles one's pleasure when Steyn quotes Blair. Does that make it double-sludge or sludge-squared? Perhaps the distinction doesn't matter. They're both inveterate sludge-packers.

Oh, the stories those fanatical copy editors must have...

It was Steyn's strident defence of Conrad Black that signalled the fact that Mr. Black was guilty guilty guilty. Don't know who Conrad Black is? He's a moderately successful publisher of tabloid newspapers who essentially made Steyn's journalistic career and is now headed for the pokey. If you were a certain class of Conservative Canadian,though, you would grovel at the sound of his name.

Water is of course one of those non renewbale resources that once it's used up we will never see another drop. I'm very sympathetic to Kate's intellectual abilities and not her great looks of course..

Water is of course one of those non renewbale resources that once it's used up we will never see another drop. I'm very sympathetic to Kate's intellectual abilities and not her great looks of course..

You think you're posting clever satire, but unknown to you (apparently) you're right in many cases.

When you deplete an aquifer in a few decades that has taken thousands of years to fill up, then for many generations this represents a non-renewable resource.

Sure, humans 10,000 years distant might see the aquifer replenished, but that's not the point.

But then again you'd know this if you weren't such a fucking idiot.

Hoggsie:

Don't be so silly. Most of our water supplies come from what comes down in a cloud, not what was in the ground.

3/5's of the world is water, dummy. Price it correctly and there isn't a problem especially for the rich world in terms of conversion if needed.

Water that is below ground eventually is replished from a rain cloud. Sure you're not one of these people who think that water is made like abiotic oil.

And another thing. Kate's carbon paw print could be bigger than if the brain dead twtit lived in a smaller house and used town water.

Jc, you dummy, can you please be clearer, you idiot, about whether or not you believe that it is bad thing for someone to use grey water recycling, solar power etc? Personally I am finding it hard to understand exactly why you, fucking moron, think it is deserving of ridicule.

How did I do, did I get it right? Is this how one gets one's trolling point-scoring bullshit heard...?

Price it correctly and there isn't a problem

Ah, sure sign of a Randoid, the uncritical worship of the free market.

By Calton Bolick (not verified) on 29 Sep 2007 #permalink

As I always said, he's a Steyn on journalism. Nay, a Steyn on humanity. Sigh, I know, but one must have some juvenile fun now and then at the mendacious creep's expense.

The shit that 'Shit' Steyn serves up is, apparently, a renewable resource. It only looks recycled.

By pseudonymous in nc (not verified) on 29 Sep 2007 #permalink

=="The Oscar-winning actor and her playwright husband, Andrew Upton, are splashing out almost $1.5 million in renovations to create an environmentally friendly home."==

Another case of vainglorious environmentalism. A smaller house? Ya gotta be kiddin'! And is this her main mansion or is it just a summer cottage?

"Sorry JC, but the market thinks that Cate is worth more than you."

I know, Tim, proving once again the market knows best.... for actors. Is she a member of F.A.G (derived from Team America) Film Actors Guild. Beauty beats brains at every turn.

MP

You're obviously suffering another incident of blog rage. As your parole officer I have to warn you that another incident like that will automatically mean you go back to prison.

Calton Bolick :

"Price it correctly and there isn't a problem

Ah, sure sign of a Randoid, the uncritical worship of the free market."

Bollicks, Calton. Can I humbly ask if that is your real name.

I turned heavily against Mark Steyn when I read his "We're losing the war because we didn't kill enough Iraqis at the start" column. That was in 2005, I think, before the Lancet surveys, which must have cheered him up enormously. Apparently, Steyn believes a couple of Hiroshimas or Dresdens would have nipped the Iraq insurgency neatly in the bud, or even sooner.

The newspaper that published Steyn here in Ireland (The Irish Times) dropped his column soon afterwards, a result I think of the protests at his outrageous remarks.

Steyn was written that column sometime after he went all dewy-eyed and emotional about the "right to life" of a brain-dead American woman, Terry Schiavo.

Anyone who could write those columns without a twinge of conscience, or a slight feeling of hypocrisy, is either a raving idiot or a psychopath who can convince himself that even his worst impulses are intrinsically moral. Steyn, I surmise, is a mixture of both.

Very funny, Tim:
Incidentally, I stopped writing for the [New York] Times a few years ago because their fanatical "fact-checking" copy-editors edited my copy into unreadable sludge.

I think it's some sort of chemical reaction -- add facts to a Mark Steyn column and it curdles into sludge. Macleans doesn't seem to bother with fact checkers because check this Sten column out:

Never realized you had a good sense of humor (i did actually)..... unlike the mirthless mammals that populate this site in the wee hours across the GMT.

(That reminds me, where's Marion Delagardo today demanding another head to roll from the guillotine. Man, that's one hell of an intolerant, angry gal.)

One slight problem With your comment though. I'am afraid Mark Styen is right about the NYTimes. When Frank Rich, Paul Krugman, Mo Do are populating the op-ed section you not only know it's a fact-free zone, you may also reach the conclusion that you are quite close to singularity (of insanity). It's the zone from where no sane thoughts could ever escape.

Some while ago the NYTimes (ombudsamn) actually came out and said they are far loser with the facts when it comes to opinion columns. One reason they appointed such a person was because of constant issues with with complaints about the paper's dishonesty.

No wonder, with that lot!!!!!

Ah jc you ignorant slut the issue is fresh water of which there is an undersupply. Of course we would be happy to kill your garden with sea water.

The New York Times can get sloppy with the facts but has anyone bothered to read MacLeans since Rogers bought it out and Steyn started writing for it? Sheesh! I'd take the NYT anyday.

How do you figure there is an undersupply, Eli, you big time science teacher you. Most water systems are supplied by governments around the world so we really don't know what the real price for water actually is most often. With a Soviet command and control system we invariably see shortages develop.

My point about sea water is that we could see large scale desalination systems begin to operate if the price signal was allowed to work as well as material changes in conservation practices by buyers.

There is no shortage of water, Eli, that's just you being too silly for words.

We would also begin to see such things as efficiences begin with water intensive farming leaving Sth Cal and moving to Sth Am for such things as large scale fruit production.

Eli, you have been hanging round campus for too long. Grow up boyo and get in the real world. Jeesh.

JC:

We would also begin to see such things as efficiences begin with water intensive farming leaving Sth Cal and moving to Sth Am for such things as large scale fruit production.

Or, mmmm, the recycling of grey water, eh, JC?

Much cheaper and less disruptive to the local economy than outsourcing ag production.

Sydney is getting a desalinisation plant which will cost us two billion dollars. Seems that greywater recycling might be cheaper, but whatever.

Hoggise

"Much cheaper and less disruptive to the local economy than outsourcing ag production."

Only because the rest of the state is forced to subsidize an industry that should never set up in South Cal. If you removed the subsidies the industry would fold and people in Sth Am would be able to earn a better living supplying the Nth AM market efficiently produced food.

The water subsidy to Cal farmers is massively distortive.

Tim L

Grey is dervived from clear water. If it doesn't rain in Sydney you don't have either. The desal plant is a reasonable insurance policy and we don't have to always live with the threat of restrictions.

Privitize it and let the market the decide the real price of water and the best way to supply needs.

Only because the rest of the state is forced to subsidize an industry that should never set up in South Cal. If you removed the subsidies the industry would fold and people in Sth Am would be able to earn a better living supplying the Nth AM market efficiently produced food.

JC has the charming disconnect from reality that South American farmers don't benefit from direct and indirect subsities.

Sigh ...

Ah Jc you ignorant slut, what do you propose to use for energy to run desalinisation plants? It must be fun living there in the sugarloaf mountains where the majic market makes everything free.

jc has many disconects from reality, few charming.

Hoggise:

So you let them subsidize to their hearts content. As the American consumer you would be better off if they continued to make produce cheaper for you by the Brazilian government funding it. Never look a gift hourse in the mouth.

In any event, it would be different places producing the fruit and veggies. Central Aemrica, Columbia etc. Places with plenty of water that are itching at the bit to gain bigger access to the massive north American markets.

Cal has a big water problem brought about by massive subsidies towards farming practices that should never have taken off but for silly water pricing methods.

Giving this game away would also reduce the illegal issues is some way as incomes rose in Sth Am as a result.

We have he same issues in Oz.

Water isn't in short supply. It's just priced incorrectly in most places thereby causing misallocation.

Eli's back with the equivalent of the killer app.

Gee whiz mergatroid you got me there. In this case Mergatroid and his mind bender.

Eli, dude, stick a nuke power plant beside a desal one and you could empty out the pacific in a week :-)

Please provide a list of your limitations and I will tell you what the possibilities are within the scope of the conditions you set. But I suggest you try not to make too many limits as we could end up having to shower once per week.

MIT technology report thinks they can reduce the cost of desal by up to 80% with a nifty carbon nanotube filter in a few years time.

Hoggsie:

Cheap water subsidies to West Coast farmers is a shockingly bad method of resource allocation. It should never have happened and and it ought to stop immiediately.

The US particularly California which is about the wealhtiest region in the world can make far better use of scarce capital than to put it into fruit and market garden farming. A great deal of that land could be used for natural reclamation. There would also be far less pressure on water demand up and down the state.

Eg:
Colombia would be a natural orchid for the US. It has plentiful water resources and produces up to 180 different kinds of fuits. Doing away with Cal farm subsidies would be a massive boost to Sth Am farmers that would make these countries wealth in a short period of time. Moreover the US would receive a boost as well- cheaper food supplies and a capital structure that is focused on what it does best. The Colombians are also best able to apply intense farming per acreage due to water supply and soil richness.

I keep repeating to you guys that a major cause of our problems are the result government induced distortions. Remove those and we're on our way to a more efficient cleaner enviroment with more nations increasing their wealth status.

Nicely summarized, Tim, and indeed, this is a big benefit of internet stuff - that you can show several articles so immediately. The goal of a Steyn is to dribble out the lies so you've forgotten the last iteration before you see the next.

By Marion Delgado (not verified) on 30 Sep 2007 #permalink

When the trolls bring up Austrian arguments about the distortion of "so much" government, I simply say, that's not my rule. I won't be part of revisionism and denial about privatization failures, deregulation failures, or any other market failures simply for the voodoo reason that if there's even one regulation or one commons or one co-op anywhere on Earth, the butterfly-wing fragile hothouse flower that is free market economics simply can't be held responsible, since that just RUINS it. If that's the case, then that's yet another failure of the system, and a deal-killing failure at that. And the next time they follow that up with "it's the way of nature and the strongest economic paradigm ever developed" you have my permission to hit them with a pie.

By Marion Delgado (not verified) on 30 Sep 2007 #permalink

Marion:
What happened, no thirst for blood today? No demand that trolls ie. people who disagree with your warped ideas must be banned? I'm waiting for the time of graduating to your inevitable demand for public beheadings!!!

Let's see what Marion has to tell us she we?

When the trolls bring up Austrian arguments about the distortion of "so much" government, I simply say, that's not my rule.

Trolls? Oh you mean people who disagree with you? Listen Popsicle, one doesn't have to be an adherent of Mises to argue that free markets offer better outcomes in the provision of goods and services than does the opposite. You're too ideologically blind to see that however so that argument is lost on you. If you can just prove to us that demand curves don't shift downward in a particular good or service and then we'll see. Until such time your argument is about as worthless as a dog shit on a dress shoe.

I won't be part of revisionism and denial about privatization failures, deregulation failures, or any other market failures simply for the voodoo reason that if there's even one regulation or one commons or one co-op anywhere on Earth, the butterfly-wing fragile hothouse flower that is free market economics simply can't be held responsible, since that just RUINS it
'
What a long disjointed, tangled mess of a sentence. Listen genius, the soviets learnt long ago that unless you have a price signal the market won't work effectively. Now you can spew however much venom you like towards "trolls" (ie people who disagree with you) but it won't change the fact.

The biggest problem with the provision of water is that a great of the industry it is government run. That's why water is misallocated to a large extent causing the distortions I'm referring to.

If that's the case, then that's yet another failure of the system, and a deal-killing failure at that

Bullshit. You simply don't understand what the hell you're talking about.

And the next time they follow that up with "it's the way of nature and the strongest economic paradigm ever developed" you have my permission to hit them with a pie.

Another day and another demand for violence from this very angry little woman.

Marion. Get counseling, as blog rage is a bitch.

I would also suggest you pick up a few textbooks on economics for beginners before you go lecturing anyone as your ignorance is obvious.

Now behead me!

I keep repeating to you guys that a major cause of our problems are the result government induced distortions. Remove those and we're on our way to a more efficient cleaner enviroment with more nations increasing their wealth status.

mind to name a SINGLE nation with LESS government "distortions" and CLEANER environment?

"mind to name a SINGLE nation with LESS government "distortions" and CLEANER environment?"

You mean like doing more with less.

Here Sod.

US GDP trebled between 1970 and 2003. However if you picked up the US economy and weighed it, it weigh 25% less in 2003 than 1970.

Hong kong uses far less input to produce a unit of GDP than Singapore two enitites that took off at about the same time and have similar racial characteristics. See RBNZ study fromt eh 90's.

The obvious corollary is that you believe the opposite.

