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Who should pay for the smell of lasagne?

My boredom with eating sandwiches or salad for lunch encouraged me to visit the ready-meal section of Tesco today. The result was lasagne. As it cooked at work, one of my colleages commented on how good it smelt. I realised there was a positive externality created by cooking the meal, so I suggested to the office that they should pay me for the pleasure they were receiving.

I had no takers. Had I pushed them, they might have argued that, while the smell was enjoyable, they had not consented to it and therefore had no obligation to pay for it. They might also have pointed out that although the smell was nice, I would be getting the real benefit (the eating part).

In this example, it can be seen that charging people to receive a positive externality is unfair and absurd. Yet this is exactly the argument many people use in favour of taxpayer-funded university courses. This argument, out of all the arguments for scrapping tuition fees, is the worst.

18 comments to Who should pay for the smell of lasagne?

  • A_t

    Is this not a bit of a simplification though? Your lasagna smell, although pleasurable, brings no conceivable economic benefit to those around you, whereas one could definitely argue the case for well educated people in a particular country benefitting everyone, at least to some degree.

  • A_t: You argue that this “pleasurable” thing has “no conceivable economic benefit”? That would seem to be a needlessly narrow definition. If it is indeed pleasuable, then it clearly does benefit everyone who finds it so, even if only in small degree. It is not reasonable to suggest that this benefit is non-economic simply because no price has been set.

    Alex’s example is a simplification. More to the point, it is an example of reductio ad absurdum. That does not reduce its relevence to the debate at hand.

  • In this example, it can be seen that charging people to receive a positive externality is unfair and absurd. Yet this is exactly the argument many people use in favour of taxpayer-funded university courses.

    The argument is even more widespread than that: many statists go so far to claim that you only have partial ownership-rights for your possessions since you couldn’t have acquired or created them without positive externalities provided by others. The answer of course is again that you didn’t enter a contrat with anyone on the “delivery” of positive externalities and that their voluntary creation by others does not put any obligations on you.

  • T. Hartin

    A_t – if pleasurable smells have no conceivable economic benefit, then why do people pay good money for perfumes, deodorants, and the like? You seem to be coming close to saying that aesthetics have no economic value, and if I were you I would be very reluctant to go there.

  • e young

    I wonder, had been a curry that Alex was cooking, if the response would have been as positive?.

    Imagine some benificiary of Alex’s externiality arriving home with the stench of a curry clinging to his clothes, and trying to explain to an irate partner, that, ‘no, he had not visited the local tandoori’.

    The same could be said re the supposed externality of university education, I personally find most ‘grads’ to be rather unpleasant and not particularly intelligent, there are, of course, exceptions.

    No particular, or intrinsic benefit would seem to accrue from this externality, and either way, I do not feel obliged to finance others higher education, and take exception in being forced to do so.

    If this is all we have to discuss, then it must be summer!. arguing (discussing), just for the sake of arguing.

  • This reminds me to ask my neighbors to chip in for planting flowers in my garden. I’ll never do that; it seems ridiculous to me. But I’m glad Alex tried with the lasagne smell.

    Also reminds me of the story that Walter Williams tells his students. He’s waiting in an airport, when people were still allowed to smoke in them. A woman sitting near him asks him to stop. In reply he asks her how much she’ll pay him to stop, since he has the right to smoke.

    Property rights are a solution to what otherwise would be pervasive externalities. A set of property rights, to be useful, doesn’t have to be pedantic, and would be difficult to use if it were too detailed. The lasagne was Alex’s, but nobody owned the smell.

    What’s not covered with a set of property rights–the passing smell of lasagne in an office, or the unexpected beauty of blooming flowers–are externalities that *usually* seem really to be beside the point. We just learn that such things are inescapable, and respect rights as a matter of civil behavior.

    Cooking curry in an office is not civil behavior, at least in most offices in the US.

  • T. Hartin

    I also wonder a bit about the “positive externalities” of university education. There may be a bit of a correlation/causation problem here. If people who have higher educations tend to be more successful later in life, is that because successful people tend to go to university, or because having been to university makes you successful?

  • Karl Gallagher

    There’s a folk tale (from China IIRC) that tells the tale of a landlord suing his starving student renter for enjoying the smells of the landlord’s kitchen while eating his plain rice. The judge orders the student to jingle his few coins in his hand, then tells the landlord the sound of the coins is the proper payment for the smell of his food.

    It’s a pity none of your co-workers knew the story, you supplied the ultimate straight line for it.

  • Richard A Garner

    David Friedman looked at this argument for public funding of education in a particularly good article:

    “The most common arguments for government schooling involve the claim that it produces large positive externalities, that by schooling my children I greatly benefit society as a whole, and that it is therefore inappropriate to leave either the decision of how to school them or the cost of doing so entirely to me…

    “One obvious problem with this argument is that, if correct, it applies to a lot of things other than education. Physical capital also increases productivity; does it follow that all investments ought to be subsidized? Better transportation allows workers to spend more time working and less time commuting; should we subsidize the production of cars? The argument suggests that everything worth doing ought to be subsidized-leaving us with the puzzle of what we are to tax in order to raise the money for the subsidies.

    “What is wrong with this argument is that it misses is the way in which the price system already allocates “social benefits” to those who produce them. Building a factory may increase the wealth of my society-but most (in the limit of perfect competition, all) of the increase goes to the investors whose capital paid for the factory. If I use a car instead of a bus to commute, the savings in time is added either to my leisure or my income. If education makes me a more productive worker, my income will be higher as a result. That is why top law schools are able to sell schooling to willing customers at a price of about twenty thousand dollars a year.”

