A bit of a debate is erupting on the World Wide Web in respect of whether the fee that Mayor Bloomberg plans to charge for driving into Manhattan is a Pigovian tax. This is a reference to the ideas of a British economist named Arthur Cecil Pigou. The mayor reckons that congestion pricing, which involves making drivers pay a fee to enter parts of Manhattan during certain hours, will keep down traffic in the city, speed the flow of cars and delivery vehicles, and, on a net basis, give a boost to commerce.

This is in line with the ideas of Pigou, who reckoned that it was a beneficial thing for governments to use the taxing power to affect behavior. Pigou would have understood what the mayor was talking about when he said, “Using economics to influence public behavior is something this country is built on — it’s called capitalism.” The mayor was quoted to that effect in the Web log of a Harvard professor of economics named Gregory Mankiw, who is a former chairman of the Council of Economic Advisers and who offers what he calls “random observations for students of economics.” In its comments section there are those who figure the mayor’s scheme is not really a Pigovian tax but rather just a user fee for consuming a scarce resource.

Mr. Mankiw says that both views “are perfectly valid,” adding:

“When people are not charged (or are undercharged) for using a common resource such [as] a congested road, then incremental use of the resource entails a negative externality on other users. Imposing a user fee for the scarce resource can be described as a Pigovian tax to deal with this externality. Similarly, a conventional Pigovian tax such as a tax on pollution emissions can be described as a user fee for consuming clean air.”

Mr. Mankiw maintains what he’s calling the Pigou Club, which is basically a group of economists and pundits with what Mr. Mankiw calls “the good sense to have publicly advocated higher Pigovian taxes, such as gasoline taxes and carbon taxes.” His list includes not only himself and Martin Feldstein but columnists Paul Krugman, Gregg Easterbrook, John Tierney, Jonathan Rauch, and Thomas Friedman, along with Vice President Gore. Secretary of State Shultz and Chairman Greenspan are also in the Pigou Club.

One commenter on Mr. Mankiw’s site said that the “great thing” about the policy is that everyone can support it, including “Enviro-leftist weenies because one quarter of land on Earth will sink under water by the middle of next year if we don’t sign Kyoto and run our cars on jelly-beans” and “Neocon warmongers because 50 cents of every $1 goes straight to Bin Laden.”

It turns out, however, that there is also a “No Pigou Club,” founded by Terence Corcoran, editor of the Financial Post in Canada. The NoPigouClub Web site says it is “dedicated to saving the United States and Canada from Greg Mankiw’s Pigovian plan for major gas tax increases.” Mr. Cocoran writes that “Pigovian taxes turn the role of prices upside down. The proper view of prices in a market economy is that the price contains thousands of pieces of information about a product. … Price is part of a process, jam packed with un-measurable information, not a fixture in time that just needs to be tweaked to get a desired result. Taxes are not prices.”

“The Pigovians,” Mr. Corcoran continues, “throw all the real price information out, declare that it’s all wrong and claim we need a new price that will incorporate the information we think should be in the price or would be in the price if people only knew what we know. The Pigovians plan to tear down the market price and all the information it contains and impose their own government-regulated price.”

One columnist who has written about this fray, Amity Shlaes of Bloomberg News, concluded that the “strongest argument” against the Pigovian gas tax is that “revenues from such taxes tend to be used for purposes other than those intended.” She cited the cigarette taxes — Mr. Bloomberg’s original Pigovian sin, in our view — that were, ostensibly, brought in to punish unwanted behavior but “have promoted,” as Miss Shlaes put it, “another kind of sin: excessive government spending.”

Which is the thing to watch out for as Mr. Bloomberg pursues congestion pricing in Manhattan. If the money is going to be used as the mayor indicated yesterday – in mass transit schemes — it will expand total government revenues and outlays and give congestion pricing a socialistic coloration. But if revenues from congestion pricing were used to reduce taxes on those that pay the most taxes in the first place, then it would be a step in the right direction.