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Markets are incapable of optimizing against externalities. For example, no one owns the air, so no one pays for the exhaust produced by their cars as they drive
by g_langenderfer 7y ago
Markets are incapable of optimizing against externalities. For example, no one owns the air, so no one pays for the exhaust produced by their cars as they drive to work.
If there were air rights-say every property owner gets rights to the air one mile up from their property-, the holders could sue polluters for the damage they cause.