The observation of social phenomena, sometimes apparently innocuous ones, can help confirm theories of society or invalidate them. I found an interesting story about residential generators in Kris Frieswick, “Your Generator Is Noisy as Hell. But Your Neighbors Don’t Have to Hate You for It,” Wall Street Journal, July 18, 2024.
A residential generator is useful during a power outage, and close to essential if you are working from home. Properly speaking, no single good is literally “essential” as substitution possibilities always exist. One can bring his laptop to work in whatever coffee house or eating joint still has power and offers power outlets. But for many, nothing beats a residential generator.
Indeed, many American households own one, portable or standby. Those who don’t obviously made different trade-offs for reasons revolving around personal preferences, prices, and incomes. Not many households in America would find it very difficult to sacrifice some other consumption goods, services, or activities to purchase one, even if its connection to the house electric system will add at least $1,000. Most people elsewhere in the world don’t have these opportunities, and it is not because of capitalist exploitation!
In rich countries and places with high population densities, residential generators are sometimes difficult to use. I suppose that most landlords do not accept generators on apartment balconies. They remain useful in isolated areas and in neighborhoods of single-family houses or duplexes.
One problem, which is the topic of the WSJ story, is that the noise of a running generator may annoy neighbors. Perhaps envy reduces the tolerance of those who are stuck in dark houses with no heat (or air conditioning), and no power for the freezer, dishwasher, and so forth. But in a free or more or less free society, a generator’s owner will reason that he is on his own property; his neighbors will normally understand that too. The noise can be considered an externality (perhaps) if outages happen often or when they last a long time. Otherwise, it will not be unexpected—contrary to, say, mowing the lawn at night, which would be a real nuisance. Moreover, except if your neighbors are really close or live in a tent, the noise is supportable, even for the generator’s owner who hears it from much closer.
We see that private property accomplishes its function of minimizing conflicts and facilitating life in society. In my Maine suburb, it would be surprising if a neighbor complained about a generator’s noise during a power outage. In fact, I had never heard about this possibility until I read the WSJ story.
Now, if some neighbors are upset, the generator owner can compensate them, even if indirectly. The journalist writes:
Lastly, work some bribery! During outages, offer to refrigerate your neighbors’ frozen steaks and ice cream. Put a power strip on your deck so people can charge their devices. Share your wifi password. In prolonged outages, give away ice. Have a movie night. The longer the outage, the more valuable these gestures will become. If the outage goes on long enough, your neighbors may grow to enjoy the sound of your generator, knowing they can sign into your wifi and download some eps of “Frasier.”
What is interesting with these suggestions is that they represent normal behavior in a commercially-minded and free (or rather more than less free) society, where everybody is accustomed to free exchange and voluntary cooperation. When it violates no contract or major convention, a “bribe” works just like the price in an ordinary exchange. (On conventions, see Anthony de Jasay’s Against Politics, especially Chapter 9.) Similarly, we can view every price in an exchange without fraud as an honest bribe. A bribe is more civilized and more efficient (in the economic sense) than a jail or fine threat or a boot kick.
READER COMMENTS
nobody.really
Jul 26 2024 at 11:05am
Good, plausible example (even if hypothetical) of neighbor-to-neighbor “negotiation” to address a noise externality.
While this was not your point: My generator can only function for as long as I have fuel. If my blackout is large enough to affect my local gas stations, then a generator will do me little good. And if it isn’t, then there’s a fair argument that I’m better off investing in a night at the motel than in buying/installing/maintaining/stockpiling fuel for a generator.
I might derive some energy from solar panels/wind turbines (and perhaps a battery) without stockpiling fuel—but I understand that most rooftop solar operations are not designed for this; instead, most are designed to pump electricity onto the grid.
Craig
Jul 26 2024 at 12:38pm
In SoFlo all the ‘cool’ kids got one.
Jon Murphy
Jul 26 2024 at 12:49pm
This is a perfect example of a situation where an externality is often just assumed to be rather than any empirical investigation as to whether or not it is; the poor analyst would simply say “look, there is no monetary price on the noise, therefore the noise is over-produced.”
But there is a whole social convention around the supposed externality. In this case, and indeed in many cases involving alleged externalities, some sort of intervention would make the market suboptimal rather than optimizing.
Of course, one could respond that all a good analyst would need to do is to examine these conventions, and thus my point here is irrelevant. But given such analysis is explicitly rejected by most mainstream economists and ignored in all calls for Pigouvian taxes, I’d say that my point is extremely relevant.