JC - Since the Fed and the Bank of England are currently having to bail out a large number of financial institutions who invested in in loans which were basically crap, its difficult to see the logic in the statement 'free markets offer better outcomes'. Perhaps you should pick up an economics textbook which actually makes makes reference to the real world before you start lecturing - perhaps Galbraith's 'Great Crash' would be a good start?

And while '3/5's of the world is water', the vast majority of it is salt water or otherwise undrinkable. Drinking water is scare, and the free market can't change that, no matter how much you might believe in it.

Oh, and if you want to make serious points, don't call Marion 'Popsicle' - trolling is annoying, but now your getting unpleasently personal.

JC - Since the Fed and the Bank of England are currently having to bail out a large number of financial institutions who invested in in loans which were basically crap, its difficult to see the logic in the statement 'free markets offer better outcomes

Don't be idiotic, mikeb, the world's monetary system is a socialist setup 100%. Central banks choose the short-term interest rate, level of the money supply from one year to the next, they attempt to influence the bond markets through open market activities and finally they issue the currency as legal tender. Monetary policy in the west reeks of interventionism.

The central banks bailed out institutions as a result of the problems they (CBs) created through their own actions by allowing money supply to increase at too high a rate and maintaining low interest rates and very high liquidity conditions. They are now in the process of adding another dimension to this sorry state through moral hazard and a put on the stock market.

So don't friggen dare attribute these shenanigans to the free market. That argument is a fraud and those who propose it are fraudulent or ignorant.

Perhaps you should pick up an economics textbook which actually makes makes reference to the real world before you start lecturing - perhaps Galbraith's 'Great Crash' would be a good start?

I have read it and thanks for asking. It's truly pathetic. JKG was a nice man, a good writer but he was a terrible economist: something even his NYT obit admitted. There are far better books on the subject.

"And while '3/5's of the world is water', the vast majority of it is salt water or otherwise undrinkable

Really? Who would have guessed?

Drinking water is scare, and the free market can't change that, no matter how much you might believe in it.

I never said it could change it, however market pricing would ensure better allocation and it may also introduce large scale desal if required. We don't know for the most part, because water is essentially based on the soviet model of command and control that invariably leads to misallocation, wastage and/or shortages. That's always the case when you allow for the government to provide goods and services.

Oh, and if you want to make serious points, don't call Marion 'Popsicle' - trolling is annoying, but now your getting unpleasently personal

She makes contemptible comments like you do by referring people who disagree with her in vile ways. She deserves all the respect one would afford a rat near a kitchen Like you do too Mikeb for making the same references.

Since HK has moved most of the manufacturing across the line to Shenzhen as the US moved manufacturing off shore, while Singapore retains much of its manufacturing base, one fails to see jc's point (oh yes, that one, but the hat covers it well).

jc, you ignorant slut, nuclear power is not free either. You can stick a nuclear power plant near the sea (the Soviets did it) but the capital, fuel cycle and operating costs still make it expensive water even if you use the rejected heat to run the desalinisation.

Geez, no cost energy, free water, it sure is great out there in majic mountain country. Yah gotta stop smoking those free market dope ciggies jc.

And yeah Marion is a guy, like John Wayne who originally was a Marion. Made that mistake myself to my shame.

Eli

For Christs sake, stop being so pig ignorant. Of course nuke power has a cost, did I ever say it was free? Does everything go over your head. The marginal cost of the additional water prodced by desal may be worthwhile IF IF IF we really knew the real market price of water through the price signal. We don't know that in most cases becasue water is not priced as market good.

We may not even require additional water through desal if the allocation was made through the market process instead of allowing huge rent seeking to sneak in. In other words California could be swimming in water if it were priced by the market and my hunch that water intensive industry such as fruit and veg farming moved to where water was plentiful such as Central Am. Is that clear now?

"impeccably Teutonic names of "Fritz" and "Daniel."

Daniel isn't exactly Teutonic. I seem to recall a famous Daniel who was rather Jewish and middle eastern. Something about lions.

Doubtless the sort of thing that fact checkers would have ruined.

Eli........

AND........

Listen up and stop making inaccurate assertions such this:

Since HK has moved most of the manufacturing across the line to Shenzhen as the US moved manufacturing off shore, while Singapore retains much of its manufacturing base, one fails to see jc's point (oh yes, that one, but the hat covers it well).

When what I said was this:

Hong kong uses far less input to produce a unit of GDP than Singapore two enitites that took off at about the same time and have similar racial characteristics. See RBNZ study fromt eh 90's.

I'm not talking about manufacturing here, Professor. I'm talking about units of capital input to demonstrate efficiency in being able to achieve more with less. HK was far more laissez faire than state directed Spore.

The US has moved a great of manufacturing offshore, however there is a great deal more manufacturing done in the US in 2003 than there was in 1970.

You're ignoring that startling statistic of the US GDP being 3 times bigger 2003/1970 and 25% lighter.

Oh, look. Jc is copying my anger, even down to the vermin quip! How cute, a wingnut troller slavishly mimicking. They never can be original till they grow up, which in this case will likely be never.

JC is confusing Pareto efficiency with efficiency in energy/resouce use.

UNIVERSITY-TRAINED LIARS (Economists)

DELIBERATE LIE #4. The market is "efficient".
This is central to economic theory, but it's also a deliberate lie (actually an "idiosyncratic redefinition" of terms). Economists know that people who do not have economic training are going to assume that "efficient" is used in the same way that engineers use the word: acting or producing effectively with a minimum of waste, expense, or unnecessary effort.

But for economists, "efficient" means either "efficient distribution" of profits or "efficient production" of products - not the "efficient use of materials." Since the market economizes "money" (that which is limitless supply), the rich get richer and the poor get poorer. The reason economists use idiosyncratic redefinitions instead of coining new terms (like every other discipline) is to make them better liars!

Idiosyncratic redefinition allows economists to stand in front of your local Rotary Club and appear to HONESTLY use words that mean one thing to them, while Club members think they mean something completely different. This is how economists evade our innate ability to spot liars.

Far from being "efficient", the so-called "market system" is probably the MOST INEFFICIENT social organization possible! The overhead (commuting to work, banks, insurance companies, advertising agencies, etc.) associated with our present way of organizing consumes the largest fraction BY FAR of our natural resources.

Here is a very rough idea: In 2004, Americans consumed about 342,700,000 Btu, per capita, per year. [8] This converts to about 86,358,951 calories per year [9] or 86,358,951 / 365 = 236,599 calories per day. But humans only require something like 3,000 calories per day to survive, so it seems we (very roughly) waste something like 236,599 - 3,000 = 233,599 calories per day, per capita.

Studies show that food grains produced with modern, high-yield methods (including packaging and delivery) now contain between four and ten calories of fossil fuel for every calorie of solar energy. So we will allow ten calories of energy to grow and process each calorie of food delivered, so 3,000 * 10=30,000 calories per day is required to keep someone alive. Thus, 233,599 - 30,000 = 203,599 calories are still being wasted each and every day, by every American.

Let's allow 20,000 calories per day, per capita to collect and deliver food and water to each and every household in the country, so 203,599 - 20,000 = 183,599 calories wasted per day, per capita in the US.

Population in America is 302,664,192 (August 2007 est.), [10] so 183,599 * 302,664,192 * 365 = 20,282,627,690,257,900 calories or 2,028,262,769 tonnes of oil equivalent is wasted each year in the US feeding people! (In 2006, oil production in the Middle East was only 1,221,900,000 tonnes! [11]) The market system is obviously the most inefficient organization in human history!!

On a spherical planet, governed by the laws of thermodynamics, "the market system" WILL end - sooner-or-later, one-way-or-another.

http://www.warsocialism.com/economic.htm

This is great, there's someone here who didn't know water is a limited resource. You learn something new every day.

JC, go to Florida. Ask them whats happened as their aquifers dry up (sink holes, massive water shortages.) Realize they got tons of rain... See how none of your logic adds up.

Water is a limited commodity.

By Evinfuilt (not verified) on 01 Oct 2007 #permalink

You mean like doing more with less.

Here Sod.

US GDP trebled between 1970 and 2003. However if you picked up the US economy and weighed it, it weigh 25% less in 2003 than 1970.

Hong kong uses far less input to produce a unit of GDP than Singapore two enitites that took off at about the same time and have similar racial characteristics. See RBNZ study fromt eh 90's.

The obvious corollary is that you believe the opposite.

funny, but the term ENVIRONMENT does NOT show up in your reply. less cost of a unit of whatever does NOT imply a better environment.

singapore is doing very well, btw. very high quality of life index, very good education.

http://www.economist.com/media/pdf/QUALITY_OF_LIFE.pdf

(and yes, for a moment let s us ignore all the other differences between Hong Kong and Singapore..)

so again:

"mind to name a SINGLE nation with LESS government "distortions" and CLEANER environment?"

JC brings up nuclear power as the free marketers tend to do when confronted with the issue of powering their cornucopian utopias. The most important problem with nuclear power is a lack of fuel in the form of the necessarily concentrated uranium ores. I'm sure he'll trot out dilute uranium "sources" like seawater, phosphates, granite, and coal. Low density sources are a non-starter from a net energy standpoint with our current once-through fuel cycles and highly speculative with fast breeder technology that nobody seems to be able to commercialize.

http://ihp-lx2.ethz.ch/energy21/nuclearoption.pdf

looking at nuclear technology, Jc s cailm becomes incredibely bizarre:

if thee was ZERO state regulation on nuclear technology, we would have cheaper and safer nuclear technology and the industry would treat the wastes in a way, that cause LESS environmental problems/dangers.

must be great to live in wonderland!

Where did I say that , Sod?

Eli,

Nice try, I never said water wasn't a limited resource.

Do you often make things up, professor?

JM

I'm not confusing anything. You are.

I don't suggest markets are pefectly efficient, you dope. I am asserting that market are superior in the allocation process than a public servant or in your case socialism.

Nice try in suggesting socialism is superior. That's possibly the dumbest comment I've read in while. It's so dumb that even the people at this site would be embarrassed to support it openly.

We have been through that arguemnt for 200 years of history of economic ideas. Yours was proved wrong ages ago. It's not even worth discussing.

Jc wrote:

How do you figure there is an undersupply, Eli, you big time science teacher you. Most water systems are supplied by governments around the world so we really don't know what the real price for water actually is most often. With a Soviet command and control system we invariably see shortages develop.

Yes, that's absolutely right, Jc. We saw what wonderful efficiencies could be introduced into water supply when the UK privatized all of the water companies some years ago. The result was much improved efficiency for the investors, who made out like bandits.

In particular, it turns out to be much more efficient to save money by not investing in infrastructure (specifically fixing mammoth leaks in the water distribution system), rather than inefficiently ensuring that there is enough capacity for hot years, which you don't need most of the time. I mean, the lost profits that occurred when the water actually ran out every now and again turned out to be not worth chasing with additional investment. Simple math, really.

Hooray for the invisible hand of the market!

By Brain Hertz (not verified) on 01 Oct 2007 #permalink

Brian Hertz

The British example is how not to privatize. It is a private monopoly with government supervision.

Instead the supply and catchment should be seperated allowing anyone to supply the market.

Jc,

I understand your point, but it doesn't address the problem that occurred in the case of the UK situation in 1995-96.

The problem wasn't the supply of water at the source, it was the distribution (the pipes leaked and it wasn't economic to fix them). How would you propose to create competition that can be exploited by individual consumers as to their choice of supply pipes?

In any case, even if you could do that, it wouldn't have solved the actual problem: specifically that it was more economic to have water run out in some places under extreme conditions than to invest in the (over)capacity required to prevent it.

Incidentally, the problem was eventually fixed by government regulation. The market was clearly illustrated not to be capable of fixing the problem.

By Brain Hertz (not verified) on 01 Oct 2007 #permalink

Clarification: what I referred to as "supply of water at the source" is, I think, what you termed "catchment", and what I termed "distribution" is what you termed "supply".

Not making a point, just aligning the terms.

By Brain Hertz (not verified) on 01 Oct 2007 #permalink

by the way, the reference in the OP to Sheryl Crow reminded me of the headline on one of the major US media websites (I think CNN) reporting on the controversy surrounding the joke. It briefly read (I'm not making this up):

"Furor Over Sheryl Crow Toilet Paper Crack".

It got changed a little while later. I guess one of the "fact checkers" must have read it and decided that it sort of came out wrong...

By Brain Hertz (not verified) on 01 Oct 2007 #permalink

It's as if they don't understand, not just balance in chemical reactions, but even mixtures.

By the way, on my list of 10 books I wish we could force the fanatics to read, I would put Jeremy Rifkin's Entropy at the very top. a good refresher on significance for the rest of us, it also points out the PRECISE things they don't know about.

A lot of other work (Jared Diamond's comes to mind) is really just an expansion on it. and the "into the greenhouse world" expanded edition was quite ahead of the curve.

By Marion Delgado (not verified) on 01 Oct 2007 #permalink

By the way, every one of their absurd "beliefs" seems to have an ulterior origin - anti-evolutionism? not just pleasing the traditionalists - it's also useful for denying resistance to disease caused by agriculture and animal husbandry and unnecessary medical use of antibiotics and so on.

And this water thing? Well, this way you can deny that what Israel does in the Occupied Territories and the US does in Iraq - denying the locals water, especially fresh water - is not a major atrocity and an unforgivable crime. It's making the desert bloom and spreading democracy. It's helping the market find the correct price (and correct buyers) of water.

