20 November 2010

Under-produce public goods; over-produce public bads

If non-rival, non-excludable, public goods are under-produced while public bads are over-produced in a market economy then the covenant that maintains the ecological balance will be broken because that balance is a fund-service that is itself a public good. 
The political side of the question goes to how the resource curse works. The over-harvesting of natural resources that were granted by the grace of God results in unearned wealth. Unearned wealth is easy to transact in as unearned: 
  • One form of unearnedness is to withhold the transmission of the gift; 
  • the other form is to insist on corrupt payments for facilitating the transaction; 
  • yet another form is to violate the rights of private property; and finally, 
  • the ultimate form, is to alter the rules of society to make seemingly legitimate the enhancement of power of the incumbent power-holders. 
Query: how does the polluter fit into the resource curse? The polluter is the other side of greed. As the greedy man keeps as private what should be passed on, the polluter passes on what should be kept private. The unearnedness comes from the refusal to compensate for the production of the waste. 
How do you compensate? By honoring the covenantal mechanism by which the waste is purified. The polluter violates the mechanisms of purity in the society, and those mechanisms are all covenantal. 

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