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Chapter 11

Chapter 11. Governance. Welfare Economics B ranch of microeconomics seeking to evaluate well-being. * Reduce world to costs and benefits * Assess policies accordingly.

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Chapter 11

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  1. Chapter 11 Governance

  2. Welfare Economics Branch of microeconomics seeking to evaluate well-being * Reduce world to costs and benefits * Assess policies accordingly One analysis calculates that the well-being of citizens in less affluent nations was 1/2,000 of the value of an American citizen.

  3. Then-chief economist for the World Bank Lawrence Summers argued that the lower marginal cost of waste disposal in a poor country compared with the higher marginal cost of waste disposal in a waste-producing affluent country justifies the latter polluting the former. Therefore, the poorest countries of Africa are vastly underpolluted, as they are underutilizing what affluent countries desperately need: waste sinks. The Memo Read Around the World…

  4. In appearing to be nonethical, welfare economic approach ends up being terribly unethical. In a famous essay titled The Rights of Statistical People, Lisa Heinzerling(2000, p. 189) puts this reality in plain sight: “We do not, for example, believe that so long as it is worth $10 million to one person to see another person dead […] [that] it is acceptable for the first person to shoot and kill the second. […] Yet when it comes to regulatory programs that prevent deaths—deaths also due to the actions of other people—it has become commonplace to argue that the people doing the harm should be allowed to act so long as it would cost more for them to stop doing the harm than the harm is worth in monetary terms.”

  5. When we reduce human life to statistical terms we deny people the dignity to be thought of as humans. In assigning a lower value to those of lower socioeconomic status and certain racial minorities (as race and class are correlated) it justifies environmental racism. But that’s okay, as the outcome “would not be the result of a government decision to take racial characteristics into account; in fact it would not be a product of any group-level discrimination on the government’s part” (Sunstein2004, p. 391). So discrimination that can be justified with statistics is okay?

  6. Discounting: Tyranny of the Present? • Discounting: an economic technique to monetize future well-being thus making it comparable with well-being today. • Thanks to discounting, entirely possible to reject a policy option that may knowingly save the human race from extinction hundreds of years from now on the basis that it lowers the well-being of some today. • Trickle-forward reasoning

  7. Hardin conflates common-property and open-access regimes. • Common-property regimes: members of a clearly demarcated group have formal and informal ways of excluding nonmembers from using a resource. • Not to be mistaken to mean everyone’s property • Open-access regimes: long considered in legal doctrine as involving no limits on who is authorized to use a resource.

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