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Vaniver comments on How should negative externalities be handled? (Warning: politics) - Less Wrong Discussion
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Not necessarily; the subsidies have to come from somewhere. (I should also point out that I'm making a somewhat technical point, here, and so unless you can sketch the curves involved we may be talking about different things.)
Yeah, we're talking about very slightly different things - I was ignoring the opportunity cost of the subsidy in my mental model. Whether or not subsidizing an efficiency improvement benefits standard-of-living (compared to alternative uses of that money) depends entirely on the relative cost of that subsidy.