Business: the driving force behind globalization and what has made America great. When I think of business I think of men shaking hands and smiling while exchanging goods and services. This exchange of goods and services, as any basic economist can tell you, is the essence of efficient production and mutual enrichment.
With any economic transaction however, there are bound to be some externalities. In economics, an externality of an economic transaction is an impact on a party that is not directly involved in the transaction. In such a case, prices do not reflect the full costs or benefits in production or consumption of a product or service. With the rapid industrialization of the world, the most commonly cited externality that has arisen is pollution. I have no economic incentive to worry about the environment, something that everybody needs, when I have a profit to make. Similarily, even if I think the road sucks, there is no benefit for me alone to improve it since it benefits everyone. My libertarian colleagues might disagree, but this is where I believe the government can and should step in.
With China’s westernization came more technology, and technology needs electricity. Without the necessary infrastructure to support mass construction and use of, say, wind or nuclear power, the only available option was coal, the filthiest of all technologies! Now, while China is catching up very quickly in terms of GDP, many people are having to deal with the ill effects, or externalities of all the pollution that has been thrown into the air and water, and many chinamen are very sad. The Han people are very clever though, and recently the government is undergoing a bit of a green revolution, even if for no other reason than to stay on par with the united states in terms of technology. Competition brings out the best in everyone, however, and a significant portion of my blog shall see how China’s largest businesses are dealing with new technologies, such as green energy. I kind of consider nuclear power green energy.
http://www.chinainfo.org/news/show.asp?nid=106644
2 Comments
I love what you’ve said here about prices not reflecting all of the costs. It’s a nice word play. I commend how well defined your focus seems to be. I don’t necessarily agree that nuclear power is green energy but in comparison, I can see where that idea would emerge.
Thanks- it’s important to remember these things when we are thinking of how governments govern best. And to the nuclear energy, I certainly don’t either, when you consider Chernobyl or Three Mile Island, but it’s important to remember that, as rational men, we must think of things in terms of degrees- and most anything is better than coal by comparison! In fact, I was surprised to find that quite often people don’t consider hydroelectric power to be the best “green” technology considering the adverse effects the construction of the dam can have on the environment and it’s surrounding ecosystems! I’ll admit I haven’t done much research on the topic, but wind, solar, and later, hydrogen seem to be our best bets. Until they can develop the technology for that though, (which I’m sure will be in no time) nuclear energy is a far better alternative to coal.