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So are you saying that the solution to externalisation of damage to the environment by a corporate entity is to have other corporate entities own everything? Al

• CWuestefeld 11y ago
  It's certainly one possible solution. This isn't just my idle speculation; see Coase Theorem [1] in economics: The theorem states that if trade in an externality is possible and there are sufficiently low transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property. In the interest of intellectual honesty, I should go on to quote: In practice, obstacles to bargaining or poorly defined property rights can prevent Coasian bargaining. ... Coase argued that real-world transaction costs are rarely low enough to allow for efficient bargaining and hence the theorem is almost always inapplicable to economic reality. Since then, others have demonstrated the importance of the perfect information assumption and shown using game theory that inefficient outcomes are to be expected when this assumption is not met. That being said, it should be equally clear that the failures of public choice [2] are also legion, and in the example of pollution, it's clear that the regulatory system has bungled quite a lot of it, so it's far from obvious that the private ownership approach would be any worse. [1] https://en.wikipedia.org/wiki/Coase_theorem https://en.wikipedia.org/wiki/Coase_theorem [2] https://en.wikipedia.org/wiki/Public_choice https://en.wikipedia.org/wiki/Public_choice