Saturday, December 25, 2010

The 'Free Market' is a shibboleth

The "free market", "market mechanism" etc is virtually a shibboleth these days.

But the free market or cargo-cult market fundamentalism as I prefer to call it is the problem not the answer. Free markets or rather unregulated markets are what have caused the Great Recession and the climate change disaster.

"a carbon price might, in theory, make complimentary measures redundant. But, as Professor Ross Garnaut points out, it would need to be $50-$100 a tonne to make it so."

Compare this with Stiglitz who says the tax needs to be somewhere near $88/t.

Why can't we start at a low rate ($10-20/t) and move up from there over time? And return the fee as a citizen's dividend to post compensate for increased energy prices and mute criticism of the 'great big tax'.

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