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June 07, 2010



Yes the economists love the pollution, though Coase's main example in The Problem of Social Cost - quite devastatingly critiqued here http://www.jstor.org/pss/724523 - was noise.

The irony of much contemporary environmental economics is in their use of 'The Coase Theorem' to develop regulatory institutions that do considerable violence to Coase's original argument - that because a doctor and manufacturer in smoggy 19thC London could come up with an agreement about noise, there's no need for government interference with the economy. I'll leave others to analyse this through a Hegelian lens...

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