How Economics Saved Christmas

Art Carden adapts Theodor Geisel:

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!”

To the Grinch, the Whos were polluters, spewing their joyful noise into his cave.

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.

The most efficient remedy for pollution is to make polluters pay those who are harmed.

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.

Without buying pollution rights, the common law (and civil law) allow the polluter to be forcibly shut down.

“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!”

Pre-existing conditions, however, are not legally actionable. A location made undesirable by jubiliant Who-song has already seen the cost of pollution incorporated into the buyer’s price.

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.

Since he was the new economic agent, the Grinch’s sour attitude was actually a pollution on the Whos’ joyful Christmas. His choice was to accept their ways or sell his cave to a deaf Grinch.

This being a Dr. Seuss story, the Grinch adapted. A more grinchly Grinch would have sold his cave to the next sucker right after New Year’s.