I.

Last week I wrote an article in which I condemned a carbon tax that John Humphreys is promoting for the Centre for Independent Studies. Mr Humphreys responded with an email to a reader in which he said: "I never claimed that a tax was a free-market mechanism". But I never accused him of making such a claim. What I did was call his approach "fallacious" and I used the following quote in support of my opinion:

I recently wrote two articles strongly critical of John Humphreys' proposal for a carbon tax. In his rejoinder ('The Gerry Chronicles: Carbon Tax and Bad Economics') he completely ignored my fundamental point that a carbon tax is a direct tax on capital and hence Australia's capital structure and the process of capital accumulation.

The Austrian school defines capital as a heterogeneous structure consisting of complex stages of production with a time dimension. It is within this theoretical framework that my argument is to be understood.