Archive for Dwight R. Lee
Dwight R. Lee is professor of economics at Southern Methodist University.
The Perverse Popularity of Command and Control
Most government attempts to protect the environment involve imposing detailed regulations on how, and how much, pollution must be reduced. This command-and-control approach does reduce pollution, but as I explained last month, it does so at high cost.
1Sep2001 | Dwight R. Lee | 3 comments | ContinuedThe High Cost of Command and Control
We may not all agree on how much pollution to reduce, but we certainly should agree to reduce it as cheaply as possible. Since cleaning up at least cost is exactly the same as maximizing the cleanup for any given cost, cost minimization should appeal even to those who dislike thinking about the cost of protecting the environment.
1Aug2001 | Dwight R. Lee | 0 comments | ContinuedReducing the Cost of Reducing Pollution
As we discussed last month, the efficient amount of pollution is not likely to please many. The problem is that everyone in an area has to consume the same amount of environmental quality while the value of that quality and the price paid for it vary from person to person. Some will want less than [...]
1Jul2001 | Dwight R. Lee | 0 comments | ContinuedAre People Pleased with the Efficient Amount of Pollution?
It is clear that zero pollution is not a reasonable goal once we recognize that polluting creates benefits as well as costs. Long before we reduced pollution to zero, there would be so much environmental quality and so few manufactured goods that the marginal value gained from increasing pollution would be greater than the marginal cost.
1Jun2001 | Dwight R. Lee | 1 comment | ContinuedThe Efficient Amount of Pollution
When environmentalists argue that the costs of protecting the environment should be ignored, they quickly find themselves in a box. The only way to protect environmental quality in some ways (say, reducing water pollution) is by harming it in other ways (say, increasing air pollution).
1May2001 | Dwight R. Lee | 0 comments | ContinuedThe Problem of Environmental Protection
A common belief is that economists don’t care much about the environment because they are preoccupied with money, markets, and material wealth. And when economists do consider ways to protect the environment, they emphasize benefits and costs, trying to express all values in terms of cash.
1Apr2001 | Dwight R. Lee | 2 comments | ContinuedEconomic Efficiency
Economic efficiency is the standard that economists use to evaluate a wide range of things. Economists who favor markets argue that they generate outcomes more efficient than do socialism or government regulation. As we shall see in the next few months, economists don’t like pollution because it is inefficient.
1Mar2001 | Dwight R. Lee | 1 comment | ContinuedMarkets and Marginalism
To do your best in your personal activities, you have to “equate at the margin,” which, as I explained last month, means allocating your time over different activities so that the marginal value of time in every activity is the same. The importance of equating at the margin extends beyond individuals doing as well as possible personally; it is also crucial to the success of the general economy.
1Feb2001 | Dwight R. Lee | 0 comments | ContinuedMore on Marginalism
There are so many economic issues that cannot be understood properly without recognizing the importance of marginal considerations that I could continue writing columns on marginalism indefinitely. Indeed, marginal analysis will reappear both explicitly and implicitly in my future columns. But this month I will wrap up my emphasis on marginalism with some additional observations on this crucial economic concept.
1Jan2001 | Dwight R. Lee | 0 comments | ContinuedHow Government Prevents Us from Buying Safety
There is a limit to how much people will voluntarily pay to reduce the risk of accidental injury or death. In other words, the marginal value people place on their lives is finite. We accept some risks to take advantage of opportunities to do things that, at the margin, provide more value than the expected sacrifice in health and life expectancy.
1Dec2000 | Dwight R. Lee | 1 comment | ContinuedSacrificing Lives for Profits
I pointed out in my last column that despite what people commonly say about how human life is priceless, they put a price on their lives every day with their actions. People take chances that shorten their life expectancies to do things that are fun, and for the convenience and savings of not taking every precaution possible.
1Nov2000 | Dwight R. Lee | 1 comment | ContinuedMarginalism and the Morality of Pricing Human Lives
When I ask students in my large economics classes if some things are just too important to put a price on, someone always answers, “human life.” This seems like a reasonable answer.
1Oct2000 | Dwight R. Lee | 0 comments | ContinuedTake This Job and Shove It, at the Margin
Many believe that pay is overemphasized and much too unequal in market economies. Supposedly, most people enjoy working, and so while they have to be paid to survive comfortably, they don’t have to be bribed with bonuses tied to performance to do a good job. Indeed, psychological experiments indicate that the intrinsic interest people have in doing a task declines when they are paid for doing it.
1Sep2000 | Dwight R. Lee | 0 comments | ContinuedMarriages, Mistresses, and Marginalism
Distinguishing between marginal and total values is crucial to understanding many human activities and decisions. Almost all the decisions we make are made at the margin, but there are exceptions. We are sometimes faced with decisions that force us to compare the total value of one option to the marginal value of another.
1Aug2000 | Dwight R. Lee | 3 comments | ContinuedRunning Out of Agricultural Land
Fear that we are running out of important resources is perpetual. Oil is a favorite thing to worry about; landfill space is another, and trees yet another. I could continue listing things (coal, copper, iron ore, even tin) that people have worried would soon be exhausted, and I plan to discuss the persistent fear of resource exhaustion in future columns. In most cases the fear is baseless—fueled by organized interests hoping to capture advantages by scaring the public, by sloppy journalism, and by a general lack of basic economic understanding.
1Jul2000 | Dwight R. Lee | 3 comments | ContinuedIt’s the Margin That Counts
Economists, like everyone, have opinions about how the world should be. And it would be disingenuous to claim that economists never let their opinions influence their conclusions and recommendations. But the power of economics is in fundamental concepts that prevent economists from letting their imaginations obscure reality. They may wish that scarcity didn’t exist, that [...]
1Jun2000 | Dwight R. Lee | 16 comments | ContinuedFreedom of the Price
Last month I explained why our liberties will be steadily eroded without a genuine commitment to liberty in general. Fortunately some liberties are widely recognized as crucial and have influential interests protecting them from political violation. An interesting example is freedom of speech—freedom against government censorship. Recent examples of the censorship of politically incorrect speech [...]
1May2000 | Dwight R. Lee | 2 comments | Continued-
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