For the sake of efficiency: road metering.

There used to be public unmetered water supply in our country. Everybody paid a lump sum (with the assumption of using “x” quantity of water every month).

Then, authorities have introduced water maters, and it turned out people only need half of the water previously assumed. Metering on the individual household level turned out to increase efficiency, and decrease usages, thus making the cost of water smaller for everybody but the moonshiners.

Then why do we have to only approximately calculate road use? We of course do have road tax in fuels, but that’s not an exact measure of neither miles driven, nor congestion created, nor pollution.

Miles driven are not calculated exactly via road tax, because someone with a more efficient car drives for less road tax paid.

Congestion is not measured, because fuel tax is not dependent on the road chosen, or the time of day chosen for driving.

Pollution also is not measured well, as there are more and less polluting vehicles, and driving in the city causes disproportionately more external health effects than country driving.

To better incentivise efficient road traffic, and lessen the public burden of subsidized driving, we should tax drivers of vehicles by measuring how they move trough the City. Instead of fuel tax, which is not just, we would propose recording license plates every time a car moves through a given road or crossing.

Will that be costly? Of course it will. Someone must build the system. But once deployed, it allows cities and states more efficient and just transportation systems, and more revenue, via the following mechanisms:

  1. Some traffic will switch hours. While rush hours such as 7:00-8:00 will still be occupied heavily, some people will be able to drive to work at 6:00 or 9:00, and save money in the process.
  2. Air pollution will at least be compensated. Vehicles with worse emissions will drive less, because it will cost more to drive them. Road owners (state or private) will be able to pay property owners in the vicinity for pollution damages.
  3. Country dwellers will fairly pay less road tax, as they only use highways, which are separated from inhabited areas. City dwellers will rightly pay more for driving and parking.
  4. Metering vehicle use allows road departments to raise more money. There will be less need for income tax, value added tax, excise tax and other unfair taxes. People will pay because they use infrastructure, not because they work or consume.
  5. It allows high-quality private roads to be built and maintained. Road owners will no longer be discouraged by “free” competition from the state (dumping).
  6. Bridges and other bottlenecks could be priced more. This will encourage ride-sharing, and public transportation, especially if heavy traffic is in place. If pricing is set right, it will also encourage cycling or walking.
  7. By strictly measuring traffic and traffic-relating pollution society will see roads as a profit and loss generating service… not as something absolutely necessary everywhere. It will promote living in denser cities by reducing cost. It will promote higher buildings. And most importantly, even if roads stay in the hands of the government, they will be seen more as a private firms, profitable if they attract customers, and accountable if their customers pollute too much with gases, particulates and sound waves.
  8. Pricing road traffic is a great chance for other means of transportation. It will promote railways, buses, or even automated inter-city gliders operated with electric glider winches… which too stand no chance if subsidized competition is in place.

So… if metering water could reduce it’s usage and cost, why not try it with public roads?

Environmental impact of cryptocurrencies.

Critics state that Bitcoin mining, being an energy hog, is a terrible thing to the global economy, because electricity is a vital resource that could be used for a better end… and because carbon emissions are not ethical, as they change the Earth’s climate unfavourably.

But let’s not forget the fundamentals of economics. Such a high energy consumption is only possible because of speculative value of cryptocurrencies. It’s value is derived from their superiority to traditional money and banking system:

  1. Political independence, payment channels which cannot be blocked by government, which promotes economic freedom and has potential to starve crony capitalism.
  2. Convenience, no need to transport money physically with use of heavily armored vehicles… no need to go to ATM to get cash. No advertising from Bank.
  3. No need for brick-and-mortar banks, no need to hire bank clerks, which is a waste human capital.
  4. Promotion of saving over spending. Potential ability to stop inflation, which in turn forces people to invest more into real estate, which costs much energy to build and maintain.
  5. Cost saving, because money can be cheaply sent worldwide. Of course Bitcoin network is a bit expensive now, but there are many alternatives to Bitcoin (such as Bitcoin Cash, Ethereum, Dash, Litecoin) with superior characteristics in terms of transaction cost… and potential to scale massively with no greater energy cost.
  6. Increased competition and access to global markets. Creative freelancers from around the world could now work for everybody in the global economy, just by using a computer. Private payment option allows an unprecedented freedom.

