RobinMurphy, you actually don't go find benevolent rulers. You have a democracy instead, and then the people (that's us) tell elected representatives that air pollution and talking on your cell phone while driving are negative externalities. This was all covered in social studies in grade school.
@MrRobinMurphy If only I knew -- the notion of a benevolent government that looks out for social welfare (as taught in lower level econ classes) gives way to more complex vote-seeking models in higher level course work ... sadly, "economically efficient" and "politically efficient" rarely overlap.
@mjmfoodie One solution is to have sort of constitutionally binding incentives; The problem being that most countries have constitutions from a century ago...
@mjmfoodie Perhaps true in some countries, i.e. U.S., but not so in all countries. Certain countries where corruption is less, and social welfare of its citizens is actually practiced does lend itself to this notion.
An externality, by definition, is a cost (or benefit) imposed on any third party who had no control over the decision. Talking (especially loudly and profanely, as happens sometimes) on your cell phone in line at Starbucks imposes an external cost on others who are in line; using your house as a meth lab also imposes external costs on others (your neighbors). It doesn't matter whether the activity is legal or illegal.
@mjmfoodie what exactly can be a cost of talking out loud and profanely in public? That i just did not really understand because I am thinking in means of money lol, sorry i am just confused a bit
Also, this video seems to indicate that the free market does not operate within a set of laws, and a law is something against the free market. That is simply not true. Without a framework of laws to protect contracts, private property rights and protect against fraud, the free market cannot exist. It is the same with socialism or communism - without laws the whole system collapses into corruption and chaos.
@bccfl Uh -- a market economy doesn't necessarily mean that we have completely free markets... but that aside, please remember that these videos are using very simplified models meant to introduce students to the underlying concepts of economic behavior.
In your example, what about the decision the other person has made to be on the road or outside walking? They have weighed up the pros and cons of doing it and decided it was worth the risk. Also, the person on the phone must also factor in the price of an enormous fine or going to prison if the action is illegal. The video doesn't articulate the full risk analysis. The alternative to regulation is law enforcement, which the govenment is no good at doing when it comes to the environment.
@bccfl Hmmm - if you weigh the costs and benefits of going for a walk, do you account for every decision someone else might make that is out of your control?
I agree about the fine being imposed, but that fine is in place precisely because some additional cost is imposed as a disincentive on the person making the decision that is harming others...? And isn't this done because of the negative externality?
@mjmfoodie What is the difference in this case between an externality and an illegal act? Is the fine and imprisonment imposed on a person who murders their spouse to claim a large insurance policy a disincentive to quantify the scope of an externality or is it just flat out illegal? How does this differ from the example you site? Thanks.
the social cannot be measured in purley economic incentives but this is a good high school level explaination. Shame it only considers one economic model.
That's very odd... I turned up my speakers all the way. I watched many videos in this series and found only this one to have low volume. All the others were perfectly fine.
can u please make a video on multiplier and accelerator
shamaun14 12 hours ago
This was a very nice introduction. Fun graphics. Good examples. I'm looking forward to watching some of the others in the series. Good work!
johnr0bert 3 months ago
RobinMurphy, you actually don't go find benevolent rulers. You have a democracy instead, and then the people (that's us) tell elected representatives that air pollution and talking on your cell phone while driving are negative externalities. This was all covered in social studies in grade school.
johnr0bert 3 months ago
Thanks, this really made it clear for me.
KellyK0028 9 months ago
where does one find such wise and benevolent rulers to discern cost or benefits of externalities?
MrRobinMurphy 10 months ago
@MrRobinMurphy If only I knew -- the notion of a benevolent government that looks out for social welfare (as taught in lower level econ classes) gives way to more complex vote-seeking models in higher level course work ... sadly, "economically efficient" and "politically efficient" rarely overlap.
mjmfoodie 10 months ago
@mjmfoodie yeah, can't wait until you make that series of videos
MrRobinMurphy 10 months ago
@mjmfoodie One solution is to have sort of constitutionally binding incentives; The problem being that most countries have constitutions from a century ago...
