Comment by epgui
21 days ago
I think this is naive, because a flaw of such free market thinking is its failure to price in externalities. That’s what the relationship with the climate crisis link was about.
21 days ago
I think this is naive, because a flaw of such free market thinking is its failure to price in externalities. That’s what the relationship with the climate crisis link was about.
How is the environment, which is directly of concern to the primary economic sector, and to the entire economic enterprise in the long run, an externality?
It’s actually the classic textbook example.
https://www.investopedia.com/terms/e/externality.asp
Unless you are studying an a priori science, textbook examples are pedagogical simplifications. Yes, the cost of environmental pollution is paid neither by factories nor their customers, yet both suffer the consequences, and as such are not "uninvolved" with the third party, as the definition goes.
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