By Marion Delgado (not verified) on 01 Oct 2007 #permalink

Marion;

in your previous life, did you have an ugly moustache, thin lips and referred to yourself as the general secretary of the party? Have you eve tried to channel this previous life of yours, dude?

Maron says:

"By the way, on my list of 10 books I wish we could FORCE the fanatics to read, I would put Jeremy Rifkin's Entropy at the very top. a good refresher on significance for the rest of us, it also points out the PRECISE things they don't know about."

I capitalized what I thought was the most pertinet word in your rant there, Marion.

As an aside, do you own a knew length black leather jacket, refer to most people as comrade and have this strong desire to put to death anyone who disagrees with your opinions?

Brian H

Good question

Allow many suppliers to enter the market. In fact allow anyone who wants to supply safe drinking water to enter the market.

If the firm didn't feel there was need to fix the pipes it's their issue to figure.

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price. This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

in your previous life, did you have an ugly moustache, thin lips and referred to yourself as the general secretary of the party? Have you eve tried to channel this previous life of yours, dude?

Godwin's law ...

Where did I say that , Sod?

you are slippery like a fish and prefer not to say anything of substance.

but here is what you said:

I keep repeating to you guys that a major cause of our problems are the result government induced distortions. Remove those and we're on our way to a more efficient cleaner enviroment with more nations increasing their wealth status.

i simply paraphrased that over to nuclear technology.

I keep repeating to you guys that a major cause of our problems (with nuclear technology) are the result government induced distortions. Remove those and we're on our way to a more efficient cleaner enviroment (concerning nuclear waste, fuel and technology) with more nations increasing their wealth status.

so less state regulation, better safety, cleaner and more efficient nuclear technology?

funny but even you seem to think that it doesn t make any sense.

"i simply paraphrased that over to nuclear technology."

Is that like you saying.....

"I had an affair, dear. This time it was with my mother."

You had no reason to paraphrase, you sod. You're just being mendacious.

Hoggise:

godwin's law is a lefoid construct meant to close debate when the jackboot becomes too obvious. It's old and very well past it's used by date.

You had no reason to paraphrase, you sod. You're just being mendacious.

you avoided to make a point, again.
that is a good tactic, when your points are generally WEAK, and when you tend to lose every discussion.

so why not make a point, once in a while?

would less state regulations improve the efficientcy and environmental influence of nuclear power or wouldn t it?

how abaout water?

your claim is:

I keep repeating to you guys that a major cause of our problems (with drinking water) are the result government induced distortions. Remove those and we're on our way to a more efficient cleaner (enviroment) drinking water with more nations increasing their wealth status.

sounds reasonable. without government regulations into agricultural use of chemicals and industry waste water, we would have HIGHER qulaity drinking water.

of course!

Yea , You're right. Sorry Tim. No disrespect was meant to you.

jc, are you suggesting privatizing water distribution networks is a good idea? if so, you should know that not even the most deranged of neoclassical economists would advocate such a thing. this is a very strong statement by the way. reason being, water distribution is about the purest example of what's known in the literature as a natural monopoly as there is. so, do us all a favor and go study up on the basics and then see if you can't formulate a coherent comment.

also btw, sod's point is that the market has a tendency to come up short in dealing with public goods especially as they relate to negative externalities. again, a little reading goes a long way. have at it sport.

By Majorajam (not verified) on 02 Oct 2007 #permalink

major.

Don't be silly.

Bundling the water business as catchment and distribution together has got the UK in the mess it is now primarily because it is a natural monopoly situation for both catchment and distribution.

Unbundling does two things.

It focuses the distribution business in terms of getting the water from the seller to the buyer with less friction. Whose water? It doesn't matter, as far as the distributor is concerned.

Catchment of course becomes an entirely different business.

The need for regulation is simple when the industry is unbundled. The distributor is not compromised in this deal, as the firm doesn't care whose water passes through the pipes.

Not unbundling has caused all sorts of problems in other industries after privatizations.. You see this in the Telco area where after several years of allowing one dominant telco to own the copper wire to the home competition is problematic without forceful regulation. Right now several countries like Sweden? and New Zealand are in fact forcing unbundling. In other words the distribution business- the copper wires- are being separated out from the rest of the telco for the obvious reason that the unbundled entity is not behaving as competitively as it could. The advantage is that the new entity ( the copper wire owning entity) will not discriminate and allow all players through the wires indiscriminately.

The behavioral characteristics of the water business would be not much different in fact.

The Coarse theorem would support the privatization of the water business as an unbundled series of firms.

Allow many suppliers to enter the market. In fact allow anyone who wants to supply safe drinking water to enter the market.

If the firm didn't feel there was need to fix the pipes it's their issue to figure.

Are you actually suggesting that streets should have multiple sets of water mains in them? Do you honestly think that alternate providers would start digging roads up to install competing water mains if they were allowed to?

In any case, I think you're missing the point. Absent regulation, the water runs out sometimes because that is the most economic solution for the providers. It doesn't matter how much a particular individual wants to pay a supplier if there is no water being provided to that region. Is that really what you want?

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price. This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

So the solution is for the price to go up to the point at which a segment of the population can no longer afford to buy water?

You're just assuming, of course, that it is possible to create an actual market for water. For numerous practical reasons, as already described, there isn't a way of doing that.

By Brain Hertz (not verified) on 02 Oct 2007 #permalink

"also btw, sod's point is that the market has a tendency to come up short in dealing with public goods especially as they relate to negative externalities. again, a little reading goes a long way. have at it sport."

Sod's wrong and he needs a decent dose of remedial economics to get him back on track.

He's wrong under Pareto efficiency theory and he's wrong under Coase.

Bundling the water business as catchment and distribution together has got the UK in the mess it is now primarily because it is a natural monopoly situation for both catchment and distribution.

you DO notice the significant difference between water distribution and telecommunication?

anyone who is talking about the UK and the "benefits" of privatization should be forced to travel by rail. only.

Sod's wrong and he needs a decent dose of remedial economics to get him back on track.

i am deeply impressed. Jc believes that i am wrong.

as always, Jc does NOT support this claim with any argument.

with no regulations by the state, nuclear power would be NEITHERsafer, more effeicient or better for the environment.

with no regulations by the state, water supply would be NEITHER better, more effeicient or or providing cleaner water in the long term. FACT.

Brian says:

"Are you actually suggesting that streets should have multiple sets of water mains in them? Do you honestly think that alternate providers would start digging roads up to install competing water mains if they were allowed to?

No we can't do that in existing cities as it is too late. However we can make the catchment business more of a cosntestable market and regulate the pipes business. This does increases competition.

In any case, I think you're missing the point. Absent regulation, the water runs out sometimes because that is the most economic solution for the providers. It doesn't matter how much a particular individual wants to pay a supplier if there is no water being provided to that region. Is that really what you want?

If it runs out it runs out and we're all dead, we have to move or we desal. However it does rain still don't forget.

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price.

It's not the market price. it is the government mandated price. Most likely it is too cheap in places where it ought to be more expensive and too expensive in places where it ought to be cheaper. We don't know. The present system is the difficulty the Soviets and the facsits found in price discovery.

This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

You don't know that until you allow the market to set the price in a constestable market.

So the solution is for the price to go up to the point at which a segment of the population can no longer afford to buy water?

You're food supply is supplied by the private market. do you think the government could supply it cheaper. If you do then the Sovs could have learned a thing or two from you.

You're just assuming, of course, that it is possible to create an actual market for water.

I am not assuming it. I know you can.

For numerous practical reasons, as already described, there isn't a way of doing that.

I don't agree. Sorry.

You are beginning to see a lot of movement from private firms in this area around the world as the capital costs of supplying water are beyond the scope of government budgets and the returns are quite good.... about 20% per year compounded for the last 5 years.

"with no regulations by the state, water supply would be NEITHER better, more effeicient or or providing cleaner water in the long term. FACT."

really Sod. When did you last buy your government supplied food such as meat and veggies. Go see why the socialists gave up this sorry caper.

I never mentioned nuke in this context but seeing you asked........

Regulation of nuke power could be achieved through the private market with the government ensuring proerty rights are strenghtened and insurance premiums are paid annually. Nuke power can also be located 100 miles away from city population with the offer of ( I think) DC power.

Sod, why do you wanna rely on public servant for your safety?

Don't be scared now.

"anyone who is talking about the UK and the "benefits" of privatization should be forced to travel by rail. only."

You undundle the rails , Sod and let the market compete for slots at the stations.

I am not pretending that some of the early privatizations weren't badly handled. However that doesn't mean future priavtizations should be also. WQe learn from mistakes.

Sod, I know this shit, ok. There is nothing this area of the universe you know that i don't know more of. So settle down and get used to it. Socialism doesn't work. It never has and never will. Keep repeating that to yourself.

Response to Zeno: How about double plus un-sludge?

Jc,
you might want to revisit your post at 73. Half way through you seem to start arguing with yourself (specifically your post at 60)....

And by the way, "unbundling the rails" is a pretty good description of how rail privatization in the UK actually proceeded. It wasn't pretty.

By Brain Hertz (not verified) on 02 Oct 2007 #permalink

jc, you're right and rockefeller was wrong. there is no advantage to monopolistic power over an extremely capital intensive network. water distribution would be practically free if we removed regulations on pricing so that free enterprise practicing firms would set up rival networks, i.e. stick miles of pipe in the ground having zero salvage value; bond holders aren't typically concerned with such things. this can be seen by how much competition can be found on landline telecom and internet access in the us post deregulation. nuclear power plants would be much more cheap and safe if private companies who bear the costs of safety and waste handling were not regulated.

don't let the particulars of huge bodies of academic research let alone common sense dissuade you in your quixotic quest jc. you're doing magnificently.

By Majorajam (not verified) on 02 Oct 2007 #permalink

A while ago, I read a Mark Steyn column about how internees at Guantanamo Bay were being pampered with catered meals and comfy pillows. This left me highly confused, because it conflicted with all the other reports of desperate conditions, but still I supposed that despite his humorous bent, Steyn was a legitimate journalist and had at least some tether to reality.

To quote Rush Limbaugh, "To be funny, humor must contain an element of truth." Now I realize that Steyn cracks jokes not to stretch the truth but to destroy it. He lied about Guantanamo. He lied about torture, and that's just not funny. For me, Steyn once stimulated laughter but now he only provokes absolute contempt.

You can consume your own waste products, Mark, because I won't be reading them any more.

I have absolutely LOVED reading all of these comments. I read every one of 'em. As a disinterested third party, I observe that JC seems to know what he's talking about and is quite convincing. But maybe I just wanted to agree with him because he called someone "Popsicle." That made me laugh out loud.

Majorjam:
"jc, you're right and rockefeller was wrong. there is no advantage to monopolistic power over an extremely capital intensive network."

Rockefeller was one of the most innovative people of the last 200 years. He totally revolutionized the refining and distribtuion business in the US and then the world. He made oodles of money because he was able to offer refined gas at a fraction of the price. The guy was a friggen hero to the consumer.

Don't make the mistake of confusing state sanctioned monopolpy with a concentrated number of players in contestable markets. If a market is contestable and has no barriers to entry set up by the government there is no problem.

People/ consumers made Rockefeller rich becasue he was able to offer them cheap fuel. Buy a picuture of him and prey to him each night as he made all our lives better.

A quick NYT Search query lists Steyn's last column for that paper as having run in 1996. If that's correct, Steyn starts out with, if not a lie, then a weird distortion. Eleven years is not "a few years."

But read on for the really juicy stuff. It's Steyn's pompous letter to the editor, and a lacerating reply by the reviewer. Gottlieb nails the problems with Steyn, which obviously continue today!

Published: June 20, 1999
To the Editor:

I'm grateful to Robert Gottlieb for his advice, in his review of ''Broadway Babies Say Goodnight,'' that I ''should have stopped more frequently to look things up'' -- stopping frequently to look things up being the defining characteristic of editing at both your esteemed organ and Gottlieb's old home, The New Yorker.

That being the case, I was interested to learn from Gottlieb's review (and your headline) that I am ''British'' and ''a transplanted Englishman,'' and to note the conclusions he drew therefrom.

As it happens, I'm a Canadian (untransplanted) -- and it is, alas, the case that writing for a London newspaper can't make you English any more than sleeping in the cowshed makes you a Holstein. In this instance, there was really no need for Gottlieb to stop and look anything up, since on page 319 of the book there is an account of my arrival at Heathrow Airport immigration so riveting and vivid that several London critics opened their reviews with it.

Mark Steyn
Montreal

Robert Gottlieb replies:

It would be unkind to readers of The Times to deprive them of the passage from ''Broadway Babies Say Goodnight'' that the author himself characterizes as ''so riveting and vivid.'' Here it is: ''I'd also like to thank Tom Sutcliffe of The Independent, who was the first person in the United Kingdom to ask me to write about musicals, and who gave me a fancy title, too: when the immigration officer at Heathrow asked me the purpose of my visit, I replied that I was here to take up a position as Musical Theater Correspondent of the London Independent. 'That's a job?' he said. Thanks to Tom, it was.''

