Irrespective of what you are told carbon permits are really carbon taxes dressed up as market prices.
Carbon permits are the equivalent of tax farming. Tax farming was applied in France in the Middle Ages and was not brought to an end until the revolution of 1789 when all tax farmers were executed. This fact was brought home to me yesterday while re-reading articles by Jackson on carbon taxes. One of them contained a footnote on why carbon tax is not a price. He pointed out that carbon permits are a return to tax farming. He nailed what’s entirely wrong with carbon permits over three years ago and this material has also been suppressed by the right:
“It used to be common for rulers of old to farm out tax collection to contractors. These contractors would bid for the right to collect the taxes. The successful bidders then received a portion of the taxes they collected. This is why carbon permits fit the description of a tax. Therefore the auctioning of carbon permits is just another form of tax farming.” (Carbon taxes and Keynesian insanity)
This completely destroys the Gillard–Dreyfus drivel that “the government will ensure only credible international units will be allowed.” The whole bloody scheme is a tax collection fraud that attracts rent-seeking frauds motivated by avarice. It also involves the perversion of the rule of law and the administration of justice.
Anyone trying to defend his firm against this corrupt tax scheme will face 10 years in prison. This is worse than punishment dealt out to rapists. Even murderers who warrant the death penalty can be out in 3 years. What did the right come up with to attack that monstrous scheme? Henry Ergas and his legalistic tripe that concedes the fundamental lies spun by Cabinet.
To completely destroy the idea of a carbon tax and permits requires the kind of thinking that is absent on the right. Let us look at the pivotal lie that carbon tax is a market price. To shred this claim requires thinking in terms of real prices. And their formation and hence where real market prices come from.
Market processes, due entirely to voluntary human action, are intricate and extensive. But in the raw, consumers’ preferences determine prices. It is the role of entrepreneurs to satisfy these preferences. That consumers are not prepared to pay a price that would see production of a thing means they do not value it highly enough and firms won’t, in a free market, bother wasting precious capital in its production. Something of no value will not even be contemplated by customers and producers. (I got this from from reading Sinclair Davidson and Alan Moran. Just kidding. What I got from this is unprintable.) This is what Jackson wrote:
“… prices are a market phenomenon… formed by the personal evaluations of market participants… expressed as ratios between sums of money and the goods and services against which they exchange. In the words of Ludwig von Mises:
“A price is expressive of the position which acting men attach to a thing under the present state of their efforts to remove uneasiness. “(Human Action, Third Revised edition, Henry Regenery Company, 1966, p. 392.)
“There is no way carbon permits fit this description. These abominations are a creation of a gang of politicians, not the market. There is no process of reverse evaluation where both parties engage in voluntary exchange for mutual benefit. As for a tax, it is a charge levied by the government. There is nothing voluntary about it and no one pretends otherwise.” (Carbon taxes and Keynesian insanity)
Now we have completely shredded the Gillard Cabinet’s falsehoods as parroted by that ignoramus Mark Dreyfus in his No poison pills in carbon tax, just vital certainty, in which he asserts:
“Rather than creating a distortion, pricing carbon corrects a market failure as damage caused by emissions is not reflected in the price of goods and services.”
Dreyfus and the Cabinet are full of bullshit. Carbon emission does not cause any distortions. Co2 is a nutrient, not a pollutant. As for the concept of “market failure”, the source for this garbage is the myth of perfect competition. It’s been seized on by the Left to attack markets. Now they have seized on it to perpetrate what is nothing less than a monstrous crime on a massive multifaceted scale. No wonder Mr Jackson sarcastically called “market failure as a market result that leftists don’t like.”
As for our incompetent right, consider the fact that they also want to ram a carbon tax down our throats. They and their little mates in the Abbott lead Liberal Party are playing games with the lives of Australians in matters they treat as their private affairs. They have ensured only the Institute of Public Affairs advises on carbon tax. What did the Institute of Public Affairs Alan Moran come up with? The crude cost push accounting line. It is void of any hint of the real nature of carbon tax and thinking in terms of real prices and their formation.
They know Jackson nailed the economic cases against carbon tax and alternative energy. That’s why they detest him. So they unleashed Menzies House editor in chief John Humphreys to try and assassinate his character while the cowardly Alan Moran libelled him as loopy. The right don’t give a sod about principles and Australians. They are out for themselves only. The rotten, lying bastards.
That’s the garbage that is called the right. And they spew it out daily, now reinforced by Ergas’ bilge. That’s what the Abbott Liberal Party Opposition runs on. The likes of Senator Abetz and Scott Morrison would have everyone believe that the frontbench is loaded with talent and backed by hotshot advisers. The Liberal Party frontbench and their advisers are shit and they are betraying Australians over carbon taxes.
It damns the right and their clunker tankers that a layman in economics can shred carbon tax and carbon permits. I can do it because I studied the vital material at the Brookesnews University Faculty of Austrian School Economics. Every layman should do likewise.

