Papers > Politics > Dealing with Pollution Gov vs The Market
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Dealing with Pollution Gov vs The Market
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Dealing with Pollution – Gov. vs. The Market
Dealing with air and water pollution is something that has been questioned throughout time. In order to know whether the government or markets should be left to deal with the problem, it must be understood, economically, what pollution actually is and what affects it has on land and people. ... The best way to achieve this equilibrium is to have the government interject and regulate the affairs of firms’ pollution. Although the complete elimination of pollution would be an ideal situation, it is neither plausible nor economically smart to do so.
A common philosophy among many economists regards the necessity of “the market” to guide the economy, consequently leaving the government uninvited in the dance of balancing society’s marginal costs and marginal benefits. ... Unfortunately, like most pairs of pants, there is a “loop whole” in the market system.
Markets contain what is known as “market failures,” or the inability for the market to attain the equilibrium of the marginal costs and marginal benefits of society. ... In the case of pollution, a factory creates an externality by polluting the air, imposing cleaning or health costs on the surrounding community. ...
In order to show the importance of government intervention to correct this market failure, we’ll use an example of a company that produces cardboard boxes. ... Moreover, since cleaning up the pollution in the river would cost the company money, they can save costs on producing the cardboard, and thus sell the product at a lower cost without having to incur the pollution-control costs.
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Paper Information
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Title: Dealing with Pollution Gov vs The Market
Words: 1133
Rating: None
Pages: 4.5
submitted by: jephbrink
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