Craig
Jul 26 2024 at 3:03pm
States vary of course on this, NJ the general standard is 50 decibels at night, 65 during the day and in the grand scheme of things noise nuisances are a relatively complex set of statutes containing within them exceptions. I just happen to have some familiarity NJ’s because in the US’ most densely populated state, I can assure you that noise generates a fair amount of complaints. Nevertheless with respect to generators the average residential generator will produce decibels well over the 50 decibel limit at night and a quick search says they generate 60-90 decibels so they might do so during the day as well, but they are specifically excepted BUT only during an electrical outage. So if you ran that while there was no power outage they could make you shut it down. And yes, there’s a secondary rabbit hole as to whether you objectively violate the 50 decibel limit about it being continuous and the device needed to measure it at such and such distance from the source, etc.
Dylan
Jul 26 2024 at 3:37pm
I think this helps me understand our difference in understanding of externalities. In my view, externalities are everywhere, but that in no way implies that any intervention is necessary, let alone government intervention. Showing an externality is the first step to making a case that government intervention is necessary, but it’s a small step. You also need to show that the problem is large enough, unlikely to be solved in another way, and that government intervention is unlikely to make the problem worse. Those last 3 are high hurdles, the first one isn’t.
Pierre Lemieux
Jul 26 2024 at 4:47pm
Dylan: I am not sure there is a real disagreement between you and Jon. Externalities are everywhere if no private property rights exist. In fact, the main function of private property rights is to define externalities away. Without property rights, if your neighbor puts a big cross on top of “his” house (shooting photons in your face) and you, a militant atheist, retaliate with photons by putting a sign on “your” house saying, “There Is No God,” you are both an externality to each other and the only solution is to fight it out. Private property solves this conflict.
Dylan
Jul 26 2024 at 6:23pm
I don’t think that really solves it, for the reasons Nobody really eloquently argues in the linked post. Where does your right to play your music loudly in your own home end and my right to peacefully enjoy my own property begin? It’s not property rights that solve this, it is social norms. You characterize this as a bribe, I think of it as good manners. You play your music loudly occasionally when you have some people over, I might not enjoy it, but I acknowledge your right to do it. The parties start happening every weekend, or go until 3am… Then I’m going to complain.
But, this is different from what I was trying to say to Jon. I think from reading him, he hears someone say externality and he thinks they are advocating for a Pigouvian tax, which in my case is true sometimes, but nowhere close to always.
Jon Murphy
Jul 26 2024 at 7:20pm
Other way around. I’m talking to the people advocating for a tax. Almost never do they take the time to consider whether it’s a pareto or policy relevant externality.
Jose Pablo
Jul 27 2024 at 1:58pm
Externalities do come in pairs.
If no rules exist limiting noise, it is very likely that “loud music coming from neighbors” will be “oversupplied” in that society.
But if as a reaction to this, “playing my guitar on my house” became a “collective decision” to be made by political representatives, “silence” would be, very likely, “oversupplied”.
Whether a situation of “music oversupply” is preferable to a situation of “silence oversupply” is anybody’s guess.
And, in any case, how do we know what is the ideal situation with respect to which “oversupply” is defined?
As Pierre (and Jon) describe, market exchanges are the best tool to achieve Pareto efficient improvements from any initial situation. “Political action” is always and everywhere suboptimal compared to voluntary exchanges (“voluntary” is what allows us to know the exchanges are Pareto efficient for the participants).
Political action may be required if, for any reason, these “market exchanges” are impossible. But, then, the “political action” should focus on helping create the conditions to facilitate the development and the functioning of these “markets”. Not conceived (as they so frequently are) as a “tour the force” to help the “silence lovers” impose their will over the “music lovers” (or the other, very equivalent, way around).
Jose Pablo
Jul 27 2024 at 3:21pm
“Showing an externality is the first step to making a case that government intervention is necessary”
How come, Dylan?
By definition, a “political intervention” consists of the imposition of an external cost over the minoritarian political coalition. Trying to use a political intervention to solve an “externality” (defined as the imposition of a cost over a third party) would be then akin to trying to put down a fire using a flamethrower.
Thomas L Hutcheson
Jul 26 2024 at 3:51pm
I’ve nothing against residential generators (or keeping a gun at home for self protection), but the practice is indicative of a serious failure of the provision of public services. The respective bureaucracies must not have the proper incentives to prevent outages/crime. Ideally, neither should be necessary.
Dylan
Jul 26 2024 at 8:22pm
One of the nice things about NYC, 20 years hear and not a single power outage. Everywhere else I grew up, a couple outages a year were normal, and usually one multi day outage a year.
