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On October 20th, Harvard Economist Gregory Mankew published the Pigu Club Manifesto on his blog.

Pigovian taxes are named after English economist Arthur Pigu, who pioneered welfare economics and

develop the concept of taxation to correct externalities.

Since Manke's manifesto, a number of noted economists, academics, and pundits have signed on,

including Gary Becker, Richard Posner, Alan Greenspan, David Fromm, Ken Rogoff,

Lawrence Summers, Andrew Sullivan, and John Tierney.

The backlash against the Pagu Club started on Facebook,

where the No Pagu Club garnered the attention of The Economist magazine.

So what is the hoopla all about?

Cato Senior Fellow and editor of Regulation magazine Peter Van Doren explains.

What are some of the costs associated with driving?

Economists argue that local pollution, global warming pollution, congestion, and the unpaid

costs of accidents, auto accidents, are properly referred to as auto externalities.

And where do you fall in the Pygovian tax debate that Greg Manke you outlined on his blog?

Well, normally economists argue that when there aren't explicit markets for something

and there aren't explicit prices for something, that the role of government is to

mimic what a market would do and impose a price on something that ought to have a price.

In principle at Cato, we're not actually disagreeing with that.

We're not in favor of unpriced things.

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