"The notion that our productivity problems reside in "the spirit of entrepreneurship" that waxes and wanes for unexplained reasons is a counsel of despair, for it gives no guidance on how to reawaken that spirit once it has lagged"

“There seems to be a general consensus among informed observers that genuine cases of predation are very rare birds.”

“This book is... devoted to the study of economic policies to enhance the quality of life. Our willingness to embark on so considerable a subject only reflects our conviction that economists as a body have already made sufficient headway on these problems to make such an undertaking worthwhile.”

“In order for a writer to produce something which is original and correct, it is not absolutely necessary that his predecessors have been wrong.”

“We cannot simply rely on a program of pollution abatement in country A for this would impose costs on A with no offsetting benefits to the polluting country. The OECD’s Polluter-Pays-Principle is thus inconsistent with our insistence on a Pareto improvement. Mutual gains to the countries necessarily require the victim country B to make some payments to A.”

“When the “environmental revolution” arrived in the 1960s, economists were ready and waiting. The economic literature contained an apparently coherent view of the nature of the pollution problem together with a compelling set of implications for public policy. In short, economists saw the problem of environmental degradation as one in which economic agents imposed external costs upon society at large in the form of pollution. With no “prices” to provide the proper incentives for reduction of polluting activities, the inevitable result was excessive demands on the assimilative capacity of the environment. The obvious solution to the problem was to place an appropriate “price,” in this case a tax, on polluting activities so as to internalize the social costs. Marshall and Pigou had suggested such measures many decades earlier. Moreover, pollution and its control through so-called Pigouvian taxes had become a standard textbook case of the application of the principles of microeconomic theory. Economists were thus ready to provide counsel to policy makers on the design of environmental policy.”

“The price-tax conditions necessary to sustain the Pareto optimality of a competitive market solution under the assumed convexity conditions are tantamount to standard Pigovian rules, with neither taxes imposed upon, nor compensation paid to, the victims of externalities.”