Some Fallacies in the Interpretation of Social Cost

  title={Some Fallacies in the Interpretation of Social Cost},
  author={Frank Hyneman Knight},
  journal={Quarterly Journal of Economics},
  • F. Knight
  • Published 1 August 1924
  • Economics
  • Quarterly Journal of Economics
Arguments for social interference developed by Pigou and Graham illustrate common misinterpretations of the meaning of cost and its variation with output, 582. — I. The private owner of a natural opportunity secures maximum return from it by charging that rent which halts the application of investment at the point which is socially most advantageous, 584. — II. The notion of decreasing cost is a fallacy; competitive price fixation under decreasing cost or increasing returns an impossible… 
The cost controversy: Pigouvian economics in disequilibrium
The standard treatment traces the relation between a firm's costs and output to Jacob Viner's seminal article in 1931. This glosses over the importance of the cost controversy a by-product of which
A theory of jointness and infeasibility of exclusion
ing from distributional considerations, the term "ideal cooperation" can be viewed as being synonymous with "Pareto optimality.As is well known by economists, one cause of failure to achieve Pareto
Majoritarian Management of the Commons
This article analyzes usage of a common property resource, "the commons," under collectivization as compared with more familiar privatization institutional arrangements. Particular emphasis is on
On Coaseana: Critique of a Political Economy
Ronald H. Coase’s article of 1960, “The Problem of Social Cost,” sketched a program for economic policy analysis based on three assumptions. (1) A Total Output Premise: the objective of economic
Some Implications of Recognition of Property Right Transactions Costs
The list of fields of economics in the Directory of the American Economic Association contains no references to transactions costs or to property, despite much recent interest and research in that
Tragedy of the Commons: Efficiency Rents to the Rescue of Free-Road Inefficiencies and Paradoxes
If lands are available to all, people under push-shove equilibrium will allocate themselves among different acres to equalize average rather than marginal labour productivities. By contrast, if the
Appropriation and Efficiency: A Revision of the First Theorem of Welfare Economics
The first theorem of welfare economics rests on the assumption that individuals have neither price-making nor market-making capacities. The authors offer a revision in which individuals have such
Private Property Rights, Government Interventionism and Welfare Economics
Abstract We develop a critique of government interventionism based on the Misesian calculation argument against socialism. If private property rights and relative prices based on supply and demand
“Exceptional and Unimportant”?
The notion of a Pigovian tradition in externality theory, against which Ronald Coase and others reacted beginning in the 1960s, has a long history. This article, though, suggests that the literature
Taxation: The Lost History
Regular, periodic taxation is a function of modern government, a practice that arose only because the rent of land and natural resources was transformed from the traditional source of public revenue