Negative Externalities

Taking negative externalities into account when thinking about the optimal equilibrium price and quantity

Category:

Education

Tags:

• microeconomics

[BoStevoD]

I enjoy Slavoj Zizek's take on externalities and environmental disaster: "This readiness to assume the guilt for the threats to our environment is deceptively reassuring: We like to be guilty since, if we are guilty, it all depends on us. We pull the strings of the catastrophe, so we can also save ourselves simply by changing our lives. What is really hard for us (at least in the West) to accept is that we are reduced to the role of a passive observer who sits and watches what our fate will be."

[TTL1212]

thanks a lot

[Raelifin]

The idea at the end is only one possible solution. Instead of somehow raising the price of bags (presumably through a tax), it's also possible to have consumers recognize the added costs and thereby reduce the demand curve by that 2cents. Any combination of increasing explicit costs and reducing demand is also a solution. Taxation might be optimal, but it's not mandatory.

[etzel33]

a tax shift from labor toward land, severance and pollution taxes would internalize these costs

[xcvsdxvsx]

@polvotierno these costs are considered by those who apply for jobs at these institutions. in a free market society capitalists are in competition for available labor, and the wage that they can get away with paying are dependent upon these conditions. check out this great little video for a more detailed explanation of why wage controls damage society /watch?v=IFbYM2EDz40&feature=g­-all-f&context=G27f7289FAAAAAA­AAXAA

[xcvsdxvsx]

saul for benevolent emperor 2012

[QuantumMaths]

@egatesaleks

A need to control negative externalities would only be seen as a collapse of true fiscal conservatism by a Krugman-worshipping rat like yourself who characterizes every other alternative to a heavy regulation, state-centered economic program as a strawman.

[luismiguellm]

what program do you use to illustrate the examples.

Thank you

[egatesaleks]

So you just undid conservatism with a small stroke. Congrats. Now let's add Daniel Kahneman and call it game over, eh?

[polvotierno]

Could you do a video applying the idea of a negative externality to wages that don't cover private and social costs of labor?... Then people would understand that wages have to rise for the benefit of society as a whole.