Friday, May 29, 2009

Opposite of repugnance: Protected transactions

I've been thinking lately about transactions that are the opposite of repugnant, i.e. transactions that, as a society, we often seek to promote, for reasons other than efficiency or pure political expediency.

In yesterday's post I mentioned monogamous marriage between a man and a woman, which in many countries and U.S. states is promoted over other forms of marriage (such as polygamy or same sex marriage).

Home ownership in the US is an obvious one, in this post-housing-bubble financial crisis, in which there have been Federal bailouts of the various Government Sponsored Entities like Fanny Mae and Freddy Mac, set up to promote home ownership.

Food production by small farmers, not only in the US, but also in Europe and Japan: we protect this by subsidies, price supports, government supported crop insurance programs, etc.

Fishing by small fishing boats: if we were only interested in protecting fish to keep fisheries sustainable, we might regulate fisheries by imposing seasonal limits on how much could be caught. But in many cases we also set daily limits (e.g. some fishermen on Cape Cod are limited to catch no more than 400lbs of scallops a day). This makes large, factory fishing uneconomical, and protects small local fishermen.

The right to purchase guns probably falls into this category in the U.S.

Of course, as with repugnant transactions, protected transactions may involve a lot of complications, like providing public goods and protecting rights. But it may be that to better understand which kinds of transactions may come to be regarded as repugnant, it will help to understand which kinds of transactions are sometimes protected.

Update: looking at the comments, commuting alone in a car seems worth including on the list of protected transactions in the U.S. (And thank you to Dubner at Freakonomics for his generous plug of this blog...)

35 comments:

Morten said...

Not sure why you limit this to small farmers. Aren't BIG farmers hugely subsidised?

Donating to charity is pretty protected in many countries. Education also springs to mind.

mok said...

How about protected transactions in labor markets: hiring the disabled, hiring veterans, hiring people trying to make their way back into society after prison, hiring members of historically underrepresented groups.

Sir Nicholai said...

How is the right to purchase guns a preferred transaction?
I realize there are steps taken to keep it available to people, but it's much harder than it would be in an unrestricted market, there are background checks and necessary special ID cards and licenses...it seems that the transaction is not subsidized in any way, and is actually discouraged by red tape.

Please elaborate on how the government promotes the sale of firearms in any way.

btw: the other examples were spot on, and interesting. Followup question: Do they provide enough of a societal benefit to be worth subsidizing?

Danielandthemitochondria said...

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Chuck W said...

How about two more: encouraging people to use fossil fuel, by removing many of the expenses associated with using fossil fuel from the price paid by the consumer; encouraging people to travel by car, by using significant sums of taxpayer money on road repair/construction/maintenance while labeling the comparatively small amount alloted to rail as a "subsidy."

Clarification on farm policy: as a small-scale, organic farmer in Vermont, I take advantage of every State and Federal farm-support program available to me. Which is to say, none. While EU tax policies may support small farms, American tax policies do not. The programs listed are only available to largest US farms growing a very small number of 'preferred' crops.

The only tax break we have available is a reduction in our local property tax burden because we have agreed not to develop the land for housing or industry. I view this more as a response to another of your protected transactions - single-family homeownership - than as a subsidy. Farmland nationwide consumes only 20 cents per tax dollar paid, while a single-family house typically costs $1.10 to $1.20 per tax dollar paid in.

mok said...

Ahh, just thought of another example, which has gotten increasing attention in recent years: the "buying local" movement.

Professor Tex said...

Twinkies, et al. Clearly foods with high fat and sugar content should be taxed at much higher rates than healthier food.

wtanaka said...

None of those non-gun examples have anything as literal as the second amendment mentioning them in the Constitution, do they?

matt said...

This is a good way to introduce "reality" to people who think our current economic models are sufficient to describe the interactions of humans with external reality--if any of those people remain.

To start, the the word "efficiency" requires a specific context from which it can be interpreted. Efficiency means savings, and it all depends on what it is that's being saved. Say I want to be efficient so i drive to work, however that is inefficient in terms of my health, or in terms of the environment. It is only efficient in terms of time I save in a given day--a very short-term application of efficiency. So our short-term desire (which represents the vast majority of our economy, ever) is at odds with the requirements of reality.

Everything people vaguely grasp that seems to have value but just not of the immediate and personally gratifying variety defines our clumsy notion of ethics. This post, in listing various examples of this, is itself an example of our dependence on abstracting the vaster reality in order to create a sense of cohesion in our own minds and as a society: creating lists.

Our economic system requires the itemization of reality--wages per hour, cost per pound, what we want at a given moment in time--to function at all. Viewing reality through this spectrum, as we have done forever, is fundamentally flawed as it is an inaccurate model of reality because of all the things that are inherently un-itemizable or unable to be bought and sold as an item (each breath for instance). Hence the revenge of the "externalities".

Hugeness said...

The entire system of liquor sales in PA is a protected transaction. Without going into too much detail, cases of beer can only be bought at certain places, six packs can only be bought at certain other places (and only in limited quantities, no doubt to add to the protection of the case sellers) wine and actual liquor can only be bought in state owned and operated stores.

It's fun to explain that to people that move in from out of state.

John Langlois said...

Manned space flight put many lives at risk unnecessarily.

Anonymous said...

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Vanessa said...

Because of the law, the complainants said, they were excluded from using Union benefits that opposite-sex couples can obtain, including health insurance programs for federal employees, retirement and survivor benefits under the Social Security Act, and the ability to file joint federal income tax returns.

Anonymous said...

Not sure what repugnance has to do with this...
- Los Angeles Public Relations on behalf of Bridges To Recovery and Power Plate

Sildenafil Citrate said...

the topic about the monogamous marriage and the opposite polygamy or same sex marriage is a cultural issue and we have to analyze the topic from that point of view!

Ulf said...

Great article thanks.

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prolanguage said...
This comment has been removed by the author.
Novoline said...

Just buy local guys and support your city instead of your country - better for all.

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Chuck Rifle said...

Wise words, I think you pretty much pointed out the most important facts. Protection isn't repression!

Lena said...

Very interesting and good writing!

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interesting article.

Investigation Services said...

Great post. I think one of the basic things that we should know know is that we must always make sure that you are safe in every transactions you wanted to indulge with.

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Jokers Cap said...

Not sure why you limit this to small farmers. Aren't BIG farmers hugely subsidised?

Donating to charity is pretty protected in many countries. Education also springs to mind.

Because he CAN?!

Camille said...

The author has definitely showed expertise on this article. Surely emphasized important preferred transactions, but I was just wondering about the right to purchase guns. Thanks for the blog!

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