tag:blogger.com,1999:blog-4900303239154048192.post7790498721672304147..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Kapp-and-Trade UnionsUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4900303239154048192.post-23710221663845329172015-01-18T19:04:58.902-05:002015-01-18T19:04:58.902-05:00Yes. Thanks, Barkley. Pigou definitely put the &qu...Yes. Thanks, Barkley. Pigou definitely put the "externalities" concept on the map, although he didn't use the term externality. Pigou's terms were incidental uncompensated services and uncharged disservices. Marshall used the term "external economies." <br /><br />Much of Pigou's analysis that relates to labor came from Chapman's "Hours of Labour," which in turn took its cue from Brassey's <i>Work and Wages</i> from the 1870s that Marshall was very taken by.<br /><br />Direct lines of influence (and correspondence acknowledging the influence) can be traced from Brassey to Marshall to Chapman to Pigou to J.M. Clark to Kapp. In terms of "legitimacy" then, Kapp might be considered more orthodox than the received textbook version of externalities and market failure.<br /><br />I agree that the so-called Coase theorem is not Coase. Where Coase slipped up, though, is that he didn't examine the issue of the social cost of labour, which both Pigou and Clark did. See my essay on "The Hours of Labour and the Problem of Social Cost."Sandwichmanhttps://www.blogger.com/profile/11159060882083015637noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-69657873615130183462015-01-18T17:57:52.671-05:002015-01-18T17:57:52.671-05:00The neoclassical economist who played the most imp...The neoclassical economist who played the most important role in formalizing the concept of externalities was Marshall's follower, A.C. Pigou, in his 1922 (or 192?) The Economics of Welfare. <br /><br />Curiously, Coase can be seen as agreeing to some extent with Kapp. He himself was frustrated with those like Stigler who went around declaring the applicability of his "theorem" in all kinds of places it did not apply because Coase himself was fully aware that in most situations transactions costs are very important, and he saw his analysis as leading to an emphasis on those and why they are and what to do about them. Once one abstracted from them, then the matter of property rights and negotiations (the latter involving transactions costs) amounted to a matter of simply determining who would pay for the costs in the end.rosserjb@jmu.eduhttps://www.blogger.com/profile/09300046915843554101noreply@blogger.com