I was discussing with someone the effect government has on the economy. They asked, what would be the economic effect of outlawing hummers. People would just shift to a different car, no loss in efficiency.
Some people would feel less cool on the road.
Non-gifted guys would have to find another way of compensating. [:D]
Now seriously, there would be an effect, since the people and means involved in the production of what many people consider a valid and desirable product would have to be reallocated and such.
but no real longterm effect. This is of course putting aside the moral issue of forcing someone to do something against there will.
The same argument goes for any fine luxury and, if it is valid for one of them, it is valid for all of them. So, we arrive at the absurd conclusion that outlawing all luxury goods would have no effect on the economy. There are a lot of other problems, here. The argument assumes that the only reason someone might own a Hummer is a high time-preference desire to exhibit their high socio-economic status. But perhaps the Hummer in question was purchased by a serious car collector who is investing a portion of his family’s wealth into a tangible good that he believes will appreciate over time and remain sheltered from inflation or taxes or whatever. Perhaps he owns a company that sells body-building goods and part of selling those goods is conveying the image of male vigor in a way that only an oversize vehicle can. Note that individuals with these kind of marketing needs will not shift from Hummers to smaller vehicles, they will actually shift up to even more inefficient vehicles, such as small fifth-wheel commercial trucks or even tractor-trailer configurations.
As always, the well-intentioned social engineer imagines that the special case generalizes to the motives of all the millions of individuals which fall under the purview of his monolithic oversimplifications.
Clayton -
Is it bad that I thought this thread meant outlawing a different kind of hummer?
A different kind of Hummer? You mean like those hideous H2 limousines?
Yes, that’s exactly what he meant.
According to this rationale we could outlaw all cars but one (a Peoples Car). Individuals would just shift to the only car left, so no loss in efficiency(?). Fact is that peoples preferences differ, and the free market fulfills as much of these preferences as possible.
Look at it like ice cream. The ice cream shop sells 4 flavours: strawberry, cherry, banana, and chocolate. Now the government outlaws strawberry flavoured icecream. You might just switch to banana, but that does not mean there is no loss. You actually wanted Strawberry, but that is not possible anymore. This is your loss.
Seriously, hummers are terrible cars made for rich… Hate Hummers with a passion.
However the basic logic of this is that we could outlaw an entire fruit without consequence. Let’s outlaw melons. Suddenly everyone switches, those not producing melons can expand production more easily and cheaply than smaller farms can so they will will win out, there will be temporary difficulties, and people who want melons get screwed over.
The point of the economy is fulfilling subjective wants; ie hunger, amusement, vanity, etc.
Forbidding people from working towards the fullment of their want is then by definition anti-economy.
What’s the point of having a Hummer if it’s not the military version of it?
I don’t see how showing ones socio-economic status would be indicative of high time preference. People signal wealth in all sorts of ways, dress, accent, manners, use of language and so on and so forth, I’m not sure why cars would signal high time preference whereas these wouldn’t.
To other posters, what if the loss associated with banning Hummers were mitigated by gains made by cleaner air?
It could hurt the business of whoever makes the product, which could hurt the local economy to a various degree, which could hurt the state economy, etc.
It could also unintentionally help another business not putting resources into hummers.
I doubt that the banning of a vehicle I hardly see would change the amount of pollution in the air.
Wouldn’t any environmental situation have to be a specific example, and putting things into a context to start from? I would think everything would have to be detail dependent in order to form any economic opinion.
Would you relegalize leaded fuel?
Why would I illegalize anything?
Cause it’s poisoning through breath?
Yup, right along with the traditional legal practice of being able to sell little claims, making it more feasible to sue polluters. It’s amazing how a free market can sort out these silly little worries from silly little minds.