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Thread: Externalities

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    Externalities

    Perhaps the main reason I reject classically liberal economic views is externalities. How should economic systems best account for them?

    I recently had a Facebook exchange with an old acquaintance of mine who is a disciple of Murray Rothbard, over the issue of pollution in particular. He stated that anybody who was the victim of pollution should be able to sue the source. (I recognize this as an argument Rothbard promoted.) I responded that consistently, this would allow anybody in a neighborhood to sue anybody who drove a car through the neighborhood for polluting the air of the neighborhood, so this would probably result in a sort of primitivism he didn't have in mind. Also, I didn't point it out at the time, but this would probably seem to allow for far more reaching statism than this particular person would be comfortable with, as the mechanism for enforceablility seems to be going for a government.)

    He never responded to me, which was a shame because I imagine this would be a common objection.
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    tWebber
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    "Externality" needs to be defined. Right now, it's just a buzz word. Besides, it may be said that externality is in the eye of the beholder; possibly though unlikely that nobody cares about pollution from cars. Another point: the law suit must show harm substantial enough to justify the suit or win substantial damages. Do you know the doctrine of de minimis--don't sweat the small stuff?

    Lots more to say about the OP, much more, but maybe that will do for a start.
    The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

    [T]he truth Iím after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -ó Marcus Aurelius, Meditations

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    Quote Originally Posted by Truthseeker View Post
    "Externality" needs to be defined. Right now, it's just a buzz word. Besides, it may be said that externality is in the eye of the beholder; possibly though unlikely that nobody cares about pollution from cars. Another point: the law suit must show harm substantial enough to justify the suit or win substantial damages. Do you know the doctrine of de minimis--don't sweat the small stuff?

    Lots more to say about the OP, much more, but maybe that will do for a start.
    An unintended effect from an activity that has an effect, positive or negative, on somebody who did not choose that effect.

    Also, how do we define "small stuff"? Not all externalities are as benign as one individual car; consider this case from California.

    http://la.curbed.com/2013/9/13/10198...bors-with-lead
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    tWebber Rational Gaze's Avatar
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    Quote Originally Posted by KingsGambit View Post
    Perhaps the main reason I reject classically liberal economic views is externalities. How should economic systems best account for them?
    Well, the example you give have absolutely nothing to do with economics, so your decision to reject 'classically liberal' economics (by which I assume you mean Austrian economics) is a complete non-sequitur.

    Quote Originally Posted by KingsGambit View Post
    I recently had a Facebook exchange with an old acquaintance of mine who is a disciple of Murray Rothbard, over the issue of pollution in particular. He stated that anybody who was the victim of pollution should be able to sue the source. (I recognize this as an argument Rothbard promoted.) I responded that consistently, this would allow anybody in a neighborhood to sue anybody who drove a car through the neighborhood for polluting the air of the neighborhood, so this would probably result in a sort of primitivism he didn't have in mind.
    In a fully voluntary society, there would be no commons or public space. When it came to real property and physical movement across such real property, there would be owners, guests, licensees, business invitees, and trespassers. So it would depend on which of these the driver were, and whether or not they had violated any sort of agreement with the property owner by driving their car through said neighbourhood. However, none of this has anything to do with economics.

    Quote Originally Posted by KingsGambit View Post
    Also, I didn't point it out at the time, but this would probably seem to allow for far more reaching statism than this particular person would be comfortable with, as the mechanism for enforceablility seems to be going for a government.)
    In a fully voluntary society, the courts would be private and all law would be based on the NAP. So no, it would not lead to statism in the slightest. Once again, this has nothing to do with economics.

    Quote Originally Posted by KingsGambit View Post
    He never responded to me, which was a shame because I imagine this would be a common objection.
    Why would it be a common objection? It has literally nothing to do with economics. I could see it as a possible objection to pure voluntarism, but it has no bearing on economics whatsoever.

