A Very Pigouvian Christmas

If there’s an economic concept that can’t be explained through Dr. Seuss it’s not worth explaining. From here, inspired by this:

How the Grinch Stole Christmas

Every Who down in Whoville liked Christmas a lot.

But the Grinch, who lived just north of Whoville, DID NOT.

He stood and he hated the Whos and their noise

He hated the shrieks of the Who girls and boys

For fifty-three years he’d put up with it now—

He had to stop Christmas from coming, somehow.

He asked and he questioned the whole thing’s legality

Then his eyes brightened: he screamed “externality!”

He reached for his textbooks; he knew what to do

He’d fight them with ideas from A.C. Pigou


This idea has merit, he thought in the frost

A tax that was equal to external cost

At the margin, would give all the Who girls and boys

An incentive to stop all their screaming and noise

Failing that, an injunction to make them all cease

And they’d have to pay him to have their Roast Beast.

Low costs of transacting meant that if the Whos

Were the high-value users and wanted to use

All the rights to have feasts and the rights to sing songs

Then they’d have to buy them, to right their Who wrongs

They’d buy a noise easement, if they wished to sing

Until then, the Grinch could stop the whole thing.

On Christmas Eve Night, the Grinch went to town

He stole all the presents, he took their wreaths down

He stole their Who Hash, everything for their feast!

He swiped their Who Pudding!  He swiped their Roast Beast!

He looked at his sled loaded up with Who snacks

‘Twas quite an efficient Pigovian tax!

Then late in the night, when he got to Mount Crumpit

For he’d taken the load, and he threatened to dump it

The Whos, with one voice crying out in the night

Screamed “bring back our stuff!  You haven’t the right!

“We know that we’re noisy all through Christmas Day,

But if you don’t like it, it’s you who should pay!

“For we were here first, and homesteaded the rights

To sing, to make noise, and to hang Christmas lights

“The costs of our Christmas joy helped you to save!

They were fully reflected in the price of your cave!”

“We’ll all be good neighbors, and we’ll be polite

“But you’ve done us wrong on this Christmas Eve Night!”

The Grinch was crestfallen, he knew he had lost

For he was the source of the “external” cost

He’d come to the nuisance, and yes, he was wrong

He’d now have to live with their noise and their songs

He realized that day, though, that they could be friends

His heart grew three sizes (you know how this ends)

The Whos asked the Grinch to join them in their feast

And he—he, the Grinch—carved the Roast Beast.

The holiday season brings specials galore

They teach us that Christmas can’t come from a store

Reflect, as you watch them, as day turns to night

On good economics, and property rights.

3 thoughts on “A Very Pigouvian Christmas

  1. Bah, humbug.

    And I mean that – this cant the Whos are spouting in this shoddy pastiche is sheer humbug. At least the original didn’t descend to that but put its emotional stance plainly, without hypocrisy.

    The Grinch did not come to the nuisance, he fled it (to the cave), only to have it follow him as a new generation arose; a new generation that is plain lying when it – younger by far than him – claims to have been there first. Nor is it a true and fair claim that the Whos’ nuisance reduced the cost of his cave to him, since he homesteaded it, and not nowise, not nohow, did their nuisance reduce any payment he made for it – since he never bought it but wrought it. To top it all, their humbug has achieved bullshit baffling brains, and has deceived the Grinch and defrauded him into submitting to their oppressive social pressure that has deprived him of the quiet enjoyment of his own property – very different in this pastiche from the original, in which the Whos made a fair representation of their situation and he fairly responded to it with a true assessment of the situation as he came to see it.

    This canting humbug of a poem is no defence of property at all but of socialism encroaching under property’s fair cloak, “an evil thing with a holy name” as the USA described Woodrow Wilson’s scheme to submit to a League of Nations.

  2. Not sure about the Grinch, but the Department of Transport has ruined it for one of the local Lions Clubs:

    Rainbow Beach Lions Club president Rex Bright, the Department of Transport and Main Roads has stolen the Christmas spirit.

    Mr Bright said a large banner advertising the club’s annual Christmas Parade and Carols by Candlelight put up at a picnic area on the corner of Tin Can Bay and Rainbow Beach Roads was chopped down by the department despite appeals by the club, the council and Gympie MP David Gibson that it should stay.

  3. PML – what you say sounds pretty spot on to me. It accords with my understanding of the Grinch story and basic property tights.

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