To Market, To Market…
Today I had dinner with a biosystems engineer that works on environmental issues. He talked about how economics is really needed to evaluate all the monetary aspects of environmental problems. I could not help but think of the words of Vernon Smith a few days ago at the AAEA meetings in Portland, OR. Dr. Smith said that one must not worry too much about all the fuss about renewable energy, global warming, and environmental issues because in the end free markets work and the free market will take care of the problem. That is true, the market does work. But it works better for people with money than for people without money. It’s a bit like the Enron scandal. The company had gotten to be bad and eventually, the truth came out and the ruthless market swallowed it. But for those people associated with Enron who had money or with enough time in front of them, the market was not as ruthless as for those nearing retirement, whose life was strongly invested in Enron. The weak always pay a higher price. I suspect the same will happen with the environment, only at a much bigger scale…