Scientisticsoviet 7 months ago
@mjmfoodie Perhaps true in some countries, i.e. U.S., but not so in all countries. Certain countries where corruption is less, and social welfare of its citizens is actually practiced does lend itself to this notion.
kawola17 5 months ago
is it possible to get your script for every video?
fanaticastype 10 months ago
@fanaticastype I'm actually working on that project over the summer...
mjmfoodie 10 months ago
thank you
abXLinden 1 year ago
An externality, by definition, is a cost (or benefit) imposed on any third party who had no control over the decision. Talking (especially loudly and profanely, as happens sometimes) on your cell phone in line at Starbucks imposes an external cost on others who are in line; using your house as a meth lab also imposes external costs on others (your neighbors). It doesn't matter whether the activity is legal or illegal.
mjmfoodie 1 year ago
@mjmfoodie what exactly can be a cost of talking out loud and profanely in public? That i just did not really understand because I am thinking in means of money lol, sorry i am just confused a bit
Mojoman1 10 months ago
Also, this video seems to indicate that the free market does not operate within a set of laws, and a law is something against the free market. That is simply not true. Without a framework of laws to protect contracts, private property rights and protect against fraud, the free market cannot exist. It is the same with socialism or communism - without laws the whole system collapses into corruption and chaos.
bccfl 1 year ago
@bccfl Uh -- a market economy doesn't necessarily mean that we have completely free markets... but that aside, please remember that these videos are using very simplified models meant to introduce students to the underlying concepts of economic behavior.
mjmfoodie 1 year ago
@mjmfoodie ok i have a question.In school we learned that externality is internalized.What dos that mean???
97berke 1 month ago
In your example, what about the decision the other person has made to be on the road or outside walking? They have weighed up the pros and cons of doing it and decided it was worth the risk. Also, the person on the phone must also factor in the price of an enormous fine or going to prison if the action is illegal. The video doesn't articulate the full risk analysis. The alternative to regulation is law enforcement, which the govenment is no good at doing when it comes to the environment.
bccfl 1 year ago
@bccfl Hmmm - if you weigh the costs and benefits of going for a walk, do you account for every decision someone else might make that is out of your control?
I agree about the fine being imposed, but that fine is in place precisely because some additional cost is imposed as a disincentive on the person making the decision that is harming others...? And isn't this done because of the negative externality?
mjmfoodie 1 year ago
@mjmfoodie What is the difference in this case between an externality and an illegal act? Is the fine and imprisonment imposed on a person who murders their spouse to claim a large insurance policy a disincentive to quantify the scope of an externality or is it just flat out illegal? How does this differ from the example you site? Thanks.
bccfl 1 year ago
the social cannot be measured in purley economic incentives but this is a good high school level explaination. Shame it only considers one economic model.
CyberAthletethefirst 2 years ago
Well, there is a 10-minute limit; hopefully you will post your own video response to augment the explanation. Ah, the power of social media!
mjmfoodie 2 years ago
best explanation of externalities on the web THANKS!!!!!!!!!!!!!!!!!!
dbzsnakedante 2 years ago
THIS WAS FANTASTIC! THANK YOU SOOOOOOOOOOOOO MUCH! i have exams on monday and this really helped!
geebzie 2 years ago
I love your videos!!!!!!!!!!
wacastervids 2 years ago
That's very odd... I turned up my speakers all the way. I watched many videos in this series and found only this one to have low volume. All the others were perfectly fine.
plasmaflora 2 years ago
this is a great video. this is going to help so much for my exam! Thank you!!!
diggy3746 2 years ago
I love your videos, but on this one the volume is much lower.
Can you please increase the volume?
plasmaflora 2 years ago
i dink is ur speaker/headset, mine is loud
fh1mahfanzai 2 years ago