In economics, when we write or speak of the incidence of a cost or of a benefit, we refer to the ultimate distribution.

Most people get the idea that, often, costs or benefits can be passed along, so that the party upon whom they formally fall isn't necessarily the final recipient. This is certainly true of taxes.

There's a standard result of microëconomics that, if one sets aside the effects of transactions cost (dat ol' debbil), then the incidence of a per-unit tax is same, regardless of whether it is formally placed on the seller or formally placed upon the buyer. Almost every first-term microëconomics course demostrates this result, although they usually dumb-it-down by failing to note that transactions costs can somewhat undermine the equivalence.

The argument goes as follows: Imagine that the quantity offered for sale fits some function S(P_s) where P_s is the price received by the seller, and that quantity that buyers seek fits some function D(P_b) where P_b is the price that buyers must pay. If the pre-tax price is just P, and sellers have to pay additional tax and tax-related costs of t_s, and buyers have to pay tax and tax-related costs of t_b, then

P_s = P - t_s

(tax-related cost subtracted because it is a reduction in the price that what the seller receives) and

P_b = P + t_b

(tax-related cost added because it is an increase in how much the buyer must pay). Algebraïcally,

P_b = P_s + t_s + t_b

and

P_s = P_b - t_b - t_s

And the market would equilibrate where

S(P_s) = D(P_b)

(At a lower P, D would be greater than S, and it would be in the interest of sellers to increase their prices or of buyers to offer a little more per unit; and, a higher P, S would be greater than D, and it would be in the interest of sellers to cut their prices a bit, or for potential buyers to cut the amount that they offered.) Which is to say that the equilibrium is

S(P_s) = D(P_s + t_s + t_b)

as if the buyer formally paid all the tax on the seller's received price, and

S(P_b - t_b - t_s) = D(P_b)

as if the seller formally paid all the tax on the buyer's paid price.

(The next time that you hear or read of a politician arguing for employer-provided benefits, such as for health-care, consider the incidence.)

Now, let's consider the incidence of a tax on carbon emissions (ignoring the question of whether there should be such a tax), in the absense of transactions costs, the incidence would be the same whether the state formally taxed the producer of the emissions, or taxed the consumer of each product associated with the emissions, based upon the amount of the emission associated with that product. But it is plainly less costly to place the formal tax on the producer than to have separate filings for each consumer.

Which brings me to this story:

Whatever measures are imposed to curtail carbon emissions, they can be conceptualized as a tax. And it's really, folks, not that the Chinese officials don't understand that the incidence would be the same (or very nearly the same) in the absence of transactions costs, nor that they don't recognize that the transactions costs would be lower if the tax were formally imposed upon producers. Rather, it's that the Chinese state

• knows that some consuming nations would avoid or evade the tax, lowering the incidence upon China,
• would be able to disguise some of its emissions for domestically consumed production as emissions for exported product, and
• would like to misdirect blame for any failure to reach agreement.

A pH change of .24 of the oceans is definitely cause for concern. However, the natural pH of seawater is 8.2, well into the alkaline range, and reducing that by something between .24 and .45 would mean that the ocean were still in the alkaline range (though quite worryingly less). So the headline here

and much of the rhetoric within the body of the article is just rot.

As to the suggestion that the pH will be lowered by as much as .35, it comes from the IPCC, so caveat lector.

Back in April, I noted that some advocates of the theory of global warming had modified their theory to allow for climate to actually cool for up to a decade (after which the ostensible warming trend would resume). There has been a further adjustment:

(Underscore mine.) So, now, for at least the next thirty years, no matter what the temperature data say, the theory of global warming isn’t to be taken as falsified.

As most or all of you have read or heard by now, the economic news for the the last quarter of 2008 was quite bad

and the news from the stock market has grown worse

Now the New York Times frets

Of course, if they believed the naïve Keynesian rhetoric that has come back into political fashion, then the claim would be that Obama's aggressive spending plans were insufficiently ambitious.

I'm wondering whether it's merely the so-far unpassed budget that is under threat. As I noted earlier, the stimulus bill is an enormous blow to the economy, and was passed only as a result of some combination of willful blindness, knavish exploitation of a crisis in which politicians did not actually believe, and desire to worsen things on the expectation that even greater expansion of state power could be achieved. In the case of all three of these motivations, one could expect some politicians to now regret what they have done in passing the bill; what seemed like a bearable amount of plunder may now seem like a grave miscalculation. I don't think that it's politically possible that the legislature would overtly repeal the stimulus bill, let alone that the Obama Administration would openly reverse itself. But subsequent legislation might implicitly pare some of the programmes, and a formula might even be found for the Administration to suspend some programmes without legislative action.

Of course, the Administration and the Democrats in Congress know that, if they repealed a significant share of the stimulus bill even obliquely, then their opponents would pounce on how this repeal demonstrated that it were not a stimulus bill. So those who supported the bill may have a tiger by the tail.

(Underscore mine.) Not much point in preparing for things that have already taken place or are happening now.

There is a myth (demonstrated to be false by economist Ronald Harry Coase about 50 years ago) that, before the state stepped-in to regulate radio transmissions, there was simply chaos, as one would-be broadcaster tried to over-power the signal of another.

Actually, what happened was that broadcasters who wanted to work in the same frequency ranges and in the same geographical regions as each other went to court, and the courts began to apply the principles of homesteading to broadcasting. The main questions, as with the use of land, was of who was there first. Basically simple (though there certainly could be nuances).

