The use of antibiotics creates a huge negative externality resulting in superbugs, bugs resistant to antibiotics. Taxing the use of antibiotics could solve this problem. Why not tax them, and what are alternative solutions?
Do you have any evidence that’s impossible to produce better drugs (and methods) to deal with these superbugs?
Of course you don’t, so why are you saying that a tax (which will outright kill a lot of people who could have been saved) is the only solution to deal with the problem?
Sorry, where did I make any of the claims you’re attributing to me?
I hate to sound like a broken record but the market seems like a great solution instead of a tax…
How could the market solve this problem?
You could try the Coase Theorem.
I don’t see why you’re allowed to apply incentives to show that the market will have a tough time handling this, but for some reason don’t have to apply incentives to the state.
Also, a consequentialist solution shouldn’t create more externalities than it solves.
The Coase theorem is George Stigler being silly.
Agreed. It’s an empirical question.
On the margins, taxing the use of antibiotics wouldn’t. I agree that it’s no argument for the state’s existence and current activities, but given those…
by creating alteratives to kill bacteria
Strike 1
It can can be answered empirically, but you don’t have to.
Given [a perfect solution] to [problem], the [problem] will be solved.
Once again you are not asking an economic question, you are using a metaphor. You are also ignoring expectations:
The question you are asking is either a moral or legal question in a void, not in real life and in practice with people who are relevant to the decsions being made - hence the question becomes incomprehensible. We live in a market world, the market IS everything that we can put in context, and we live in a world of expectations where people make their day to day calculations within some form of a market context.
No matter what: the market “solves the problem”, and “creates the problem”
Isaac,
That in no way solves the problem of the externality.
Sieben,
Ok.
Clearly one doesn’t have to do anything…? You lost me.
Sorry, where did I say that? Maybe I read too much into your initial point. I thought you were arguing that a state creates externalities, so it shouldn’t tax antibiotics.
Agreed with OP. Austrians here are using the typical obsfuscation tactics like they love to when the debate doesnt go their way - like denying categorical relevance of topic, rejecting alternative solutions due to methodological distaste (oh noez its an empirical issue we dont deal with this!), rejecting the problem all together(and you guys call keynesians lacking common sense?). Really guys, get real. Austrian economics may have some merit but in this situation government is the solution, its that simple. I bet even Ron Paul would agree with it.
I was waiting for some “real” after you said “get real”. It seems the only offering is still smartasses trolling along, trash talking with no “real” ideas at all. I could answer the same way I did the last time a topic on disease control came up. The question is, why would anyone give the time of day? As if there isn’t enough of that crap here to bore everyone to death.
Why does it not solve the externality? and how does a tax solve the externality then?
this situation government is the solution
This may be the case (and I suspect it is, in the situation that is trying to be set up) - but that still doesn’t mean anything in economics. And if it does it falls in the realm of expectation.
Isaac,
New antibiotics won’t change the problem that people don’t bear the full costs of using antibiotics. Taxes make them bear more of the cost than they would naturally.
how do you know? It would be nice to go into the future and see what products arise but that is impossible
To be fair, there are also positive externalities involved in antibiotic use as well as intergenerational and uncertainty issues to consider. To make things even more interesting you’ve also got the whole “how much is a human life worth” issue to solve, which has always been a little tricky. So I guess in this case I’m actually going to have to side with the libertarians on this one - even under a bunch of simplifying assumptions the efficient solution is going to be really, really difficult to find. I’d probably recommend the government staying out of this one. Of course, the government could always provide funding to scientific research on the issue, which seems like a pretty good idea to me if these superbugs are that big of deal.
That said I don’t think anybody came up with a satisfactory answer to this one relying on this market to come up with some answer magically smacks of naive dogmatism and saying that the tax will cause people to die really doesn’t get the whole externality business. (Of course, when arguing for libertarianism its much easier to assume that the market is totally fucking awesome!)
There will be when someone is genuinely interested and not merely playing eternal skeptic.
“Coase” the poster on this forum (not the actual economist) asks a question:
“What about anti-biotic resistent bacteria? How will market handle them?”
This is only a question someone who does not know economics can ask. This would get you low grades if topic for economic essays. For, it is a question of the sort, which has no relation to economics:
“What about rain? How will the market handle this?”
“What about earthquakes? How will the market handle them?”
“What about gravity? How will the market handle this?”
“What about ugly housing, unpleasant lawns, ugly babies, old people, etc., etc. ?”
“There are neither floods nor hurricanes nor earthquakes nor misery in Socialist Paradise,” said Chinese Communists. This was interpreted by them to make no announcement of predicted earthquakes during the Cultural Revolution, resulting in hundreds of thousands of deaths and as many homeless.
This question deserves one or both of two answers to such questions: 1. It won’t, and so what? What is it about forces nature and of disasters? What about 2. If it does, only through capital accumulation and better technology in our future. In this case, periodic discovery of new antibiotics or treatments. “There are no externalities,” said Mises, “in relation to the world as a whole.”
“It is neither the business of government or markets to plant trees on hills.”