Tuesday, March 04, 2008

Natural debt, the cost of resource over-development

If you catch all of my fish, do you owe me anything? Um, yeah. And now the debt is real because an economist said so.

I'm pleased to see this erudite exposition on the damage done by resource use, and it's unequal distribution. The result: harm does trickle down the income ladder to those on the bottom. I wouldn't be surprised to learn that harm and damage are what trickles down most effectively.

The project is a valiant step forward, and it will help legitimize the desire for correction that many people feel when they learn about unequal distribution of costs and benefits resulting from trade in many valuable natural resources, like fish. Now that the costs are quantified, perhaps they can be "internalized" which means the costs get chewed up and digested by our economic institutions so that they matter when people are making decisions.

An interesting sidelight, one of the authors bears a famous name from the history of economics, although some true believers in capitalism may think the name is taken in vain in this paper. I prefer to believe that the great thinker would blanch if he heard what's said in his name these days.

In my layman's view, the modern Adam Smith's "Debt of Nations" is the logical follow-on to the original Adam Smith's "Wealth of Nations," now that much capital has flowed since his seminal work. And fun to note that the modern Smith hails from UC Berkeley.

I think it's time for a new bumper sticker:

What debt-redistribution scheme would Adam Smith drive?

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