The following got lost when posted on Neven’s Sea Ice Blog. It took too much effort to scrap.
it is not at all clear, how high carbon price can global economy endure – actually, the financial crash of 2008 was helped by high oil prices,
What do you mean by “global economy”? It’s perfectly possible to have full employment and a high carbon price. Job creation doesn’t need economic growth but carbon intensive goods and services must be made more expensive and labour intensive goods cheaper.
May I reiterate what I said earlier:
One big problem is that economic models do not disaggregate their labour sectors sensibly. They could then show that a carbon tax recycled into creating employment for the low paid (who are the ones out of work) could create full employment without economic growth.
Since 1968 I have been making similar points and eventually got funding from the European Commission to get a very good economist, Kim Swales, to show that subsidising the labour of the lower paid would create jobs. This was published in 1995 – I had a simpler version published in 1987.
In my proposals the subsidies were matched taxing capital and high paid labour. The modelling showed that the high paid didn’t lose out much because full employment raises GDP.
My frustration can be seen in one of the comment pages on Wikipedia
I think the moderator gave Peter Lawrence an unnecessarily hard time: “I can see only one reason for citing a non-peer reviewed article: ego-spam.” The “non-peer reviewed article” was a report that was commissioned by the European Commission.
I was aware that Wikipedia had become more prone to credentialism but this case highlights a problem – it is difficult for a non-academic with a bright idea like Peter Lawrence to get anything published – let alone with peer review. They must reference academic work to make perfectly sensible and obvious ideas credible to policy makers.
But the idea he references is so ******* obvious that it shouldn’t need any reference – subsidise labour at the bottom end of the labour market (That is where unemployment hits!) and the poor find jobs and get paid more.
Obvious to taxi drivers and that “man on the Clapham omnibus”. I should know I have been asking them since the late sixties. I wasn’t until sometime in the eighties, when I met Kim Swales, that I found an academic economist that got the point.
For 45 years I have been pushing this absolutely obvious point and the attitude of the moderator shows the arrogance of academics to any ideas from the unqualified. It also shows the danger of waiting on the “experts” because if we accept their conventional wisdom and wait for that to change we are ******.
Now, of course, we have another argument for taxing the high paid to create jobs for the low paid because the spending of the affluent is most of the problem . Undifferentiated economic growth is carbon intensive and polluting. We must use carbon taxes to suppress polluting activity but encourage non polluting activity – and at the same time create full employment. With full employment it does not matter much if GDP actually falls.
For a dictator of any country the economics is simple.
I recognise that in our “spinocracy” the politics is very hard.
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