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It becomes a social cost because it was not accounted for as a market cost. It may be that some of these cannot in principle be accounted for, and even more wh
by dqpb 5y ago
It becomes a social cost because it was not accounted for as a market cost.
It may be that some of these cannot in principle be accounted for, and even more which cannot in practice be accounted for.
But I imagine the majority of externalities could be accounted for if we tried.
- tablespoon 5y ago> But I imagine the majority of externalities could be accounted for if we tried. The irony is if you actually came close to achieving that (e.g. accounting for all externalities in the market price), you'd have something like central planning. That's why externalities are usually managed through other mechanisms. Also, externalities are only one kind of market failure.