No mention of Canada, but more to the point, Mark Steyn doesn't say that this riveting account appears not in the actual text of his book but in

the acknowledgments section (which I feel no remorse at having skipped). This is either carelessness or disingenuousness on his part, and not unrelated to the frequent inaccuracies and failures of tone that compromise his book's real virtues of perception and styl

By drummasterCB@g… (not verified) on 02 Oct 2007 #permalink

Rhetorical tricks that JC holds in common with dodgy liberals that he hates:

1) he loves ambulance chasing lawyers: in JC's version of an unregulated market, whenever anything goes wrong we just sue - using the ambulance chasing lawyers much loved of the left

2) Excessive desire to socialise costs: JC thinks that we should all pay for his unregulated market through increased insurance premiums. Why should everyone in Sydney pay increased home insurance because JC wants to slap a nuclear power plant on the coast?

3) The Marxist defense: JC claims that even though every example of a type of revolution privatisation has gone wrong, this is because they didn't follow proper marxist libertarian principles - the next one will work though.

4) Love of centralised power: instead of a mixed market of diverse solutions to the problem, JC immediately jumps on the bandwagon in favour of the biggest, most centralised schemes he can think of (nuclear power, desalination, dams). It's as if he wants all of our local and community systems to be forced under the control of big business

5) Faith in the essential goodness of humankind: JC wants a completely unfettered free market in which businesses will be forcibly unbundled against their own best interests. How long will they stay unbundled in an unfettered market? As long as the essential goodness of their CEOs holds out...

6) Faith in the Soviet system: the only unregulated nuclear industry in the world was the Soviet system, which had no safety standards and no unions. It's a little known fact but Chernobyl is not the only or necessarily even the largest environmental catastrophe caused by that industry.

7) Love of trendy products against his own best interests: the only currently totally free market in water provision in the world is bottled water, which has been shown repeatedly in quality tests to be of lower quality than govt run town water in first world countries, even though it is provided at much higher prices. It even fails taste tests against tap water in most cases, and isn't always drawn in an environmentally friendly manner. But hey! It's trendy.

8) False idolisation of unreconstructed marxists: JC claims Australia's most libertarian prime minister was Bob Hawke, who was responsible for the accord, i.e. centralised wage fixing in exchange for increased govt spending on social security.

Have I missed anything? JC certainly sounds more like an old-fashioned US do-gooding "liberal" than anyone else on this blog...

A person claiming knowledge of economics brings up the Coase theorem. But unfortunately for free-market ideologists, the Coase theorem doesn't support the privatization of anything. It does not argue that privatizing reduces costs. In fact, quite the reverse: the Coase theorem implies that if there are any transactions costs, any at all, a non-market institution might do the trick better -- and you would have to study and find out, in each case. Indeed, privatizing water will increase some transaction costs, not decrease them. Far more friction, not less.

The resource reallocation would be more "efficient" by the restricted definition, but whether or not that would be desirable, since income distribution then also becomes a determining factor, is an entirely separate theoretical and ethical question... On the pure ethics of it, most people worldwide reject water privatization, pretty much on the spot, and that pretty much decides the issue.

Also -- Nuclear power exists in the United States by an enormous government fiat. It is called the Price-Anderson Nuclear Industries Indemnity Act, look it up in Wikipedia, and it protects the industry against insurance liability claims over $10 billion. Try to finance a nuclear industry without government distortion!

What is most remarkable to me about Mark Steyn is not his misinformation and foolishness -- there is plenty enough of that to go around -- but the fact that he is upheld by smart U.S. conservatives as being one of the best columnists. This is just baffling. It is truly an ideological movement on its last legs.

If it's ok with you, Jc, I'll respond to your post but skip over presenting a rebuttal to the arguments you presented against your own arguments, which I was quoting:

Brian says:

"Are you actually suggesting that streets should have multiple sets of water mains in them? Do you honestly think that alternate providers would start digging roads up to install competing water mains if they were allowed to?

No we can't do that in existing cities as it is too late. However we can make the catchment business more of a cosntestable market and regulate the pipes business. This does increases competition.

I see. So when you said that the UK "went about privatization the wrong way", what you meant is that they stupidly failed to move the whole country somewhere else?

Here's the problem: land is actually a very limited resource in some places (like, say, the UK). You can't fix the leaky distribution system by adding more catchment when there's no more room to put them. The problem is the distribution system leaks, and you can't make up for that by adding more water supply. There just isn't any more to be had.

In any case, I think you're missing the point. Absent regulation, the water runs out sometimes because that is the most economic solution for the providers. It doesn't matter how much a particular individual wants to pay a supplier if there is no water being provided to that region. Is that really what you want?

If it runs out it runs out and we're all dead, we have to move or we desal. However it does rain still don't forget.

Oh, well that's alright then. Good job you're here to provide commonsense solutions. Where are you going to capture the rain when there's no more room for reservoirs or energy for desalination plants?

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price.

It's not the market price. it is the government mandated price. Most likely it is too cheap in places where it ought to be more expensive and too expensive in places where it ought to be cheaper. We don't know. The present system is the difficulty the Soviets and the facsits found in price discovery.

I'll just step aside while you argue with yourself here...

This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

You don't know that until you allow the market to set the price in a constestable market.

And again...

So the solution is for the price to go up to the point at which a segment of the population can no longer afford to buy water?

You're food supply is supplied by the private market. do you think the government could supply it cheaper. If you do then the Sovs could have learned a thing or two from you.

Where did you see me suggesting that private markets don't operate for food supply? There are different constraints and solutions for one don't necessarily apply to the other.

Are you capable of understanding that somebody who doesn't think that a free market is the best solution in the specific case of water supply isn't necessarily a communist?

You see, I like markets. I think they're great, very powerful tools which in the vast majority case provide great benefits. However, the really cool thing about recognizing the existence of tools besides hammers is that you don't necessarily have to treat every problem like it's a nail.

You're just assuming, of course, that it is possible to create an actual market for water.

I am not assuming it. I know you can.

Show me one that functions. I've shown you one that doesn't, and you haven't explained how it can be fixed within the constraints that actually exist.

For numerous practical reasons, as already described, there isn't a way of doing that.

I don't agree. Sorry.

Then go ahead and show me how within the actual constraints.

You are beginning to see a lot of movement from private firms in this area around the world as the capital costs of supplying water are beyond the scope of government budgets and the returns are quite good.... about 20% per year compounded for the last 5 years.

And if there are situations in which that is actually true, I have no problem with it. However, you can't simply extrapolate from that and say that it must work everywhere, period. It doesn't.

By Brain Hertz (not verified) on 02 Oct 2007 #permalink

Great con job, SG. Let's get to the juicy bits shall we? But beofre we do let me say you have no idea what you are talking about. It's like putting a bunch of sentences together and hoping that they flow at random. Here's why:

1) he loves ambulance chasing lawyers: in JC's version of an unregulated market, whenever anything goes wrong we just sue - using the ambulance chasing lawyers much loved of the left

Don't be a dope. Enforcement and clarity of property rights doesn't have to be anything like what you portray. It's dopey, shallow thinking.

2) Excessive desire to socialise costs: JC thinks that we should all pay for his unregulated market through increased insurance premiums. Why should everyone in Sydney pay increased home insurance because JC wants to slap a nuclear power plant on the coast?
Would that happen? Do you have evidence that home insurance costs would rise if a nuke plant was built 100 miles away from a population centre. You're talking crap.

3) The Marxist defense: JC claims that even though every example of a type of revolution privatisation has gone wrong, this is because they didn't follow proper marxist libertarian principles - the next one will work though.

They did make mistakes doofus which is why some countries are beginning to unbundle their Telcos. Our dailies are talking about that possibility in today's issue.
4) Love of centralised power: instead of a mixed market of diverse solutions to the problem, JC immediately jumps on the bandwagon in favour of the biggest, most centralised schemes he can think of (nuclear power, desalination, dams). It's as if he wants all of our local and community systems to be forced under the control of big business

In an earlier point you were suggesting I was too decentralized and now you're inferring I prefer the opposite. Was the movie Memento based on you? You can't seem to even recall what you wrote a few minutes before.
5) Faith in the essential goodness of humankind: JC wants a completely unfettered free market in which businesses will be forcibly unbundled against their own best interests. How long will they stay unbundled in an unfettered market? As long as the essential goodness of their CEOs holds out.

Oh we're back to unfettered decentralized markets now. At least you're consistent in you shoddy intellectual inconsistency. I'm am not suggesting we do anything forcibly, Doofus. I outlined the reasons why we have failed in previous privatisations.
6) Faith in the Soviet system: the only unregulated nuclear industry in the world was the Soviet system, which had no safety standards and no unions. It's a little known fact but Chernobyl is not the only or necessarily even the largest environmental catastrophe caused by that industry.

Now I know you have lost it. The soviet system was a failure because the system didn't allow for freedom and clearer property rights. Nuke has been the safest mode of power generation in the west. Placing the Russian disaster into the mix is fraudulent joke.
7) Love of trendy products against his own best interests: the only currently totally free market in water provision in the world is bottled water, which has been shown repeatedly in quality tests to be of lower quality than govt run town water in first world countries, even though it is provided at much higher prices. It even fails taste tests against tap water in most cases, and isn't always drawn in an environmentally friendly manner. But hey! It's trendy.
Bottled water is not the only example of a free market in water. It's a different product in most ways. Moreover there are numerous examples of the private market beginning to supply town water around the world. In fact I am invested in a fund which for the past 5 has been getting a 20% return in this business.
8) False idolisation of unreconstructed marxists: JC claims Australia's most libertarian prime minister was Bob Hawke, who was responsible for the accord, i.e. centralised wage fixing in exchange for increased govt spending on social security.

Yes. The accord was pretty bad. But he also did a lot of good in terms of being a reformist government. You think Fraser was more reformist? Do you?
Have I missed anything? JC certainly sounds more like an old-fashioned US do-gooding "liberal" than anyone else on this blog. .

I don't you have missed anything. Blogs are good because it exposes stupid ideas like yours. But it coming, chipper as I'm counting on giving your opinions a hiding every time you show up.

Keep emarrassing yourself, SG. It's fun.

Brian

Ther is nothing i said that is contradictory. You're playing dumb like SG. At least I thing you only pretend.

The food supply example is very good at destroying myths about the need for "POIBLIC" goods. There is no need for public servants to be supplying anything other than a pink slip when they fire themsleves.

Lee

You lifted that crap about Coase out of Wiki. You obviously don't understand it. I would suggest you stop pretending you do. Now go read a few books on the subject before you go around casting judgement.

Gee. Now that would be challenging.

Might you want to elaborate on this startling claim?. Go on hit us with more.

But unfortunately for free-market ideologists, the Coase theorem doesn't support the privatization of anything. It does not argue that privatizing reduces costs. In fact, quite the reverse: the Coase theorem implies that if there are any transactions costs, any at all, a non-market institution might do the trick better -- and you would have to study and find out, in each case. Indeed, privatizing water will increase some transaction costs, not decrease them. Far more friction, not less.

If you read Coase and reached that conclusion, you're hysterically wrong. Go back and read it again, lee.

It is useful to read Coase on Coase's theorem, something JB has not done. It is obviously an argument for pollution taxation.

In an ideal economic system, goods worth more than they cost to produce get produced, goods worth less than they cost to produce do not; this is part of what economists mean by economic efficiency. In a perfectly competitive private property system, producers pay the value of the inputs they use when they buy them from their owners (wages to workers in exchange for their labor, rent to land owners for the use of their land, etc.) and receive the value of what they produce when they sell it. If a good is worth more than it costs to produce, the producer receives more than he pays and makes a profit; if the good is worth less than it costs to produce he takes a loss. So goods that should be produced are and goods that should not be produced are not.

This only works if producers must pay all of the costs associated with production. Suppose that is not the case. Suppose, for example, that a steel producer, in addition to using iron ore, coal, etc., also "uses" clean air. In the process of producing a ton of steel he puts ten pounds of sulfur dioxide into the air, imposing (say) $100 worth of bad smells, sore throats, and corrosion on people down wind. Since he does not pay for that cost, he does not include it in his profit and loss calculations. As long as the price he sells his steel for at least covers his costs it is worth making steel. The result is inefficient: Some goods may be produced even though their cost, including the resulting pollution, is greater than their value.

It is inefficient in another respect as well. The steel producer may be able to reduce the amount of pollution by various control devices--air filters, low sulfur coal, high smokestacks--at a cost. Calculated in terms of the net effect on everyone concerned, it is worth eliminating pollution as long as the cost is less than the pollution damage prevented--in our example, as long as it costs less than $10 to prevent a pound of sulfur dioxide emission. But the steel producer, in figuring out how to maximize his profit, includes in his calculations only the costs he must pay. So long as he does not bear the cost of the pollution, he has no incentive to prevent it. So the fact that air pollution is an external cost results in both an ineffiently high level of steel production (it may be produced even when it is not worth producing) and an inefficiently low level of pollution control.

There are two obvious solutions. One is direct regulation--the government tells the steel company how much it is allowed to pollute. The other is emission fees--referred to by economists as Pigouvian taxes (named after A. C. Pigou, the economist whose ideas I am describing).