Craig
Jul 26 2024 at 10:11pm
“One of the nice things about NYC, 20 years hear ”
I must say you cherry picked that time frame well! August 14th, 2003, I was in Midtown. My dad and I walked to the Port Authority to try to get on a bus back to NJ but kind’ve like 9/11 the Lincoln Tunnel was initially closed. There was a white van waiting for the tunnel to open in the traffic jam, he was delivering an ice sculpture and because of the blackout he had to give up on the delivery. When the Port Authority opened the tunnel we were the first ones out of the city and Rt 3 was WIDE OPEN, NOBODY on it. I never got home quicker. The van dropped me and my dad off and some others along the highway and my mom came to pick us up.
Dylan
Jul 27 2024 at 6:56am
Yeah, I moved out 2 years after that. Still, that was a huge national story and I remember wondering what the big deal was. They were restoring power within a couple of hours. Subway started running again by 8. Power outages of that length happened at least a couple of times a year where I lived.
And, NYC has had widespread outages since I’ve been here. Sandy being the most notable. But, I’ve had nothing more than some flickers and a couple of brownouts that lasted seconds.
Jose Pablo
Jul 27 2024 at 2:07pm
A situation with no power outages ever would be clearly suboptimal.
In the same way, a police force able to prevent every single crime would also be clearly suboptimal.
Except, obviously, if you assign a totally irrational economic value to these situations. Or unless you expect that, through the political process, you can make “others” pay for your spotless electrical and police services.
Something indeed possible and clearly “suboptimal'”.
Matthias
Jul 27 2024 at 7:56pm
They don’t have to be ‘public’ services. Private companies could (and did) deliver electricity just fine.
But yes, I’m just as confused as you are by the statement that private residential generators are essential (and especially so for people who work from home).
I can remember experiencing maybe one short blackout growing up in Germany in the 1990s.
Funny enough, here in Singapore we had multiple blackouts over the last few years, but that’s because we live in a charming old shop house designed and built before electricity (or even indoor plumbing) where the standard here, and the retrofitted wires are also getting old and the humidity ain’t kind to them.
There was never any issue with the electric grid. And people would look at you as if you were a particularly weird y2k prepper or something, if you had your own residential generator.
Pierre Lemieux
Jul 29 2024 at 11:26am
Matthias: If you look at the WSJ story I cited, you will see that the average loss of residential power outage in the US is about 5 hours per year, with of course wide variations (it is five times that in Florida). I suspect that places without dense population (like suburbs) are much over the average as a main cause of is trees falling on power lines. But even abstracting from that, if you have one power outage a year and it lasts 5 hours in the middle of your working day, it’s a lot of time loss. After five hours without heating in the dead of the winter, it’s going to be chilly in the house. Etc.
Mactoul
Jul 26 2024 at 11:30pm
You will find that it is precisely the rich countries that have more rules about what can and cannot be done on a private property.
Matthias
Jul 27 2024 at 7:49pm
People like rules (or rather like rules to apply to other people), and rich countries can afford more rules.
Pierre Lemieux
Jul 29 2024 at 11:13am
Mactoul: Where will I find this? I don’t know of a single economic freedom index that shows support your claim. For example, in the Economic Freedom of the World index, India is at the 87 rank, Russia at 104, Somalia at 138 (from the area “Legal Systems and Property Rights” in the database). I doubt that you can find a source among credible economic historians (check Douglas North, etc.) supporting your claim. Please cite your sources.
Pierre Lemieux
Jul 29 2024 at 12:03pm
Mactoul: If you still want to persist in (what I see as) your error, you might find some theoretical support in Seeing Like a State (1998), a book by anthropologist and political scientist James Scott, of left-anarchist inspiration. Scott died 10 days ago.
MarkW
Jul 29 2024 at 11:59am
During a summer power outage, in my upscale neighborhood, the cacophony of multiple whole-house generators running continuously is quite obnoxious — especially if you try to stay cool by opening up your windows. Our own solution is to use our car as a generator (which is as quiet as a car idling in the driveway because it is a car idling in the driveway) to run only the essentials (e.g. fridge and freezer, electronics, maybe a fan or two). If we can’t stand the noise any more, though, and the outage seems like it’s going to be extended, we may just pack up and drive to the cottage to enjoy both electricity and quiet (rich people problems…)
Pierre Lemieux
Jul 30 2024 at 10:53am
MarkW: Interesting. But the car would be a (tiny) solution for your immediate neighbors and you, correct? Until most of them start imitating you. But as far as you are concerned, if your house is all powered, you can shut the windows. Do you bring the power from your car to your house with a simple extension cord running through a window?
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