Write an essay (~6-8 pages) on a specific public good or externality — for example, one described in chapters 5, 6, and 7 of Gruber. You may select a public
good or externality that is not mentioned in the text too. In addition to describing and explaining the nature of the market failure, the assignment should
analyze and compare alternative approaches to remedying the economic inefficiencies and any distributional issues related to the market failure.
M2 Readings and Resources:
Read/review chapters 5, 6, 7, and 10 in Gruber.
Costanza, Robert, et. al. “The Value of the World’s Ecosystem Services and Natural Capital.” Nature vol. 387, May 15, 1997, pp. 253-60.
Costanza, Robert, et. al., “Twenty Years of Ecosystem Services: How Far Have We Come and How Far Do We Still Need to Go?” Ecosystem Services,
September 2017.
Coase, R. H. “The Lighthouse in Economics.” Journal of Law and Economics, University of Chicago Press, Vol. 17, No. 2 (Oct., 1974), pp. 357-376. .
Tax Policy Center, “What is a Carbon Tax?” Tax Policy Center Briefing Book, 2020.
Anomaly, Jonathan, “Public Goods and Education,” in Philosophy and Public Policy, edited by Andrew I. Cohen, Rowman and Littlefield Publishing, 2018.
counter argument is suggested by Jean Elleinstien who argues that Stalin methods included “increasing taxation on the rich and abolition taxation on the poor, stepping up aid to collective farms and state farms,” suggesting the government and peasants remained compliant with each other which means that the methods can be justified since they were beneficial. Her argument can be credited by the accounts that suggest the farms had access to clean water and electricity and schools and health centres were established on the farms in order to incentivise more peasants to join. Even women were allowed to work instead of staying at home. As a result, nearly 50% more of the population in the countryside could be mobilised to work the fields. This allowed the transition of labour from the countryside to the cities. These methods of incentivising collectivisation confirm some validity to her argument since it testifies that the state not bullying the peasants but helping them transition into collective farm. Therefore, the methods are justifiable since they were not brutal but only an aid for the peasants. However, Elleinstein’s argument can be heavily contradicted. For example, the interview of an OGPU colonel who in an interview commented, “did I do all that in order that I should now surround villages with machine-guns and order my men to fire indiscriminately into the crowds of peasants?” This undermines Elleinstein’s case that there was cooperation because it explicitly highlights the use of violence to subjugate the peasants and the results if they resisted. His interview can be considered credible since he referred to himself an as “old Bolshevik,” and told how he “worked in the underground against the Tsar,” and “fought in the civil war,” therefore his ideology would have been of a true Bolshevik and despite remaining in the Party under Stalin would give a true representation of the events that occurred. In addition, the number of organised rural mass disturbances increased from 172 for the first half of 1929 to 229 for the second half which corroborates the source since he was referring to the execurtion. Therefore, there is little support for Elleinstein’s argument and for the cooperation between the peasants and the Bolshevik but were more Methods that cannot be justified regardless of achieving a collectivised countryside. Further support of the unacceptable human cost of the policies implemented has been suggested by Perry who argued that the achievements cannot be justified since the policies Stalin implemented had a cost to human life that was too significant. Perry argues that collectivisation resulted in, “a tragedy for Russia… and Stalin, ignorant on economic matters, launched policies which brought about disaster,” regarding to the millions of lives that were ruined and lost as a result of the policy which cannot be justfied. There is significant credibility to Perry’s interpretation that is demonstrated by the adverse impacts of collectivisation, which led to famine in 1932. In particular, the Holodomor crisis was a result of Stalin imposing a man-made famine on the country by excessive requisitioning of grain which resulted in mass starvation with deaths maximising at 25,000 per day and Ukraine’s population fell by 25%. This shows the severe loss of life that was caused by requisitioning to achieve higher grain yields. Perry’s interpretation is corroborated by an examination of Nina Lugovskaia’s experience during the crisis. She described how the Bolsheviks couldn’t “clear all the