A few days ago we suspected that we had a wasps nest somewhere near the spare bedroom window, but it's been hard to tell because the wall doesn't face our garden, and we rarely have the windows open near there. However the wall does face next door, and they do have their windows open, and yesterday our neighbour told us that she thought we had a nest and the wasps were coming into her kitchen. The nest is clearly on our property, but it's only affecting them.
Who should pay to have the nest removed?
Presumeably if both households were libertarian, or both households were socialist, agreement would be easy. Since we're neighbours there's little point trying to stab each other in the back for the sake of £25 as we don't know what future issues might arise, and therefore we have a Veil of Ignorance. Both parties would agree that we should implement a rule, and that rule would depend on whether we're both libertarians or socialists.
What would the libertarians rule be? What would the socialists rule be?
However the issue is more complicated, because we both have different notions of property rights and morality. And this is precisely why the ethical vacuum of the Coase Theory (.pdf) is so important - it can make the issue of who should pay irrelevent.
As it now stands, the gardener has been paid, but ourselves and our neighbours are in a dispute about who should bare that cost. But if it wasn't for the Coase Theory - that (when transaction costs are low) the allocation of goods is the same regardless of endowments - the wasps would still be in their kitchen.
It's easy for libertarians or socialists to argue that the ethical principle should matter, but if we accept true subjectivism then the ethical debate will always be ongoing, and won't secure an efficient outcome. The wealth effects are real - and we'll continue to argue our case - but the actual outcome is efficient and mutually satisfactory.
Yes, this is a blatant attempt to coax Steve out of hiding. If a horrible plagiarism of Stephen Cheung doesn't force Mr Lai to respond I don't know what will!
Oh, very waspish. P.S. "bear" the costs.
Posted by: dearieme | July 27, 2006 at 08:27 AM
Thanks
Posted by: AJE | July 27, 2006 at 09:36 AM
No idea what the socialist would argue... that the £25 cost should be shared?
The libertarian position would surely depend on how extensive a view of property rights the libertarians in question held.
Posted by: Joe Otten | July 28, 2006 at 10:46 AM