%0 Journal Article
%T Assume the Positional: Comment on Robert Frank
%A ANDREW KASHDAN
%A DANIEL B. KLEIN
%J Econ Journal Watch
%D 2006
%I Institute of Spontaneous Order Economics
%X We examine Robert Frank¡¯s arguments for taxation to mitigate positional externalities. The scarcity that characterizes positional goods is real, but various mechanisms reduce the potential waste, and Frank overstates the case for a governmental solution. The plausibility of Frank¡¯s arguments for extensive market failure requires various assumptions, including the usefulness of happiness comparisons over time, the widespread existence of winner-take-all markets, the failure of voluntary evolution to internalize externalities, and that both ¡°leisure¡± and governmental activities are significantly less positional than the full-range of activities Frank proposes to tax. Each assumption is shaky. Frank¡¯s policy solutions overlook standard public choice arguments against government expansion and shrug off the Smithian burden of proof incumbent on those proposing coercion.
%K Positional goods
%K positional arms race
%K leisure
%K taxation
%K happiness
%U http://www.econjournalwatch.org/pdf/KashdanKleinCommentSeptember2006.pdf