Interesting. Another example that there is no such thing as a free lunch. The one thought I keep going back to is while the family choosing to live in a area with more air pollution may be paying less in rent now, we know there is a negative impact on health from poor air quality and would that health impact make the immediate economic gain of less rent beoutweighed by the long term health consequences (lower productivity, increased illness, chronic illness, shorter life expectancy) of which those costs are born by that family or even society if we are talking about lower income families?
Isn’t this the basic issue with gentrification? Improve a neighbourhood, and the previous residents (if they didn’t own the houses) might find themselves priced out because it has become attractive to wealthier people who previously would not have wanted to live there.
Absolutely! Great point and I should have included something on that. The way to make it win-win is to find a way to compensate the appropriate people. I think Alchian would agree to use the capsule in that case. I would.
I'd be interested in seeing critics of Alchian square the pollution example with their beliefs about gentrification.
That's a great connection. I wish I had thought of that instead of trade.
My inclination is to be pro-pollution reduction, pro-gentrification, and pro-free trade. I hope we can find ways to compensate the losers.
Ok, I admit, maybe I'm crazy
Haha. It comes with the territory!
Interesting. Another example that there is no such thing as a free lunch. The one thought I keep going back to is while the family choosing to live in a area with more air pollution may be paying less in rent now, we know there is a negative impact on health from poor air quality and would that health impact make the immediate economic gain of less rent beoutweighed by the long term health consequences (lower productivity, increased illness, chronic illness, shorter life expectancy) of which those costs are born by that family or even society if we are talking about lower income families?
Isn’t this the basic issue with gentrification? Improve a neighbourhood, and the previous residents (if they didn’t own the houses) might find themselves priced out because it has become attractive to wealthier people who previously would not have wanted to live there.
Yes it is. Sam suggested it in a comment. It is a better example than trade.
Absolutely! Great point and I should have included something on that. The way to make it win-win is to find a way to compensate the appropriate people. I think Alchian would agree to use the capsule in that case. I would.