    Even if it were true that education creates massive externalities, only if this implies the possibility that people would rather free-ride off these externalities than get an education themselves could these even begin to amount for an argument for state funding.

    As an additional note: It is funny that the left is always saying that state funding of education is essential to lift the poor out of poverty by enabling them to acquire essential skills; I saw a Lib Dem MP on TV try to argue against university fees by saying that most university leavers make no more than they would have if they had skipped uni and simply joined the labour force!

  • Julian Morrison

    The lefty mistake is to concieve payment, not as persuasion, but as punishment.

    Thus the idea that you “should pay” for recieving a positive externality. You got something, so you should give something. Or else you’d be “getting away with it”.

    Libertarians by contrast understand that payment exits to persuade a property owner to give you something. No owner, no need for payment.

  • Tom

    Say I work in your office. I like the smell of your lasagne, but I’m on a diet so I have to eat the sandwiches my girlfriend lovingly makes me instead. Our co-workers are in similar situations – they all, for some reason or other, wish to enjoy the smell of your lasagne, but do not wish to eat it themselves. They therefore prefer you to buy it, and offer to pay for your lunch if you will buy lasagne with it. Sounds like a fairly good deal to you, so you accept.

    Your problem?

  • Phil Bradley

    Externalities are hard to measure and often subjective as the Lasagna/Curry example shows.

    The externalities of higher education tend to be over-estimated for several reasons. One is that ‘professions’ institutionalize themselves and require an education in order to partake of the economic benefits of the profession. This drives up costs and creates major labor market rigidities – negative externalities.

    If you take out this institutionalizing effect, the evidence seems to indicate that higher education in fact decreases a person’s lifetime economic contribution. Which seems to indicate a special tax is required on higher education.

  • e young


    Problem!, — Some jerk calls the Health and Safety Dept. – and they confiscate the cooker, the lasagne, and impose a restricting order on the Company, plus imposing a big fine, for cooking and preparing food in unlicensed premises, which convinces the Company to shut down the office, and make the staff redundant!.

    Now that’s what I call an externality….

  • I would be much happier to smell curry cooking in an office than lasagne actually. I love that tang of turmeric in the air.

  • Geo

    Karl – a similar folk tale has gone around the Arab world for some time. A local folk hero/buffoon called J’ha is starving, with but a single coin in his pocket. He sits outside a restaurant to smell the food and dream of what he can’t afford. The owner comes out and, holding out a bowl, demands payment for the smell of the food which J’ha has been enjoying. J’ha takes out his only coin, bounces it in the bowl (with a “clink”) and pockets it again. “There,” he says, “I smelled your food; you heard my money.”

    Alex – not sure I can agree with you on this one. At least, the reasoning why one cannot demand payment. A positive externality is certainly a fair market item. Otherwise, people wouldn’t be willing to pay extra for “atmosphere” at a nice restaurant. If one were to extend your argument to other sensory stimuli, such as visual or auditory, one could argue that movies or concerts are positive externalities which are economically untenable, based on the same reasoning.

    The snag is, as has been mentioned above, that there was no contractual agreement for people to pay you for the succulent smell of your tasty lasagne. Had you offered beforehand to cook the dish so people could enjoy the smell, for a fee, and people agreed, then you’d have yourself a heckuva business plan!

    (Also, if you find any takers for such a deal, please let them know I cook a sweet camarones al mojo de ajo, of which I’d be delighted to let them catch a whiff, in exchange for an absurdly tiny remuneration.)

  • Actually, thinking of this a bit more, shouldn’t the cook pay the people scenting the food, rather than the other way round?

    If I love the aroma of curry, the smell will make me hungry and dissatisfied that I cannot eat some. If I hate the smell of curry, the smell will make me angry and nauseated that I have to smell it.

    Perfumes don’t offer a tangible follow-up like a cooked meal [the promise of sex is rather more elusive an association] – good perfumes are their own reward. Whereas lovely cooking smells are powerfully linked with the hope and anticipation of soon eating lovely cooking.

    Those who have to be tantalised [or sickened] are the ones who should be claiming the money, no?

  • What about the victims of passive lasagne smell? Not everyone likes lasagne!

    Your boss should really be held accountable for not installing extractor fans to remove the lasagne smell, lest someone who doesn’t want to smell it be inconvenienced.

  • Yeah, but isn’t it kind of low and barbaric to reduce everything to “payment” in this way? We seem to have forgotten all of the lessons that our grandparents learned about how the economic system is really unstable and irreconcilable with real life. People then knew that sometimes you just need to make sure some things, like a safety net or a way to improve your population in general, is simply provided.

    Not everything, not even all payment, is purely economic in the sense meant in the example. For example, if some guy finds himself a girlfriend who is really good in bed, it can make him a fairly happier man (other relationship issues being equal) than he was with a woman who was so-so in the bedroom.

    It does not follow that the man, or his company or friends or family, ought to pay money for the woman’s sexual activities with the man. This does not mean that there isn’t a degree of exchange going on… if the man cannot provide the woman with satisfaction, sexual or otherwise, she will probably eventually move on to a more suitable partner.

    Similarly, not all externalities are limited to purely economic considerations. Anyone with evena modicum of interest in democracy would have to admit that a properly educated society – a society in which critical thinking and analytical skills are well-developed, an awareness of history is cultivated, and an ability to reason and debate is built up – is necessary. Otherwise, the people running the society (the people themselves) are not really equipped for their (supposedly) most sacred and important job.

    Whether or not secondary, or post-secondary, education does this is another question. I think most people would agree that a decent post-secondary education would be an aid, and if it’s difficult to get that, then what’s needed is educational system reform, not funding cuts.