20 April 2007

there's no such thing as a free lunch. or parking.

Steven Landsburg over at Slate draws a picture of our collective (i.e. "your") ignorance of economics and it's effect on our environment.
There's a general principle here: We get bad outcomes when damaging the environment carries no penalty. That's why the world has too much pollution and too many cars on the street. It's also why, whenever something exciting happens at the ballpark, everyone stands up to see better and nobody succeeds. We all jump up out of exquisite concern for our own interests and none at all for the damage we inflict on our neighbors.
requiring free parking is a form of price control that drives inefficient allocation of constrained resources. that means waste—of energy, and thus pollution; and of opportunity cost: the loss of benefit to society of what else could take up that space.

1 comment:

  1. Another way to phrase this is that when we externalize our true costs, then we have a tendency to forget about them. Just like with petroleum.