Under a system of Pigouvian taxes, the government charges the steel company for the damage done by its pollution--$10 per pound in this example. By doing so it converts the external cost into an internal cost--internalizes the externality. In deciding how much steel to produce and what price to sell it at, the company will now include the cost of its pollution--paid as an emission fee--along with other costs. In deciding how much pollution control equipment to buy, the company balances the cost of control against its benefits, and buys the optimal amount. So a system of emission fees can produce both an efficient amount of steel and an efficient amount of pollution control.

In order to achieve that result, the government imposing the fees must be able to measure the cost imposed by pollution. But, unlike direct regulation, the use of emission fees does not require the government to measure the cost of preventing pollution--whether by installing air filters or by producing less steel. That will be done by the steel company, acting in its own interest.

For God's sake Eli, it is not case FOR pollution taxation. It is a case for recognizing externalities and figuring a way for making compensation work and strengthening property rights. You see that's the trouble you go to Wiki and you end up with the hard fought opinion of a 15-year communist from Singapore with his or her take on issues.

Here's a thought Professor Mergatroid. Get off your lazy butt, walk down to the Economics/business building of the uni or college you're at and ask for Coase's books and collection of writings.

Don't be scared when you enter the business building ok. You don't have to wear a disguise in case the soft sciences crowd sees you (the horror). Rest assured the people in there won't eat you for breakfast thinking your raw meat.

Go on, Eli, make that the most important thing you today. I dare ya.

Eli,

Seriously, I reckon you could be at the dentist's reading the recent issue of People mag's latest on Paris Hilton's exploits and you'd think there was something hidden in the story about AGW.

Listen dude, Thomas Shelling (I think it was him) won a nobel prize for his work on game theory and externalities. I suggest you read up on his work before you go spouting off about AGW taxes.

Jc, your accounting of Rockefeller's fortune and advocacy of the consumer is novel, but also off topic and I can't let a troll like you off the hook so easily. You did catch the word 'network' in the sentence you cited, correct? And you do realize that the refining business is not a network, right?... On second thought, don't answer that, I'll be embarrassed for you.

I was of course referring to his collusion with the rail monopolies, one of many examples that would lead a man with even a smidgeon of gray matter to the conclusion that water distribution will never be a competitive industry. Rail is a network, btw.

The way you shout your ignorance from a mountain top is astounding Jc, even allowing for the fact that it only manages to defile a pseudonym.

By Majorajam (not verified) on 03 Oct 2007 #permalink

Major says:
"You did catch the word 'network' in the sentence you cited, correct? And you do realize that the refining business is not a network, right?... On second thought, don't answer that, I'll be embarrassed for you."

Major, i am actually quite embarrassed for you. I read my missive and one thing I noticed where I erred was the spelling of pray.

I ignored your network nonsense and decided the best thing to go after was the silliness you spouted about Rockefeller that needed to be corrected.

You simply have no idea about the difference between monopolies (which can only be state sanctioned) and contestable markets do you? It's astonishing really.

You mean that you were right and Rockefeller was wrong? Indeed, that is silliness. Of course, some people might have judged that as irony, but then they likewise would probably fall into a different constituency than yourself, people with a functioning cortex.

Speaking of embarrassing, this word you keep using, I do not think it means what you think it means. Is it your position that rail or water distribution are contestable markets? If you don't know, not to worry, I'm sure there's some more jargon out there just waiting for you to abuse.

By Majorajam (not verified) on 03 Oct 2007 #permalink

Major

Read what i said carefully.

I suggested unbundling these two markets could make them more competitive and contestable. You can comprehend that, can't you?

"You mean that you were right and Rockefeller was wrong?"

No, I never said anything about Rockefeller being wrong. I said you wrong and wrong about Rockefeller. Your comprehension skills are apalling.

Lee.

Sorry buddy, but I ani't doing your homework for you. Read up on him yourself.

Here's a clue. He doesn't advocate socialism as you implied. Go from there.

Jc, you're thick. You said you only felt compelled to respond to something I'd said about Rockefeller. Silliness I think you called it. Since the only thing I'd said about Rockefeller to that point was that he was wrong and you were right, I agreed with your assessment that such was a very silly comment, (while also noting that those with a few synapses to rub together would likely conclude that the statement was ironic. Understanding of course this group doesn't include you).

So to translate from Jc ease, which indeed requires a careful reading, you think that water distribution can be contestable if it is unbundled from supply. Fair summary? As I'm sure you're aware, to be a contestable market, there must be low barriers to entry and exit to potential players. So it's your position then that laying down hundreds of miles of pipe with no salvage value, not to mention building pumping stations and other infrastructure, to sell a commodity with extremely low variable cost- your view is that this constitutes a low barrier to entry and exit. Did I mention you were thick? Probably not emphatically enough.

By Majorajam (not verified) on 03 Oct 2007 #permalink

Ther is nothing i said that is contradictory. You're playing dumb like SG. At least I thing you only pretend.

I didn't say you contradicted yourself. I said you argued with yourself. As in, your own actual words. You wrote the words in #60, I quoted them in my post #69, and then you quoted my post #69 in #73 and reflexively argued every paragraph, including the ones that were actually yours.

By Brain Hertz (not verified) on 03 Oct 2007 #permalink

"Jc, you're thick"

Fair enough.. But let's see if you point has merit shall we?

"You said you only felt compelled to respond to something I'd said about Rockefeller. Silliness I think you called it."

That's correct it did call it silly because it was. I would include pig ignorant as well.

"Since the only thing I'd said about Rockefeller to that point was that he was wrong and you were right,"

Well no you also made him out to be a monopolist, which by definition is wrong. Your last comment about the Rock was a sarcastic swipe as I read it and I replied.

I must confess to you that the entire first paragraph of your last comment is a tangled mess of pure swill that I couldn't begin undo even after the 3rd reading. I gave up after that. Dude, English is a great language that provides for excellent clarity. Use those advantages whenever possible.

"So to translate from Jc ease, which indeed requires a careful reading, you think that water distribution can be contestable if it is unbundled from supply. Fair summary?

Yep. Only point that I would make is that it doesn't need careful reading. I was pretty clear on that so I'm concluding you have interpretation issues with language.

"As I'm sure you're aware, to be a contestable market, there must be low barriers to entry and exit to potential players"

Define exactly what you mean here. Do you mean low barriers in terms of regulatory requirements, capital requirements and expertise? What exactly?

"So it's your position then that laying down hundreds of miles of pipe with no salvage value, not to mention building pumping stations and other infrastructure, to sell a commodity with extremely low variable cost- your view is that this constitutes a low barrier to entry and exit."

No dumphy. I don't suggest and never suggested that we need to duplicate pipes and pumping stations etc. I was quite emphatic about that. I suggested that the distribution side should be stripped out of the catchment and treated as separate businesses. The barriers to entry are dependent on a host of things such as regulation and capital requirements. You may want to explain why it is difficult to privatize the water business simply because it has a low variable cost. I would be very interested in seeing this unique line of argument.

"Did I mention you were thick? Probably not emphatically enough."

You have. But at this point in time, I would say the shoe is on the other foot. In his case yours, Major. Good luck tying the shoelaces. If you need help just holler, ok as I'm always here to help. You know that.

Lee:

I'm not bluffing.

But I am getting upset with you that you haven't started your reading assigment yet.

Actually, let's see what David Friedman proposes as a Coasian free-market solution to the problem of pollution ( http://www.daviddfriedman.com/Academic/Coase_World.html ):

"Suppose that, in the [air] pollution case discussed earlier, damages from pollution are easy to measure and the number of people downwind is large. In that case, the efficient rule is probably to give downwind landowners a right to collect damages from the pollutor, but not a right to forbid him from polluting. Giving the right to the landowners avoids the public good problem that we would face if the landowners (in the case where pollution is inefficient) had to raise the money to pay the steel mill not to pollute. Giving them a right to damages rather than giving each landowner the right to an injunction forbidding the steel mill from polluting avoids the holdout problem that the mill would face (in the case where pollution is efficient) in buying permission from all of the landowners."

Except for the tiny fact that, you know, in the real world it IS very hard to measure the damages done to any individual person by pollution -- which means that juries or judges deciding just how MUCH in the way of "damages" those individual people are entitled to are going to be totally in the dark. To say nothing of the cost and length of all those individual civil court cases, each one requiring its very own own damage estimator... Which means, of course, that in any case involving pollution of the environment of any large number of people, the most efficient Coasian solution is obviously -- ta da! -- for those "damages" to be estimated as a sum total by a single board of government estimators, and collected from the polluter as a sum total in the form of either a pollution tax or a regulation placing some limit on the total amount of pollution allowed. Which, in turn, really ought to be obvious to anyone who isn't a congenital idiot.

By Bruce Moomaw (not verified) on 03 Oct 2007 #permalink

Brian

I'm not arguing with myself.

I may have missed quotation marks or inadvertly joined things together using HTML to highlight quotes.

Very sorry for the confusion. I don't edit and I should. i'm bone lazy and that's my good point.

I agree with Friedman. He very good with everything he writes.

Let me warn you though, trying to glue that argument with what Eli was inferring is laughable at this point.. Eli would want a tax from personal preferences stand point notwithstanding damages. In other words he hardly had Friedman's argument in mind.

That is unless Eli states that he agrees with Friedman and has an understanding of issues such property rights and supports these rights at the individual level in the same exact way Friedman does (and I do).

If he does that then it's a different kettle of whales, as I would have to look at Professor Eli in an entirely new light and confer on him all the privileges that go with being a libertarian.

Eli, are you ready top join the dark side?

Jc, your wit is the envy only of your intellect. Allow me to consolidate our back and forth:

Me: "Is it your position that rail or water distribution are contestable markets?"

Dimwit: "I suggested unbundling these two markets could make them more competitive and contestable."

Me: "you think that water distribution can be contestable if it is unbundled from supply."

Dimwit: "Yep."

Me: "So it's your position then that laying down hundreds of miles of pipe with no salvage value, not to mention building pumping stations and other infrastructure, to sell a commodity with extremely low variable cost- your view is that this constitutes a low barrier to entry and exit."

Dimwit: "I don't suggest and never suggested that we need to duplicate pipes and pumping stations etc."

Then that your position is it is possible to distribute water without pipes and pumping stations, as would be required to have more than one player in the market, i.e. for there to be a competitive or contestable market. It is difficult to know how to respond to this stunningly obtuse assertion, so I think I'll just move on.

Me: "As I'm sure you're aware, to be a contestable market, there must be low barriers to entry and exit to potential players"

Dimwit: "Define exactly what you mean here."

This is as elementary a concept as exists in undergraduate economics therefore I should be very unsurprised you have no idea what it is. Barriers to entry or exit are start-up costs associated with bringing a product to market- they can take any form that costs can take. My I am in a charitable mood this morning! But then, what else could possibly justify conversance with so feeble a mind.

Dimwit: "The barriers to entry are dependent on a host of things such as regulation and capital requirements."

Capital requirements? Did you mean to say that we can privatize the banking industry?

Dimwit: "You may want to explain why it is difficult to privatize the water business simply because it has a low variable cost. I would be very interested in seeing this unique line of argument."

Unique is your blend of ignorance and bellicosity. This is just simple economics. In particular, stating that entry costs or capital intensively is high is a relative not an absolute concept. Relative to what you stutter? To the cost base as a whole, hence the importance of the variable cost contribution. In water distribution, the cost structure is so disproportionately tilted toward fixed entry costs that, as I said originally, even the most fanatical privatizers would not venture into this territory. That falls to the uninformed and dull variety of ideologues like yourself. Here endeth the lesson.

By Majorajam (not verified) on 03 Oct 2007 #permalink

Jc, forgot to mention, I'd alluded only to Rockefeller's understanding of the power of the rail monopoly- rail is a network, remember?- as contrasted with your lack thereof. That you've constructed a whole separate narrative replete with your riding to his rescue is symptomatic of your specially-abled cognitive faculties. That and your exemplary trolling skills. Can't wait to see the latest and greatest.

By Majorajam (not verified) on 03 Oct 2007 #permalink

I call an intermission.

Popcorn! Ices! Cold drinks!
Come and get yer refreshments here!
Popcorn! Ices! Cold drinks!
Those little tubs of raspberry ripple, with the wooden spoon stuck to the lid!
Popcorn! Ices!
Kia-Ora!

OK, intermission over, back to the main event.

By Nick Barnes (not verified) on 03 Oct 2007 #permalink

Jc does NEVER make a real point. he repeats some economic theories, writes a lot of evasive stuff and thinks he is very clever while we are ratehr stupid.

instead of simply applying the Coase theorem to drinking water, nuclear power or whatever and making a claer point ONCE it is always the same evasive nonsense.

nothing of what he says makes any sense. he implied under this topic, that if we were paying deregulating trinking water, private contractors would be building offshore nuclear plants to provide it.
his rumblings about unbundling wtaer pipes and water doesn t make the slightest sense as well.

You undundle the rails , Sod and let the market compete for slots at the stations.

that is pretty exactly what happens in the UK.

Sod, I know this shit, ok. There is nothing this area of the universe you know that i don't know more of. So settle down and get used to it. Socialism doesn't work. It never has and never will. Keep repeating that to yourself.

sorry Jc, but you obviously know very little. about water puipes for example. or the UK rail. your original claim was, that "deregulation would make things more efficient AND benefit the environment"
you completely failed to back that one up so far.

the private UK rail for exmaple provides very good connections between certain centers at certain times. IF you are stuck with the rail ONLY (that was the point i made) you lost big times.