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    Quote Originally Posted by Rational Gaze View Post
    Well, the example you give have absolutely nothing to do with economics, so your decision to reject 'classically liberal' economics (by which I assume you mean Austrian economics) is a complete non-sequitur.
    Before proceeding any further, what definition of economics are you working with? The issue of who should shoulder the cost of externalities seems inherently economic.
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    tWebber
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    Quote Originally Posted by KingsGambit View Post
    An unintended effect from an activity that has an effect, positive or negative, on somebody who did not choose that effect.
    I was thinking more of negative externalities. Do you indeed allow positive externalities? But what about mixed externalities (one that is judged to be both positive and negative, e.g., some people want it, others not, and the rest of the people is indifferent)?

    Also, how do we define "small stuff"? Not all externalities are as benign as one individual car; consider this case from California.

    http://la.curbed.com/2013/9/13/10198...bors-with-lead
    That could be an instance of "mixed" externality, except there is no person that wants it.


    Then we have the problem of deciding what to do with a negative externality. Letting the government handle it can create new negative externalities. Maybe the solution is worse than the problem. (I am concerned that you seem to view our governments like they are always saintly and competent.)
    The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

    [T]he truth Iím after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -ó Marcus Aurelius, Meditations

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    tWebber
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    Quote Originally Posted by Rational Gaze View Post
    Well, the example you give have absolutely nothing to do with economics, so your decision to reject 'classically liberal' economics (by which I assume you mean Austrian economics) is a complete non-sequitur.


    In a fully voluntary society, there would be no commons or public space. When it came to real property and physical movement across such real property, there would be owners, guests, licensees, business invitees, and trespassers. So it would depend on which of these the driver were, and whether or not they had violated any sort of agreement with the property owner by driving their car through said neighbourhood. However, none of this has anything to do with economics.


    In a fully voluntary society, the courts would be private and all law would be based on the NAP. So no, it would not lead to statism in the slightest. Once again, this has nothing to do with economics.


    Why would it be a common objection? It has literally nothing to do with economics. I could see it as a possible objection to pure voluntarism, but it has no bearing on economics whatsoever.
    But economics IS in every human action! It is relevant to every moment of life, possibly including sleeping. Robinson Crusoe's life on his island, pre-Friday, too.
    The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

    [T]he truth Iím after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -ó Marcus Aurelius, Meditations

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    Quote Originally Posted by Truthseeker View Post
    I was thinking more of negative externalities. Do you indeed allow positive externalities? But what about mixed externalities (one that is judged to be both positive and negative, e.g., some people want it, others not, and the rest of the people is indifferent)?
    I'm not sure what to make of positive externalities, as they still are imposed upon one without their consent, and whether they are viewed as negative or positive could be subjective in some cases.

    I don't think governments are saintly or universally good, not at all. I'm not sure how such a view would logically flow from my OP, either. (And I also agree that it seems unclear why this would not relate to economics. Arguing otherwise seems like an attempt to avoid addressing this issue via semantics.)
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    tWebber
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    Quote Originally Posted by KingsGambit View Post
    I'm not sure what to make of positive externalities, as they still are imposed upon one without their consent, and whether they are viewed as negative or positive could be subjective in some cases.
    If people don't want a particular externality, why should we sort it as positive?

    Subjective, yes. Always. If you think there could be an objective externality, what on God's green earth could be objective?





    I don't think governments are saintly or universally good, not at all.
    Sometimes I ask, is this or that government doing more good than bad?





    I'm not sure how such a view would logically flow from my OP, either. (And I also agree that it seems unclear why this would not relate to economics. Arguing otherwise seems like an attempt to avoid addressing this issue via semantics.)
    Not sure what you mean. Anyway, Hans-Hermann Hoppe said that he showed every government impoverishes its subjects (I think, or something close to it). Maybe every government is a negative externality!
    The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

    [T]he truth Iím after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -ó Marcus Aurelius, Meditations

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