There are some drawbacks of course, which socialists and democrats like to point. Firstly, financial freedom allows people to freely support terrorist groups. But should that be the domain of blocking? In my opinion no… governments should rather inoculate people to dangerous ideas, educate, promote productivity and track actual bandits, than try to starve them financially. A criminal should be certain that he will get prosecuted in 100% of cases (because of cameras etc.) not blocked from having a gun and money.

Some say that trade sanctions are needed to promote a fair world, where rouge states don’t get to trade with the “noble” West, such as EU or NATO. But is that really an average Russian’s fault, that he or she lives under an authoritary government? Is this an African’s fault? No… rather I feel these people will behave nicer if allowed to trade and earn money by selling services to us. Starving people only promotes passivity and allows wrong systems to persist.

Then there’s a question of the environment. Firstly, the States that want to shut down cryptocurrencies have invested heavily in coal-powered generation themselves. They have subsidised energy, to let people run various industries, and then… if energy goes to Bitcoin they are upset about it’s environmental impact. Seriously? Better think of ways to account for CO2 and pollutants from the energy you produce. Higher energy price, ability to trade it freely, and demand from crypto miners can only help promote building of PV, wind and water-based generators. Energy market is not innovative partly because of administrative overhead of trading energy. Not because of lack of technical means of generating and storing them…

Energy will be even more sustainable, if you allow people to trade it between neighbors. Right now you cannot just sell electric current to a neighbor, or to a local factory. You need to sell it to a monopoly first.

And finally, energy usage will have to be more in proportion to transaction volume if cryptocurrency inflation decreases with time. Bitcoin has a cap o 21 million units, and there will be never more Bitcoins than that. Now it’s energy use is high due to the simple formula:

MINING REWARDS = VALUE * (INFLATION + TRANSACTION FEES)

But as soon as inflation decreases and only transaction fees drive miner’s rewards, energy cost will have to be in proportion to it.

But you ask, how about energy poverty? How about people that cannot afford some electricity? Well… they do have to pay for monopolies currently anyway. And they do pay consumption taxes even for goods that don’t have many adverse environmental effects. And they do pay for bank fees, if they have an account.

And they cannot just produce goods and services for a populace. I would like to have my relatively poor neighbor to cook some food for me. Or to sell me wine, beer and other drugs. Or even go to the local wholesale grocery market, and sell some fruit/vegetables on the street as they used to do in the good old times. But now they cannot. You can park hundreds of idle cars in the street, but if you try to sell something from a van without a license – you will get a fine. Especially if you don’t want to pay taxes for that sale.

They get a welfare benefit if they are really poor, but as soon as they earn some money, they not only must legally stop getting benefits, they will get taxed. Especially if they try to work as an independent business, they will have to pay relatively high social security contribution, regardless of the profit they have. Despite theoretically progressive tax system.

What a sad world, which fights merit and production, but promotes cronyism, idleness and inflation.

Economics of tree ownership under socialist regime.

Socialist states care for the environment, if private owners can bear the cost. Rightly they want to protect nature, but unfortunately using coercive means.

If you inherit a parcel with trees, or if you allow trees to grow, you cannot just cut them down. You need consent from your local authorities. Even if it’s quick and cheap to obtain, it’s still mandatory or you can get a fine for cutting down your own tree.

That’s because having a tree in the immediate environment is advantageous to the society as a whole. Trees protect people against dust and gases, accumulate water, regulate temperature, and allow life of worms, birds and other animals.

So it’s fair to incentivise tree ownership… but it’s not fair to punish people for getting rid of one’s private tree! A better approach would be to compensate those that own trees, because they are environmentally productive. But how can we do that without coercing the rest of populace to pay more taxes?

Simply by accounting for positive environmental effects of trees as dust/smoke collectors, and taking that money away from polluters. It will provide incentive to plant trees and clean the air, as well as incentive to mitigate pollution on the polluters side. It will also improve public health, and lessen direct damages to health, because dust (and money) will from from polluters to the owners of trees (instead of only from polluters to the owners of lungs).

Freedom to plant and cut down trees is always good. Biomass is a great source of energy. But disallowing someone to cut down a tree is invasion of property. Even if property is prettier due to this invasion… how would you feel being forced to exercise, or to a plastic surgery, or to collect trash from the streets?

I would feel bad… innocent people should not be forced to do anything.