I am not pretending that some of the early privatizations weren't badly handled. However that doesn't mean future priavtizations should be also. WQe learn from mistakes.

again, that is NOT what you said in the beginning!
dergeulation should always help! where is your big market theory, handling these exceptions taht you bring up constantly?

Sod, don't be harsh. If you can relax the assumption that pipes and pumping stations are required to distribute water, then you have to accept Jc's assertion that the market would be competitive if we just got government off its back. Seems reasonable enough. Also, if you redefine monopoly to mean whatever Jc wants it to mean, then it is only possible for one to exist if the government says it exists. Are you getting the hang of this yet? It's how I learned to stop worrying and love inane assertions that resemble fatuous arguments spouted by ideological simpletons.

By Majorajam (not verified) on 03 Oct 2007 #permalink

First: what I clearly said in the second paragraph of my last entry is that -- if Friedman really thinks that it could be better to deal with pollution by allowing thousands (or millions) of anti-pollution civil suits by individuals than to deal with by imposing a pollution tax or anti-pollution regulations -- he's a congenital idiot. And since he DOES seem to believe that, and Jc seems to agree with him -- well, the conclusion will be left as a logical exercise for the reader.

Second: we of California have already been exposed to the consequences of unwisely privatizing the distribution of electricity -- namely, that (just as Krugman the Dread predicted) the distributors started deliberately arranging blockages in crucial nodes during periods of peak demand to make the cost temporarily shoot through the roof. Need one point out that the same thing could be done by private controllers of water distribution -- unless, perhaps, we sign only contracts with them requiring a fixed price over long periods (as California should have done with the electricity distributors)? And will even that be enough to deal properly with the problem?

By BruceMoomaw (not verified) on 03 Oct 2007 #permalink

Bruce, the solution to the California energy crisis is more lease handouts for private drilling on public land. Didn't you know? I remember the Bush administrations pronouncements to this effect at the time- we should pass the Cheney taskforce, (anonymity assured by executive privilege), energy legislation, i.e. petrochemical welfare package, because power producers and traders were manipulating the market. Bush administration rhetoric is so cynically devoid of logic it boggles the mind. Was it always this bad? Ever?

Be that as it may, electricity distribution was never privatized in California and I'm not entirely convinced that power generation cannot be. 'Net metering' is clearly a good idea if you want to instill incentives for renewables, in particular solar.

Properly deregulating though would require that end user prices also be deregulated, and that mechanisms be put in place to allow consumers to hedge price risk, just as other commodity consumers can hedge price risk in the futures market, all of which may be a bridge too far. As it is, deregulating production without linking power costs to revenues and maintaining a moratorium on power plant construction was just about the worst combination of policy that California could've come up with had they been out to screw over their citizenry. It didn't hurt Enron any though.

By Majorajam (not verified) on 03 Oct 2007 #permalink

I'm not arguing with myself.

I may have missed quotation marks or inadvertly joined things together using HTML to highlight quotes.

Very sorry for the confusion. I don't edit and I should. i'm bone lazy and that's my good point.

Bollocks, Jc. You split up one of your own paragraphs (that I had quoted to respond to) in order to interject a rebuttal to your own first sentence. And then went on to add a rebuttal to your second sentence as well. Not a "formatting error".

By Brain Hertz (not verified) on 03 Oct 2007 #permalink

Eli, if you mean the very long quote you give in comment #92, I don't think that it is Coase on Coase. It appears to be a quote from an essay by David D. Friedman explaining the argument - predating Coase - for Pigouvian taxes. See here.

Friedman then goes on to explain Coase's ideas quite well (although be sure to wear your Friedman-filter spectacles). Coase explains that a rigorous system of property rights (sigh) can allow the market to regulate externalities without the need for Pigouvian taxes, and in fact generating more efficient solutions. If the polluter isn't allowed by the system to pollute, he'll either ameliorate the pollution, or buy the right to pollute from the victims. This freedom to decide allows the system to find a more efficient solution.
This is the naive libertarian take on Coase. Of course it is naive nonsense. Experience teaches that often in fact the polluter will pollute away merrily, and when the victims (or the families of the dead victims) finally sue, the polluter will lie and steal and cheat and bribe and kill and, when all else fails, skip out from under the limited liability umbrella and whistle all the way to the bank (and to a cushy job with the government's environmental protection agency).

There's more to Coase than this. He explains that the key reason why market solutions don't actually do the right thing is the transaction costs. This is broadly correct, as far as it goes: I don't sue every motorist in Manchester for the effects of their pollution on my lungs because the transaction costs (time, money, effort, life) would be too great. If the transaction costs were zero: if (say) I could set my own price for putting soot particles on my windows, and collect that price without any effort, then maybe I would do so (Of course, I might set the price arbitrarily high). So Coase is ultimately an argument for reduced transaction costs, as a means to allow markets to efficiently account for externalities. A great way of reducing transaction costs is to elect governments which introduce Pigouvian taxes and other costs (e.g. corporate manslaughter laws) which make polluters take account of externalities without every victim having to incur individual transaction costs. That is, Coase can be used to argue for regulation as well as against it.

The relevance of this to water privatization I leave as an exercise to the reader.

I still have a couple of these raspberry ripples left, and a bag of dry roast peanuts. I think the peanuts got dropped on the floor though. Do you still want them?

By Nick Barnes (not verified) on 03 Oct 2007 #permalink

The blow-by-blow between Jc and Brain Hertz:

In comment #60, Jc said this:

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price. This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

Then in comment #69, Brain Hertz replied:

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price. This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

So the solution is for the price to go up to the point at which a segment of the population can no longer afford to buy water?

And then, in comment #73, Jc replied, arguing against himself:

You're prestenting an issue here that has to be matched against the inability of the government to supply water at the market price.

It's not the market price. it is the government mandated price. Most likely it is too cheap in places where it ought to be more expensive and too expensive in places where it ought to be cheaper. We don't know. The present system is the difficulty the Soviets and the facsits found in price discovery.

This usually means it is quite possibily underpriced and the wastage is much larger thatn a few burst pipes.

You don't know that until you allow the market to set the price in a constestable market.

Thus all the words, and non-words ("prestenting", "facsits", "constestable", "thatn"), in this part of comment #73 are Jc's, whether or not quoted in the rarely-seen all bold style. I recommend he, or both of him, return to the Pierian spring.

By Nick Barnes (not verified) on 03 Oct 2007 #permalink

"As it is, deregulating production without linking power costs to revenues and maintaining a moratorium on power plant construction was just about the worst combination of policy that California could've come up with had they been out to screw over their citizenry. It didn't hurt Enron any though."

Majorajam, they DID set out to screw the citizenry it was very well planned. The dereg bill was largely written by Enron and PGE. PGE, despite the PR, did quite well. They split themselves into two businesses, one for generation and one for transmission. In doing so, they transferred nearly all revenues to the generation company, and nearly all costs and debts to the transmission branch. If you consider the two divisions as one, they set records for revenue and profits throughout the scam, but were able to declare bankruptcy in the cost-bearing transmission company, and shed costs and debt to further drive up their overall profits.

This was all explicitly described by the SF Bay Guardian nearly two years before the summer where the dereg blew up. They exactly predicted what happened, and why, and got it right. Just for JC - the Guardian is a socialist weekly paper, and the ONLY news source that got it right.

BTW, there was no moratorium on new construction. Up until a few years before deregulation, projections were for a long-term generating surplus, as we in California were decreasing per-capita demand at a wonderful rate. By the time those projections were starting to show a future market for electricity from new plants, about 5 years before dereg, the negotiations for dereg were ongoing, and no one wanted to build into a market where they didn't know the regulatory structure. Within a month or two after dereg was passed, new plants were approved, and at least one large new plant was well under construction before the manipulated shortages started hitting.

And they were manipulated shortages. The state kept a web page showing the status of electricity resources - I followed that page during that summer. We NEVER had a stage three alert, brownouts, or blackouts, unless at least 30% of our generating capacity was off line - more often, it was close to 40%. Electricity was being sold on hourly spot markets - I watched many hours where generating capacity was withdrawn for "mechanical problems" in the last 10 minutes before the spot auction, reducing supply and driving up prices, and then come back on line in the 10 minutes after the auction, creating more electricity to sell at the artificially high prices.

PGE was doing this with its generating division, making huge money, while its transmission company was "losing money' at the high prices, effectively transferring profits to the generating side while driving debt on the transmission side - which declared bankruptcy. I wish I could get away with that.

CBS News reprinted extensive actual phone transcripts of energy traders giggling and making obscene jokes about "screwing Grandma" by deliberately shutting down transmission stations to drive up the price -- after, that is, the state of Washington finally forced Bush's Justice Department to reulctantly give up those transcripts through the Freedom Of Information Act. (I'll track down the URLs later tonight for y'all. They make for utterly fascinating reading, I assure you.) Whether the water distribution system physically allows similar market manipulation I'm not sure, but I wouldn't be surprised.

I also see that Nick Barnes' third paragraph in Post #118 reiterates my (obvious) point as to why Friedman's apparent preference for millions of civil suits as an alternative to pollution taxes is, er, cretinous. (I must confess, however, that I'm still trying to figure out just how we got derailed onto this subject from Lambert's original totally unrelated point that Mark Steyn's column on Cate Blanchett is fact-free. Jc works in mysterious ways his deranged wonders to perform.)

By Bruce Moomaw (not verified) on 03 Oct 2007 #permalink

Let's deal with the easiest demolition first , shall we:

Professor Eli says:

"Amazing, you quote Coase on Coase to jc and he think you have taken a position. Face it jc is AS software."

Look Gasman, your knee jerk reaction was to assert that Coase therom deals with pollution tax. That's not the central element of Coase, Professor. Coase tries to explain how you deal with property rights effected by externalities. You behave exactly as my beagle did with food or the scent of a potential meal. He got himself killed chasing a scent.

Don't ever shout the word "tax" from across a busy street as it could cause Eli to get run over.

Now I ask again, Eli. Do you agree with Coase and if so does that mean you have now become a libertarian?

Bruce M

The california power deregulation was/is a case study on how NOT to deregulate. I would add another element to that sorry tale. Don't ever get Democrats to try their hand in deregulation as they will invariably fuck it up to no end. Gov Grey, who essentially lost his job on the issue through a recall was the stupidest Governor in the states history.

Nick

You're totllay confused and it shows. I think you're arguing against the computer. Frankly I have no idea what your talking about any more and I'm sure neither do you.

Sod

There is nothing in this tiny spot of the universe that you know that I don't know. I have forgotten more than you know.

You turned up here like a rooster- all feathered up and your now lying on the floor like a skinny plucked chicken. Put some clothes on. It's embarrassing for you.

Lee

"This was all explicitly described by the SF Bay Guardian nearly two years before the summer where the dereg blew up. They exactly predicted what happened, and why, and got it right. Just for JC - the Guardian is a socialist weekly paper, and the ONLY news source that got it right."

You mean a broken clock is right at times? I'm sure that over the decades of that sorry paper's existence it must got something right. Socialists are stupid people but they can also roll the dice and come up with a seven. big deal.

JC, California deregulated under Republican governor Pete Wilson. Wilson pushed it hard - at one point he threatened to veto any bill ever written by anyone who opposed the dereg.

Governor Gray Davis (not Governor Grey) was left holding the bag. He did some things wrong, but a critical hole was created by the Republicans in Washington, who refused to intervene to stop interstate gaming of the California grid by traders and generators.

Nice try, though.

jc, the Guardian didn't 'roll the dice.' They did a great job of journalism, economic analysis and political analysis.

I am far from a fan of socialism - Markets are essential, and require regulation to deal with externalities and with the tendency of wealth to accumulate unearned from generation to generation, and I believe moral societies provide a social safety net. I disagree with Guardian policy positions a lot. However, they are NOT stupid. They routinely do some of the best economic and political analysis to be found in the state of California - and your uninformed dismissal of that on the grounds that 'socialists are stupid people' just shows how utterly stupid you are, JC. Especially coming on the heals of your grandly pronounced falsehoods about the politics of the California deregulation.

Tell me why, again, anyone engages with this f'n clown?

Thank you in advance so I can return to reading Tim's stuff again.

Best,

D

Jc,
Nick is clearly not confused; you are. Just go back over his post (or mine, where I described it with post numbers).

By Brain Hertz (not verified) on 03 Oct 2007 #permalink

Coase described a pollution tax. jc, the AS machine shut down

Under a system of Pigouvian taxes, the government charges the steel company for the damage done by its pollution--$10 per pound in this example. By doing so it converts the external cost into an internal cost--internalizes the externality. In deciding how much steel to produce and what price to sell it at, the company will now include the cost of its pollution--paid as an emission fee--along with other costs. In deciding how much pollution control equipment to buy, the company balances the cost of control against its benefits, and buys the optimal amount. So a system of emission fees can produce both an efficient amount of steel and an efficient amount of pollution control.

In order to achieve that result, the government imposing the fees must be able to measure the cost imposed by pollution. But, unlike direct regulation, the use of emission fees does not require the government to measure the cost of preventing pollution--whether by installing air filters or by producing less steel. That will be done by the steel company, acting in its own interest.

