Im sure this has probably been discussed here before, but I am new. SO I was wondering if somebody could explain for me the austrian perspective on externalities? Thanks in advance for any and all help.
They’re a bitch, without them the price system would be a bit more perfect and market fundamentalism slightly more justified. Nonetheless, they exist.
Well it seems to me that if the best austrians can put up is that “they exsist” then Im going to have to stop believing in free markets…
That cant be the best answer, right?
You kinda have to ask yourself, what isn’t an externality? I don’t see how any exchange could not cause any extarnailty, whether good or bad. But the part of reflecting the “full cost” or “benefit” is completely subjective. For example, air pollution. Air pollution might hurt “society,” but what about the company that collects air pollution and uses chemistry to provide chemicals that the market wants? Air pollution would be a positive externality to that company.
They exist but there’s no reason that the free market can’t fix/provide them. If such was the case then the government would not be able to solve them either.
That guy is not an Austrian or even “free market”.
They exist but there’s no reason that the free market can’t fix/provide them.
There sort of is, by definition.
“There sort of is, by definition.”
In which case, according to that definition, I do not believe that there is such a thing as an externality.
Oh ok, so everytime I act, any effect that action has an any person is transmitted through the price mechanism. That sure does sound reasonable.
You guys are nuts.
"Oh ok, so everytime I act, any effect that action has an any person is transmitted through the price mechanism. That sure does sound reasonable.
You guys are nuts. "
Exactly what I meant, definatly.
Externalities, like air pollution and stuff? Lack of property rights. I can’t spike your water supply so why can I spike your air? Failure of state courts to uphold property rights of poor ppl vs big industry. Nuff said.
Hayekianxyz: “You guys are nuts.”
How scholarly of you.
“SO I was wondering if somebody could explain for me the austrian perspective on externalities?”
By:
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Enforcing property rights
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privatizing all public domains.
Most of the externalities currently attributed to markets are actually the result of Public/government policy. They are products of socialism and not Capitalism.
Here, I suggest you begin by watching Walter Block discuss free market environmentalism.
"Hayekianxyz: “You guys are nuts.”
“How scholarly of you.”
Indeed… I also think that a suitable response would be that every time I perform an action the government rushes in and makes sure that theres not an externality or they tax/nationalize it
Hayekianxyz just trolls, he sounds very sure until you actually ask him something, then he either does not respond or calls you nuts!
Maybe you should provide an actual example of an externality then it will be easier to discuss.
Hayekianxyz: “You guys are nuts.”
How scholarly of you.
What is it going to take for you people to realize that he’s just trolling. Go ahead, and challenge him on his “different point of view”. Let’s see what substance you’ll get out of him.
why are you looking to believe in something? read some mises and decide how to approach externalities, don’t depend on people on this forum
Yeah. He should probably be banned because his posts get stupider by the day and it’s becoming increasingly apparent that his profile is fake or at least his intentions are.
privatize property, and then externalities are for the most part internalized. All property has an “advocate” who will defend it, and can seek compensation for rights violations.
Externalities are both positive and negative. If I manicure my lawn, my next door neighbor benefits without paying. If I don’t dump my trash from my picnic on the ground at the park, but put it in the dumpster instead, all subsequent visitors of the park benefit without paying. And so on. Even breathing imposes “costs” on others for which the are not recompensed since, in the long run, my expulsion of CO2 reduces the available oxygen for future residents of this planet who may have to pay for air if the population were to become that large. My breathing hastens that day.
The elimination or reduction of negative externalities is a public good. The production of positive externalities is also a public good. Hoppe destroys public goods here:
https://mises.org/journals/jls/9_1/9_1_2.pdf
Clayton -