> Who decides what kinds of inefficiency are admitted? Sounds utterly dystopian to me too if some (small) group gets to decide what inefficiencies the society s

> Who decides what kinds of inefficiency are admitted? Sounds utterly dystopian to me too if some (small) group gets to decide what inefficiencies the society should pay for to satisfy their personal vanities. Oh, absolutely. I would struggle to think of a worse way to do things. :) "Acceptable inefficiency" is a coordination problem, which are nominally solved via protected markets. To provide an example: let's say that you want all battery factories to operate cradle-to-grave with zero pollution. This is way more expensive than just dumping manufacturing byproducts into the nearest river. No one manufacturer is going to do this on their own, because it'll put them at a substantial disadvantage compared to their peers. However, if the market imposes that cost as an entry requirement -- to sell batteries, you must be certified pollution-free -- now you've leveled the playing field. Every player has the same requirements. This isn't a trivial thing, of course. You can't allow the shortcut of "move manufacturing to a place where we can fill the rivers with lithium and nobody in power is going to care". This also introduces two new problems: regulatory capture and corruption. If it's all-in cheaper to bribe, blackmail, or infiltrate the regulators, then that'll happen. And regulation is often used as a weapon against smaller or newer players. But I'd wager those are easier problems to solve.