Nick Barnes, exactly right.

Bruce Moomaw, in the link you gave, David Friedman writes that the condition in which "any agreement that is in the mutual benefit of the parties concerned gets made" defines "zero transaction costs." That is wrong, and an example of the persistent misunderstanding of Coase we also see here. Somehow people got it into their heads that Coase argued that privatization reduces costs. He didn't, because it is gibberish.

In fact he argued that market transactions may sometimes not be allocatively efficient, because there are ALWAYS transaction costs. In fact, he argued that's why business firms exist: he asked, why aren't all the transactions inside the firm run as market transactions too? Ans.: It would not be efficient.

Dano

As clowns go you'd take the the prize.

The only thing I've read from you is putting people down who you disagree with. I amusingly recall a discussion you had with someone calling themselves Per some while ago who put you back in your coffin for being the shallow doofus you are. Recall? It was a fun read.

Best

JC

Lee
You need to apologize for your original distortion of Coase. Friedman has it right. I do too. You never did and now you're back peddling at 50 miles per hour.

Let me repeat, Coase tries to explain how best to resolve such issues over property rights and externalities.

coase is closer to free market principles or at least free market believers can use Coase effectively. Socialists can't by virtue of the fact that nearly all of you have no understanding of property rights and the few that do invariably screw it up.

Your argument would be the similar as suggesting Milt Friedman's support of taxation meant he supports all forms of taxation the socialists propose laving aside that he supported a flat rate of about 10%.

Learn this lesson and you're well on your way to learning something new today.

Lee

That's correct, Wilson was the governor who mangled it up along with the Democratic state house. Grey Davis then came along and made things worse which is why he was the frist governor ever recalled in California.

As usual the msrket gets a bad rap because public workers screw things up. Tll me again that want to contineu relying on these bozos to run your life.... or pertinently to run your water.

If that scocialist paper got it right, it was an accident.

However you may actually want to show me how they were "right" because quite frankly I don't believe it.. Got a link?

Eli

Keep digging. You might pop up through my floor any day now.

Jc, why don't you just state the Coase Theorem for us? It only takes less than twenty words. You are the one who brought it up, after all.

Or shall I add your this to your silent capitulation that nuclear power could never survive in a truly free market?

Jc, why don't you just state the Coase Theorem for us?

Dopey, there's reams about it on this thread. Do you actually think I don't know it? Please!

The Gasman copied it , Friedman alluded to it as I have. You're the only one to have got it wrong.

"Or shall I add your this to your silent capitulation that nuclear power could never survive in a truly free market?"

Of course nuke couldn't survive in a free market, because the free market would choose the cheapest option of producing power, which at this stage is from Coal etc. However Nuke is the best alternative after coal in price unless you think cow farts could produce more cheaply and in abundance. The Gasman could help you figuring all this out for you. We're still a long way off from solar being attractive but eventually we could get there.

I know.... You're going to bring up the cost of externalities and that we need to price emissions. This is where Coarse comes in and would suggest we apply a carbon tax to neutralize the cost of emissions. So nuke would be a terrific option as it is clean and efficient in terms of producing large-scale power. However strangle it with regulation and we're fucked.

The cost of nuke is the cost of capital and the cost of dealing with the regulatory issues. Nuke fuel only forms a small part of that. The cost of capital is what it is, however even this side will be effected by the most contentious cost which is the cost of maintaining within the regulatory bounds.

Here's what I want to know from you.

Do you think the cost of emissions ought to be priced at level where solar and it's second derviative-wind- become "economic" or do think we should price it at the level which would introduce nuke?

Come on, give it a shot.

The Coase Theorem has NOT been stated on this thread, so far as I know. There has been discussion ABOUT it, but it would appear that everybody is waiting for you to state it.

It's very easy to do. It's less than twenty words. You can even copy and paste it from somewhere.

AND -- you are not paying attention on nukes either! My question was, are you free market believers going to remove the $10 billion cap on liability insurance per U.S. nuke plant? Or does the U.S. government subsidy appeal to you here? Give it a shot.

Dopey, there's reams about it on this thread. Do you actually think I don't know it? Please!

The Gasman copied it , Friedman alluded to it as I have. You're the only one to have got it wrong.

Shorter Jc:

"I don't need to bother with facts. You just need to understand that I'm right."

By Brain Hertz (not verified) on 03 Oct 2007 #permalink

Lee asks a question however he hasn't answered mine yet. I'm still waiting.

Brian.

Thinks I'm short on facts. Brian almost every assertion I have made has been supported by facts.

(Another feathered up rooster lying on the floor looking like that other dead skinny plucked chicken.

All we need is Dano the other plucked rooster to offer his insightful missives (not).

You guys are so funny.

Lee;

I'll have the answer please.

Paging Peregrin Took: there is clearly a troll here that badly needs to be killed.

By bruce Moomaw (not verified) on 03 Oct 2007 #permalink

Coase theory helps people to figure ways in dealing with externalities when there competing interest derived from property rights.

It is not as you suggest a theory that movers us away from privatizations and private ownership.

That's why I have suggested from an early point in this long running thread that socialists cannot use Coase to help them. The prime reason is that socialists can't conceive or pay little regard to private property rights compared to those from the free market perspective.

That's why I have maintained that your use of Coase in your defense of socialist/statist practices and ideas is laughable in the extreme. In fact Coase has no relevance to socialism/statism when you think about it. The state is paramount in a socialist world so the state would decide the issue of externality while not much regard is afforded to ownership and the question of property rights.. That's a prime reason why statism has always failed in the end and why the environment in places like Eastern Europe was simply degraded dung heaps.

Therefore in a strict sense, you are correct in saying that Coase is not discussing free markets and the question of whether privatization off superior outcome to statism. He doesn't have to because it is almost axiomatic.

This is what I have trying to knock into you, lee. All through and you still don't quite get it.

Sod

There is nothing in this tiny spot of the universe that you know that I don't know. I have forgotten more than you know.

You turned up here like a rooster- all feathered up and your now lying on the floor like a skinny plucked chicken. Put some clothes on. It's embarrassing for you.

nice one. i note that you NEVER write anything of substance, but just some random rumblings and personal attacks.

http://scienceblogs.com/deltoid/2007/09/experiments_you_can_do_with_ma…

you reply WITH random rumblings, personal attacks and NO substance at all.

thanks for making my point.

but to comment on your latest rumblings:

i am rather sure that i know MORE about policy advice than you do!
i did study macro economics. my teacher was leading this part of the department and was at the time ADVICING our government on pretty much the things we are talking about.

so while i do not know ho much you forgot, i can surely tell you that you were WRONG about me!

Jc has failed to make any remark of substance on the topic. the reason is pretty obvious. drinking water seems to be a rather WEAK point of the COAS Theorem:

If the resources within a property are mobile. One example is groundwater, or the continental water basins, which move water under countless properties.

http://www.huppi.com/kangaroo/L-chicoase.htm

do not expect Jc to make any meaningful comment on the subject. he would immediately been proven wrong, and that wouldn t go well with his rather highish self perception...

Do you think the cost of emissions ought to be priced at level where solar and it's second derviative-wind- become "economic" or do think we should price it at the level which would introduce nuke?

easy one. solar will be enough.

That's why I have suggested from an early point in this long running thread that socialists cannot use Coase to help them.

YOU were the one who brought up the Coase theoreme:

http://tinyurl.com/3cp9zu

i did NOT use the Coase theoreme for anything. i think it is a very theoretic idea, with little use in real live and basically NONE AT ALL for the subjects that we are discussing.

The Coase theorem: Given well-defined property rights, low bargaining costs, perfect competition, perfect information and the absence of wealth and income effects, resources will be used efficiently and identically regardless of who owns them.

as basic logic will tell you: with NONE of those PREMISES fulfilled, no CONCLUSION can be drawn.

" easy one. solar will be enough." (is there a higher plain?)

figured out the cost/ benefit here Mr. Macromancer? If it's so easy you may wish to explain the us the figures you applied in figuring this was easy. in other words tell us the cost, the economic damage that would cause in dollars along with the comparison to the costs of not acting.

I'm asking this because even using Stern's scenario it would be more cost effective not to act.

See you on the other side of hell.

figured out the cost/ benefit here Mr. Macromancer? If it's so easy you may wish to explain the us the figures you applied in figuring this was easy. in other words tell us the cost, the economic damage that would cause in dollars along with the comparison to the costs of not acting.

no need to use any figures at all. instead i just take a look at your beloved Coase theoreme:

to replace everything with solar power, all that needs to be done is building a lot of solar panels.

on the other hand:
to replace everything with nuclear power, before you can even build a SINGLE plant, you will have to buy property rights from millions from the anti-nuclear power crowd worldwide. good luck.

Jc, for someone who has forgotten more than i ever knew, you are making rather weak claims.

Numbers please, Sod. No messing around here just the numbers in the raw. I wann see a CBA done even in primitive form.

If you can't give us the numbers then say so and all will forgiven but don't mess us around any longer.

Well jc, seems that you feel free to demand work from everyone else without paying for it. sod, I am sure, will be happy to provide the calculations at a businesslike rate and set up an account you can forward the money to.

Jc, I remain most interested in your business model for distributing water without pipes and pumping stations. I'm already lining up investors just waiting for you to share a slice of your prodigious acumen so I can go out and revolutionize the industry.

As an aside, it's pretty rich of you to be requesting any facts, let alone a CBA, when through plenty of characters blathered across this thread, you haven't penned a single one. Even after being asked. Also fyi Jc, between arguing with yourself, not arguing and generally acting like a ninny, no one here takes you seriously, least of all me, though I'll admit some guilty pleasure in toying around with you for a while. Ta ta, nnn ta ta.

By Majorajam (not verified) on 04 Oct 2007 #permalink

Bruce, at the time of the California energy crisis, not a single new power plant had been brought on-line in the state for 12 years. While there was never a moratorium on construction declared per se, the power of NIMBY politics in the state was de facto the same. Meanwhile demographic and economic growth in the tech boom 90's was legion, the latter circa 4% and the former especially when you take into account migration (both foreign born and the gold rush dot commer variety). This all meant that power consumption was increasing rapidly and that has all the makings of a problem. The bottom line is that California was not adequately supplied, as indicated by the extent it relied on out of state production and its low reserve ratio, (or the extent to which it threw caution to the wind on Diablo Canyon, which was operating flat out despite erstwhile concerns that it should be run at well below capacity). As it happened, power producers knew that power reserve was exceedingly low, especially in consideration of the poor transmission lines from out of state. They knew that the PG&E was mandated to keep the grid up no matter the cost, and so they manipulated the system. I don't think the methods and extent of the collusion has ever come out, although it appears at least Enron played a role in coordinating it. What is clear is that in such a situation as California was, over a barrel with its eyes closed, it takes very very little to get it done. It also doesn't help when you have speculators able to control the flow of the good they're speculating on.

I don't agree that the deregulation set out to end up the crisis five years hence, (a long term plan where conspiracies are concerned), although I allow it's possible. I think it's more probably that Wilson could only get deregulation through politically if the prices to the end user remained fixed. It should be noted as you have though that the crisis was mostly a result of manipulation, which was made possible by the rules governing PG&E's operation of the grid and governing power trading, and of course the fact that California's spare capacity was miniscule meaning one plant could affect prices dramatically by going offline. This means that you'd have to believe the deregulation's intent was to allow for manipulation, which IMO is a tough sell.

About PG&E, since the privatization didn't cover transmission, which is the one part they got right, PG&E of course would have to split into two different entities, the regulated and the unregulated. The holding company remained the same though, and it's fine if you don't want to buy that PG&E got burned by the crisis, but my mother was holding that stock at the time, and I can tell you that she wasn't profiting on the position. Quite the opposite. What's more, it makes sense from a corporate finance standpoint for a very low risk utility business to maintain financial leverage, rather than the power production business where revenue volatility can be huge (power is about the most volatile commodity on the planet, another element in the causation for the crisis). Whether the amount of leverage maintained on the transmission business was sound is another issue, but I can point to plenty of regulated utilities that carry far too much debt.

The bottom line is that you shouldn't get your news analysis from a socialist paper any more than you should Fox news. It may cover things that other outlets will miss, but it will also omit plenty that it shouldn't. IMHO.

By Majorajam (not verified) on 04 Oct 2007 #permalink

Sorry, Jc, questions are to be answered in order. There is a chain of logic upon which they occurred. It was instigated by you. First, state the Coase Theorem. Then you can explain properly why it has anything to do with privatization, for or against. No more secondhand gibberish, transcribed from other religious believers in free markets.

Next, explain why a libertarian wants to expand nuclear power's corporate welfare police state. That comes from way up the thread, too.

Then and only then, I'll give you the price point on solar.

Marion Delgado has it right. And it makes a fascinating study. Why is it that libertarians think they have the answers, and are always so ignorant of history and ecology? Every one of them. Just like the old Left. The one here characterized himself as a "free market believer." Maybe that's it: it is really "True Believer" stuff, right out of Eric Hoffer, and updated to apply to the Right. The certainty precedes the facts, and since there are so many facts, they are easily bent to the certainty. Try to pin down one concept for scrutiny: it is then avoided, and more nonsense is brought in, instead. While the argumentation continues to rely upon simple binary oppositions, the false simulacrum of rational discourse. For example, notice how the rest are characterized as socialists: absolute nonsense, of course, but the discourse is structured to need an easy enemy, a devil. Mark Steyn sometimes does almost the same thing.

