Category Archives: harm principle

Pigouvian Taxes

Introduction

In economics externalities are the effects of one’s action on third parties. An externality can be positive or negative, and in general the occurrence of externalities is unintended. Negative externalities are those effects which cause harm upon (non-consenting) third parties.

Because of the harm principle the government is justified to create regulation to reduce the amount of negative externalities. There are several ways to do so. First the government can prohibit or restrict certain activities. Secondly the government can discourage certain activities.

Pigouvian tax

One method to discourage certain activities is to impose a tax on such activities. The idea is that by making undesirable activities more expensive, people will either limit such activities or to abstain completely from it.

The first question is how much tax should be levied. There are several things to be considered: the cost of enforcement, the effective deterrent and the compensation of harm caused.

Every tax has to be enforced, and tax enforcement is not for free. Ideally the revenues of a tax should be larger than the costs to collect it. Once we know what it takes to enforce a pigouvian tax, we could determine the minimal tax liability.

A possible problem, however, might be that this minimal liability, does not actually deter people from performing undesirable activities. This because the benefits they can gain, outweigh their tax liabilities. Hence the tax should be large enough to cancel any net benefit. On the other hand, this second minimum could be lower than the costs of enforcement.

Another way to look at the height of tax liability, is to take the cost of compensating negative externalities into account. For instance if water wells have been polluted, there are costs involved in restoring the water wells. On the maxim “the polluter will pay”, it’s reasonable to charge those who have polluted with this costs.

On the other hand, pigouvian taxes are meant to prevent the occurrence of negative externalities. Economically, the costs saved by this prevention should be counted as a benefit. Consequently, it does not actually matter if the revenues raised by a pigouvian tax does not cover the costs of its enforcement, as long as this tax succeed in reducing negative externalities.

Also the success of a pigouvian tax should not be measured in terms of revenues generated, but in terms of harm reduced. In a best case scenario a pigouvian tax will generate zero revenue, because everyone quits producing negative externalities. A pigouvian tax should not be imposed solely for the purpose of raising public revenue. Nevertheless the revenues raised in this way, should be used for public causes.

The Importance of Clean Air

A study done by Frederica Perera demonstrates that a cleaner air will result in an increase of the IQ of children. That the reduction of air pollution has a positive effects on the development of children, is not surprising but it demonstrates once again the importance of clean air. More generally the cleaner the air is, the healthier the people are, which will result in lower costs of healthcare.

Pollution should be considered as an infringement of people’s right to health, and hence it’s the proper duty of the government to take measures to guarantee clean air. In order to keep the air inside space settlements as clean as possible, we have earlier proposed to outlaw internal combustion engines; also we are strongly in favour of banishing polluting industries from space habitats.

Space settlements as smoke-free zones

Scientists have found that smoke-free legislation has positive effects on the health of children. Both preterm births as well incidence of asthma has been declined as result of banning smoking in public and work places.

It’s widely known that second-hand smoke as dangerous as smoking itself. Classical liberals in the tradition of John Stuart Mill, believe that adults should be free to do whatever harm to themselves; but if their actions would harm non-consenting others, then the government is justified to interfere. This rule is known as the harm principle.

Smokers do, by exposing others to their smoke, cause harm. That smokers inflict harm to themselves, is from a Millian perspective irrelevant as long as it is their own choice. What matters is the harm done to non-consenting others. Especially in case of children.

Children are because they not yet able to make their decisions, dependent of adults. If people smoke in the presence of children, the latter have little or no means to protect themselves against this violation of their right to health. Therefore the state should take action.

The research cited above about the positive effects of smoke-free legislation in Western countries, suggest that Space Settlements should take the ultimate step: complete prohibition of smoking. That means outlawing the sale smoking devices and, of course, smoking itself.

Since this prohibition is aimed at the protection of third parties, and not against the use of the drug nicotine per se, the sale and consumption of products such as nicotine patches, inhalers and nicotine gum, should be legal. Also the sale and consumption of smokeless tobacco products should not be be affected by the total smoking ban.

Time zones and separation of functions

One of the major advantages of space colonization by the use of free space habitats instead of planetary “space” colonies, is the separation of functions. Gerard O’Neill already advocated that residence, agriculture and heavy industry should be separated from each other, i.e. that agriculture and heavy industry should not be done in the same structure where most residences are located.

In regard of the separation of agriculture and residency, O’Neill gives two main arguments. First, in a space settlement we have full control over both climate and day length. However, the climate preferred by most citizens is not necessarily the most optimal climate for the cultivation of crops. Second reason is pest control. If in an isolated space farm a pest will occur, it will be easy to deal with it by sterilizing the farm by increasing temperature above the limit life cannot survive. It’s quite obvious that we cannot do this, in a space habitat populated by humans.

For the separation of heavy industry and residency, the arguments are even more straightforward. Heavy industry impose a great danger to health and safety through its pollution and potential of explosion and similar disasters. By banning heavy industries from space habitats, we create a clean and save environment for people to live.

A second argument put forward by O’Neill is related to his proposal to divide space settlements over three time zones, with a 8-hour difference between each successive zone. Because heavy industry is located outside any space habitat, they can be in continuous operation. And if the industry hires shifts from different time zones, night work which is considered as unpleasant by most, will be avoided.

O’Neill imagined that space settlers employed in heavy industry, would commute each day between their home and their workplace. But technology has improved much since the mid 1970s, that nowadays much work can be automated and where people are still needed teleoperation will allow workers to run factories without leaving their space habitats or even their homes.

Besides the desire the avoid night work, there’s another reason for dividing space settlements among different time zones (which surprisingly is not mentioned by O’Neill). The principal power source of space settlements will be solar power. And since there’s no night in space (in space settlements night has to be created by covering the windows), space based solar power plants will run continuously and hence have a continuous output. But the demand for power is not continuous over the day, causing surpluses at some moments and shortages at others.

If we divide the population of three time zones with an 8-hour difference, the power demand curve will be flattened. This because if one settlement is facing a power shortage at some point, it’s likely that another settlement has a surplus since their population is experiencing another phase of the day.