> Then there is a third effect, which is the superiority of point to point designs. Miami Beach was developed in the 30s and 40s because some developers saw its potential as a great beach destination. But it was only with plane flight that the rest of the nation had a chance to enjoy it. Or Las Vegas, another center that sprang out of nowhere.
I don't think that these are particularly good examples for you to cite. Neither Vegas nor MB developed under the wing (so to speak) of air travel, but rather the interstate system. Air travel made them more accessible and accelerated their growth, but it was not responsible for their development, and the many folks who visited either of them in the 40s, 50s, 60s and 70s without flying would likely not say that they could not enjoy them without planes.
In addition, although it's clear that Miami Beach and Vegas have benefitted from cheap flights, that doesn't mean that the net result for the country (let alone world) as a whole is positive.
> Even if you never buy a foreign good, the fact that a good was brought in will lower the price and raise the quality of the domestic good you do buy.
This sounds like an incredibly hand-wavy claim, and also easily refuted as a general rule. The easy (flight-based) import of foreign goods has, in many cases, led the complete decimation of various US manufacturing sectors. If you hadn't noticed there are essentially no mass-market US electronics companies any more, very few clothes manufacturing companies, and in many manufacturing sectors that do still nominally exist as US companies, their factories are no longer US based. It's false to lay this all at the feet of relatively cheap air freight, but it certainly plays a role, and refutes your overly broad claim that "Anything that lowers the price of bringing in that good will have a huge positive effect on the economy."
> Anything that makes the world smaller generally has big positive effects.
Yes, the positive effects are well known and oft-discussed. The negative effects are less well known, less researched and rarely discussed. This means that it's hard to have a well-informed discussion about the balance between the two.
> In addition, although it's clear that Miami Beach and Vegas have benefitted from cheap flights,
Yes, I am not saying that air travel created Miami Beach, but that Miami Beach benefits from it. This is the definition of an economic externality. We are counting the financial benefit or spillover of some technology, meaning the extra value-add created beyond the purchase of the plane ticket itself. For flight, it's huge.
Then there is a switch to a different argument:
> that doesn't mean that the net result for the country (let alone world) as a whole is positive.
This is not an economic argument. Perhaps a moral argument - it's not clear, as no details were provided. But speculating as to whether some value-add spillovers should or should not be present is not how we count externalities in a pigovian tax. It seems what you want is a sin tax for flight, which is not a pigovian tax.
In fact most people, when they use words like "externalities", actually want sin taxes. They are not trying to come up with some objective measure of economic value-add spillover effects. And that's fine -- we have lots of sin taxes in the world, but then advocacy for them should be honestly labelled as such.
> This sounds like an incredibly hand-wavy claim, and also easily refuted as a general rule. The easy (flight-based) import of foreign goods has, in many cases, led the complete decimation of various US manufacturing sectors.
Now is not the time to get into a debate about trade theory, but suffice it to say that I disagree. Trade is great. Deficits are not great. You can have lots of trade without trade deficits, and trade is welfare improving. If you want to stop trade deficits, then add a tax to net foreign capital flows, not cross border flows of goods and services. But on this point we just have to agree to disagree.
> > that doesn't mean that the net result for the country (let alone world) as a whole is positive.
> This is not an economic argument. Perhaps a moral argument - it's not clear, as no details were provided. But speculating as to whether some value-add spillovers should or should not be present is not how we count externalities in a pigovian tax. It seems what you want is a sin tax for flight, which is not a pigovian tax.
It's not necessarily a moral or an economic argument alone, though it could be. For example, perhaps the massive shift in summer vacation travel from all points of the US towards FL was (while very good economically good for FL) both bad economically for the rest of the country and created substantial externalities within FL itself (environmental, social etc.)
Comparing these costs and benefits can't be done in a value-free way, which means that establishing the overall cost/benefit is not likely to be a task that will lead to a consensus outcome.
> For example, perhaps the massive shift in summer vacation travel from all points of the US towards FL was (while very good economically good for FL) both bad economically for the rest of the country and created substantial externalities within FL itself (environmental, social etc.)
When I said an "increase" in value add, I meant an economy-wide increase in value-add, so the argument of taking business away from other tourist destinations doesn't apply.
If you want to claim there is some economic loss as a result of "social losses", then you need to again demonstrate that loss in terms of economic value-add and it will roll up to the economy-wide value add figure above, otherwise we have once again left pigovian territory and are back in "sin tax" land.
Transportation just has huge positive externalities, and I don't see any of them being entered into the equations when claiming that more taxes are warranted because of externalities.
I don't think that these are particularly good examples for you to cite. Neither Vegas nor MB developed under the wing (so to speak) of air travel, but rather the interstate system. Air travel made them more accessible and accelerated their growth, but it was not responsible for their development, and the many folks who visited either of them in the 40s, 50s, 60s and 70s without flying would likely not say that they could not enjoy them without planes.
In addition, although it's clear that Miami Beach and Vegas have benefitted from cheap flights, that doesn't mean that the net result for the country (let alone world) as a whole is positive.
> Even if you never buy a foreign good, the fact that a good was brought in will lower the price and raise the quality of the domestic good you do buy.
This sounds like an incredibly hand-wavy claim, and also easily refuted as a general rule. The easy (flight-based) import of foreign goods has, in many cases, led the complete decimation of various US manufacturing sectors. If you hadn't noticed there are essentially no mass-market US electronics companies any more, very few clothes manufacturing companies, and in many manufacturing sectors that do still nominally exist as US companies, their factories are no longer US based. It's false to lay this all at the feet of relatively cheap air freight, but it certainly plays a role, and refutes your overly broad claim that "Anything that lowers the price of bringing in that good will have a huge positive effect on the economy."
> Anything that makes the world smaller generally has big positive effects.
Yes, the positive effects are well known and oft-discussed. The negative effects are less well known, less researched and rarely discussed. This means that it's hard to have a well-informed discussion about the balance between the two.