Come on Eli, don't be like that. I gave Lee wanted he wanted , which was a 20 word summation of Coase's theory.

I helped you learn something new, didn't I? Look how you ran to greet to Coase.

Then look at the kids jumping around reading and talking about Coase like they just received a new toy for Xmas. It's a fun feeling making so many people happy.

On a serious note, Eli. Look I respect what you do for a living and I'm damned sure you know a great about the field you teach in. I wouldn't even try to learn the most basic stuff you teach. So there, I've offered you a decent complement.

I think though there is a need to marry up the science of AGW with the economics and try to figure out the neatest path. I'm a little worried that the science guys don't pay much attention to this critical area in their thinking.

And yes the market, particularly the free market guys have a great deal to offer.

Stern was a shambles by the way. He used 1/70 of the cost of capital that is normally applied to long-term estimates. Even with his figuring I can't quite see how we should move to any substantial action towards heavy-duty mitigation

Majorajam,

i don;t get my news form ANY one source. I was simply pointing out JC's stupidity in asserting that 'socialists are stupid people", in the context of seeign the Guardian repeatedly doign superb journalism. One has to read between the ideology, but that is true of any source.

Lack of plant construction was not due to NIMBYism. Most of teh 9well0-founded, IMO) NIMBY reactions were to emergency generating plants and peaking plants for specific entities, usually planned to be sited right next door to residential areas. Emergency diesel plants are hugely polluting. Lack fo construction was due to lack of demand early, and then regulatory uncertainty later.
California was not all that short of surplus capacity. Days of brownouts and blackouts were days with at least 30% of capacity off line. What happened is that the utilities found it profitable to shut off enough capacity to CREATE marginal reserve capacity, and then exploit that marginal reserve to drive up prices.

And JC actually has one good point - even s stopped clock... The dereg scam was caused by a combination of legislative stupidity/cupidity in CA, regulatory stupidity/cupidity in Washington, and market manipulation by industry. I don't use the "c" word much, but I'm willing to call this one a conspiracy.

But why JC assumes that deregulated markets would be any less subject to manipulation is beyond me. It happens all the time in unregulated markets.

Major

Lee asked me for a 20 word or less explanation of the coase theory which I supplied. Don't know what more I can offer him.

Credit where credit's due . That was a mighty good explanation of the california power crisis although I think you left out a few things that may be pertinent to the issue. you hit the nail on the head in that they had a fixed priced deal in state for the supply of power while the cost of producing it is quite variable. Therein lies the problem. It is also the main reason why the outside grid was never added to. Firms have a cost of capital to work with and varying typs of investment opportunities so you would expect rational thinking to lead to the conclusion that you go for the deals that offer the best upside. California didn't offer much of an updside with its fixd price so firms went elsewhere. It wasn't collusion.

Water.

You're asking me to offer you a plan to deregulate the water business around around the world. However you're omitting where all this came from. I made the reasonable at least what i consider reasonable point that the main reason we have a water problem in some parts of the west is that the command and control system is starting to list to the side. Again the same problems, NIMBYISM, lack of invesmtment and lack of price signal.

I know a little about the water story because I invested in a fund a few years back the focuses on the water business around the world. I arrive at the conclusion that this is a pretty decent investment opportunity because of the potentential growth prospects, the capital limitation prospects of governments because of budget constraints etc.

Its a great little earner. Last 4/5 of years I have been getting a return ranging from 15 to 30%. And it still looks like heading solidly north.

So you aksed me for my prospectus!!!! One of the big firms carries this fund as an open ended fund. Let me know if you ant the name of the firm and I'll be happy to supply it.

Sorry, Jc, you did not state the Coase Theorem. Although someone else has since stated a close approximation of it... Find it if you can! Or if you care -- it destroys your argument.

Nick Barnes, great stuff and thank you for that second link, which is very thoughtful. Although I think it mischaracterizes Coase a little, if not his "followers." He was a lightweight on ecological theory and the ethics proceeding from it, of course. But his main argument, (and he was explicit about it,) was concerned with describing the abstract world of economic theory with its zero transaction costs, not with making policy pronouncements like our libertarian friend here. Putting the "Nature of the Firm" and "Social Cost" together, Coase indicated the reconstruction of the entirely of economics, as he himself believes must happen. The subject gets divided into two equal halves: market transactions, and institutions. Institutions describe rules, and so create things like business firms, NGO's, and governments (Coase called government a sort of "superfirm.") Putting this new view together with our present circumstances, the question goes beyond Coase's examples, to how to manage the mounting social (and environmental) transactions costs of an ever more complex society, while preserving freedom. Markets don't do it necessarily. We are going to need a change in institutions. I think this is going to be very important in the near future.

Lee>

Socialism...and what libertarians see.

I don't speak for anyone except myself. I see socialism as statism. They are the same thing and the term is interchangeable in my book. Both big parties are statist although one party shows more signs of that disease while the other preaches free markets but doesn't go near it.

Yes, I see statism as the very essence of the law of best intentions being the yellow brick road to hell. There is very little the government can achieve other than the bear minimum that the market can't do better save policing, the courts and military for now. Everything else should be privatized.

But I accept privatization has its problems: not from the efficiency angle but from the execution side. It's very important to get that right.

Take Australia for example. Our largest telco was a government owned entity until very recently. Privatizing changed it a little but it didn't change things drastically. That's because the old monopoly was a government grown entity. It came out of the loins of the government jackal.
If we had a free market in telco since the introduction of the telephone that industry would look remarkably different to what it does now.

JC, private, non-regulated companies manipulate markets all the time. Regulation is a two-edges sword, but forgetting that much of our regulatory structure arose from attempts to fix market scamming in unregulated industries, is simply historical naivete, at best.

and yo skirted my point - it isn't that 'privatization; ahs problems, it is that unregulated business has problems, because there is always a potential individual interest in scamming the system for maximum personal gain.

Businesses can not exist without government institutions. Contract law is law. Judicial interpretation and remedy comes from government institutions - if they didn't exist from our state, businesses would have to institute them, and create their own government. We aren't arguing about whether there shoudl be government (or controlling institution) presense - we are arguying over how much is desireable, whether you see that or not.

There is no system immune to scamming and gaming. The libertarian fantasy is as flawed as any other - it is simply vulnerable to different kinds of gaming and different risks. Your kind of ideological adherence to the idea that a different system fixes everything, is simply 'magic bullet' wishful thinking.

I participate in an anarchist study group regularly, with some of teh biggest vices in modern anarchist thought in attendance. My favorite thing to do is show how the various flavors of anarchism - free market, primitivist, 'lifestyle' etc - are all subject to internal instabilities that lead to reinstitution of state governments or controlling institutions of some kind, usually on termsm not favorable to individual liberty.

"JC, private, non-regulated companies manipulate markets all the time. Regulation is a two-edges sword, but forgetting that much of our regulatory structure arose from attempts to fix market scamming in unregulated industries, is simply historical naivete, at best."

What scamming is that Lee? Firms are there to maximize returns to shareholders. No one forces people to shop at Walmart. Consumers make that choice because that firm is offering a better price and shopping experience than its competitors. Did anyone elver force you to go to Walmart or Office Depot?

"and yo skirted my point - it isn't that 'privatization; ahs problems, it is that unregulated business has problems, because there is always a potential individual interest in scamming the system for maximum personal gain."
Well butter my toast with a carving knife. Of course firms try to make as much money as they can. But they only do this by serving their master: the customer.

----
"Businesses can not exist without government institutions. Contract law is law. Judicial interpretation and remedy comes from government institutions - if they didn't exist from our state, businesses would have to institute them, and create their own government."
I never argued we don't need government. But nearly all things government does could be better done thought the market process. As for contract law and the rule of law...free markets could not exist without the rule of law and contract law. In fact it is possibly the one factor that distinguishes wealthy nations from poor ones. A recent study showed that nations could become wealthy only if this ingredient was part of the mark up despite law of resources. It's the big cahoona.

"There is no system immune to scamming and gaming. The libertarian fantasy is as flawed as any other - it is simply vulnerable to different kinds of gaming and different risks. Your kind of ideological adherence to the idea that a different system fixes everything, is simply 'magic bullet' wishful thinking."
Gaming and scamming is fraud. Criminal and tort law is well developed to deal with that.
"I participate in an anarchist study group regularly, with some of teh biggest vices in modern anarchist thought in attendance. My favorite thing to do is show how the various flavors of anarchism - free market, primitivist, 'lifestyle' etc - are all subject to internal instabilities that lead to reinstitution of state governments or controlling institutions of some kind, usually on termsm not favorable to individual liberty."
What you're seeing are people reaching agreements, bargaining and making trade offs. There is nothing at all surprising about that. What also not surprising is that people naturally head for regulation when there is something they don't like. It is something we should all be worried about and avoid. We are after all creatures of habit and culture. Living in a statist culture will lead to people looking for statist solutions.

Correction.......possibly the one factor that distinguishes wealthy nations from poor ones. A recent study showed that nations could become wealthy only if this ingredient was part of the mark up despite a large amount of resources.

Lee, I saw a table that put average reserve capacity for the summer of 2001 at around 20%. This very low number, (given that achieving capacity is impossible and more importantly the huge variability in demand), belies the figures that you are citing, so I would ideally like to see your source if possible. I will try to dig up mine in the meantime. As regards plant construction, NIMBY/environmental concerns were indeed the driving factor. When you consider the lead time in getting a power plant approved and constructed, (almost exclusively gas in California), there is a huge gap going back to the early 80s where no such project was initiated (which the state could afford this only as it grew to increasingly depend on Northwest imports). That the stalemate was broken by incentives instilled by deregulation is hardly an argument against (although I think the cause was more likely that the state finally began to see the writing on the wall). If you don't believe me you should look into current events signaling that this dynamic continues, e.g. travails in building a LNG facility, recent problems with a Northern Californian plan to build a desalinization plant, (scrapped when they realized it required building a power plant to fuel it), or the state's being robbed blind by refiners because they refuse to invest in any new capacity. All of this is going on courtesy of the NIMBY lobby. The LNG issue is especially telling in its echoes of the energy crisis. California is supremely dependant on gas for power production as well as residential use, and an LNG facility is really the only way to ensure supplies can keep pace with demand. If I were you, I wouldn't let the candle supply get too low.

As regards the 'c' word, you're happy to put it out there, but you should recognize you have no evidence and have not stated a compelling case. You refer to stupidity, but this is not the hallmark of a conspiracy. It's not that I'm above allegations without evidence by the way- I continue to be convinced the oil majors are gaming the US gasoline market big time, through pipeline and refinery chicanery, accidents, maintenance, discouraging new supply etc., but I can't prove it, (short of subpoenas, which don't get issued on trillion dollar industries, I can't expect more). However, I can make a compelling argument using anecdotal and circumstantial evidence that this is going on, which would be my standard for implying that the state gov was in cahoots back in 96. Anyway, I've rambled for long enough. Long story short, I agree with you on the big things, less so on the causes and other sundry details.

By Majorajam (not verified) on 04 Oct 2007 #permalink

Jc #164, absolutely wrong, and that's the lynchpin of your argument. You appear to have swallowed Hayek's mischaracterization of history. But despite The Road to Serfdom, government regulation has NEVER led to full-blown socialism in the real world. And it never will, as long as there is freedom of speech and democracy. The People will not allow it, as we often see.

Then Milton Friedman came along and argued the double-inverse of Hayek: from "regulation leads to socialism," on to: "capitalism precedes freedom." That also is historically untrue, although it has been used in rightwing thinktank rhetoric. Capitalism is not primary to freedom. Freedom is preserved by defending a Constitution.

Numbers please, Sod. No messing around here just the numbers in the raw. I wann see a CBA done even in primitive form.

If you can't give us the numbers then say so and all will forgiven but don't mess us around any longer.

lol, you telling me not to mess around but to bring facts and numbers is pretty bizarre.

you bring ZERO substance, but ask for it. strange.

but here is my offer:

you bring a calculation by any insurance, for worldwide coverage against claims caused by a nuclear accident, and i will do the calculation to the best of my abilities. deal?

Well jc, seems that you feel free to demand work from everyone else without paying for it. sod, I am sure, will be happy to provide the calculations at a businesslike rate and set up an account you can forward the money to.

i will indeed. and i will even wait until he has cashed in on his pipeless water supply deal!

I don't think the trolls LIKE it when you ignore their personalities and tantrums and calmly refute their arguments. So let's keep doing that.

There's a definite gangrene stench of desparation to your troll assault lately, Tim. The ravings way less lucid, zero cites, and long rants with far fewer nouns and way more adjectives.

They're CRACKING.

By Marion Delgado (not verified) on 04 Oct 2007 #permalink

Good point Marion. Accept it and move on, sod.

But Marion, these trolls are more fun!

By Nick Barnes (not verified) on 05 Oct 2007 #permalink

"When did you last buy your government supplied food such as meat and veggies."

When did you last go for n extended period eating food supplied by a non-regulated free market system without government regulation like in, say, Mexico?

By Ian Gould (not verified) on 22 Dec 2007 #permalink