Now, I would acknowledge the point, made by Donald Clayton Hubin and others, that allowing someone to own the use of one part of the electromagnetic spectrum doesn't seem different a priori from allowing them to own any other, and the intuitions of many of us would be immediately alarmed at the idea that someone should own, say, red in the Columbus PMSA. But we are alarmed in the context of there already being meaningful use of red by everybody; given that use of red, we could conceptualize the existence of a sort of easement actually giving us each a right to its continued use. On the other hand, prior to the development of radio, people did not so much use those parts of the electromagnetic spectrum as accidentally generate such electromagnetic radiation. For important parts of the spectrum, that remains the case. And, in-so-far as such accidental generation may be long-standing and so forth, one could believe that there was an easement allowing such continued accidents, but otherwise impute a property right to broadcasters in the same ranges as the accidents.

There's also a bit of apparent oddness in the fact that broadcasting amounts to vibrating the surrounding area; this seems a use of the properties in the surrounding area. But, while it's certainly a use, we have to be careful about the issue of whether it is a use of the property of others. We tend to equate property with the object against which a property claim is made. For example, we would normally simply say that Thomas's house is Thomas's property; we would even normally continue to say this if Thomas rented the house to Richard. But the notion of property rights as distinct from use rights is incoherent, and the rental agreement transfers some of Thomas's property rights to Richard, even if only rights specific to a defined interval. So, backing-up, we need to at least ask whether the property rights of those otherwise owning physical things in the area surrounding a broadcaster included exclusive rights to vibrate those things, or at least exclusive rights to vibrate them other than in the aforementioned accidental manner.

The reason that the airwaves were declared to be public was not because there was no coherent model of private property in the use of the electromagnetic spectrum, and the declaration certainly wasn't to end chaos.

(Nor was it because there is some sort of natural monopoly in broadcasting. Consider how few daily newspapers the typical city now has, as opposed to how many radio and television stations it has.)

The nationalization of radio broadcasting was to introduce censorship. People were broadcasting opinions that the state and its clients didn't want broadcast, such as attacks on the medical profession. Freedom of speech was the chaos that was stopped.

This brings me to the Fairness Doctrine, which was introduced in 1949 and prevailed until late-mid 1987. The doctrine ostensibly required broadcasters to present opposing views on important and controversial matters, in a fair and balanced manner.

Even if it had done this much, it would have been a gross violation of freedom of expression, much like forceably demanding that any of you reading this entry both speak-out on important and controversial issues and that you always defend, as strongly as practicable, views that you oppose. Operationally, you couldn't be a spokesperson for your own views so much as a reporter of what views were had.

But, in practice, the Fairness Doctrine was part of a system of disguising gross biases as balance. For example, the gentlemen's agreement (sans gentlemen) between the prevailing political left and political right has been that only both sides are represented, not the views of those who do not fit on whatever might be the left-right spectrum of the day, the Fairness Doctrine abetted the impression that no one (or no one who mattered) could have such views. Beyond this, the politicial left, for most of this period, was largely successful both in disguising their own views as neutral, and (when unable to do that) in selecting poor representatives of the political right to present opposing views; thus not even both sides were given the same opportunity to be heard.

The Doctrine fell because of pressure from those who opposed censorship in principle and from those who were given the short end of the stick (the political right) or given pretty much no end of the stick (everyone not on the left-right spectrum).

Once the Doctrine fell, the political right developed a sort of counter-weight to the main-stream media. Against CBS, ABC, NBC, PBS, and NPR, the right threw-up first a network of AM radio stations and then Fox Television. In terms of combined listenership and viewership, these countervailing broadcasters don't match the old main-stream, but it upsets the political left that there should be grossly biased broadcasting, when the gross bias isn't their own. And, in spite of their continued dominance in the more important medium of broadcast television, it hugely disturbs the political left that the right-wing has a larger presence in AM radio.

Parts of the left persuaded themselves that the right-wing dominated talk radio because powerful corporations were willing to sacrifice direct profitability in order to mold public opinion in favor of the political right, and therefore presented only personalities such as Rush Limbaugh, rather than what would be popular progressive (social democratic) personalities. Hence, Air America Media. But, in operation, Air America has not been profitable; it has been a meaner, dumber NPR, dependent upon subsidies.

So there has been increased interest on the part of the left-wing in a revived Fairness Doctrine. And even trial balloons about somehow applying it to the Internet. Therefore, I am pleased and relieved that the Obama Administration has declared that it does not support a revival of the Doctrine. I would really like to believe that this decision is based on a respect for freedom of speech, but the plain fact is that the present SCotUS has a majority bloc that could be expected to reject a Fairness Doctrine as unconstitutional, and the Court could well continue to have such a majority for at least the next eight years. (Justices Kennedy and Scalia are each about sixteen years younger than Justice Stevens.) But if just one member of that bloc were to leave the court then the Obama Administration would be faced with a new calculation.

As is its wont, the Beeb gets things quite wrong:

The race hasn't heated-up; it has slowed-down as a result of the CERN accident, giving Fermilab a chance to catch-up and possibly win.

Speaking of the Beeb getting things wrong (this time for lack of ethical bearings), here's and interesting (if somewhat lengthy) critique of Earth: The Climate Wars: