Freedom of Externality

I was listening to a program on Economics last night. (What can I say, 999 Channels and nothing to watch.) And the term Externality came up. And I really did not know what this was. Now I know, Externality, simply put, means getting someone else to pay the costs of your assumptions.

A polluter, for example, considers air or water free. For him, dumping pollutants into the air or water is a cheap way to dispose of wastes. Yet, his actions do involve costs because he affects the alternatives that others face. The polluter may make others forego clean water. One could say that the polluter imposes some costs of production on others…

This explains many things, both in the government and the current ultra-capitalist culture we live in.

• Oil Cartel I want/need cheap oil = get the government to attack Iraq, and secure it for you.
• George Bush I want to be a war president (to make me famous) = Start a war (with any justification).

Somebody else just has to pay up the costs.

Because the producers of externalities do not have an incentive to take into account the effect of their actions on others, the outcome will be inefficient…As noted, external costs also can imply political conflicts, rancorous lawsuits, and the like.

They left out one solution, Impeach Bush.