Another lengthy analysis of my placard that misses the point, insults my character, and generally engages in strawman argumentation. I don't really think it's worth reading, but I'm posting a copy of my reply here for easy reference should I need it. At least the author was nice enough to email me and ask whether I'd like to respond.
Dear Mr O'Neill,
Thank you for bringing your article to my attention (I am the author of the sign in question).
Your analysis is cogent, coherent, and well written. Indeed, I have no truck with its main argument: that this graph cannot justify the mechanism of pricing a good with a negative externality. However, as I have commented on other analyses of my sign, that was never the point.
My sign was inspired by repeated exposure to people who didn't understand how taxing a good (service) and then returning the revenue in compensation could change behaviour; it is a graphical representation of the principle of changed relative prices – no more, no less. It was tongue in cheek, served as a basis of discussion with other rally attendees, and was a reminder of the role of economics in the carbon pricing debate.
In this context (as a partial equilibrium result), the sign is utterly unremarkable and – unless you wish to challenge basic microeconomics – difficult to dispute. Even libertarian/centre-right economists such as Sinclair Davidson recognise that: http://catallaxyfiles.com/2011/06/07/carbon-compensation-it-works-bitches-in-theory/
Let me repeat: your analysis is correct in its criticism of what you suggest is the purpose of the sign. However, that is not and was not its actual purpose.
Your post has indeed exposed a fallacy, but it has been the fallacy of arguing against a strawman. Your attacks against my intentions and character were uncalled for.
Sincerely,
Martin C. Jones
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