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Coasian Bargaining: Extended Form

CarefulNow
Posts: 780
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11/6/2013 2:49:53 AM
Posted: 3 years ago
Often, a policy that is fair also happens to be efficient and is thus supported by mainstream economics though the danger exists that it will be replaced by an alternative policy that is efficient but unfair. An example is private monopoly, which is dealt with variously by breaking it up, nationalizing it, or denying its existence--not because it's unfair, which it is under any conditions, but because it's inefficient, which it is only in the absence of low-cost price discrimination. Another, the subject of this thread, is externalities, which are dealt with variously by taxation, lawsuit, or, again, denying their existence--again, not because they're unfair, which they are under any conditions, but because they're inefficient, which they are only in the absence of low-cost Coasian bargaining.

But consider the non-aggression principles. The best of them are defined broadly enough to include at least the most distortionary negative externalities and yet charge the aggressor with compensation only, regardless of the nature of the aggression (though more severe aggression will natural tend to require greater compensation). The worst of them arbitrarily reduce the class of negative externalities to a few that are to be over-corrected, via prohibition enforced by deterrence of a limitlessness its sadistic advocates can scarcely hide their delight in the thought of. All of them condemn slavery, at least. But why, if the Coase theorem is sound? What need has any utilitarian of even this least controversial aspect of the non-aggression principle? If the slave truly values his freedom more than his master values his servitude, he will buy it.
Noumena
Posts: 6,047
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11/11/2013 1:13:14 PM
Posted: 3 years ago
I'm not sure I understand what yer point is?
: At 5/13/2014 7:05:20 PM, Crescendo wrote:
: The difference is that the gay movement is currently pushing their will on Churches, as shown in the link to gay marriage in Denmark. Meanwhile, the Inquisition ended several centuries ago.
CarefulNow
Posts: 780
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11/11/2013 6:49:28 PM
Posted: 3 years ago
The Coase Theorem can be reduced to absurdity by applying it to ownership of persons. Transaction costs are low, the only obstacle to efficiency being the slave's lack of bargaining power. It's not that the slave has no bargaining power; the whip's efficacy is incomplete. It is just that what bargaining power he does have is non-monetary (slowing down, sabotage, escape, insurrection, etc.) and quite little. He is thus an extreme case of a victim of poorly distributed property rights lacking the means to compensate his offenders for ceasing their offense. But slightly less extreme cases are typical, capitalism's only lower limit of poverty being self-ownership. The value of self-ownership cannot be understated, of course, as it failed to even provide the wage-worker in money as much his enslaved counterpart received in kind.