Probably nothing new here, but I am writing a paper on something, and i ended up ranting.
Comments welcome - especially those that tell me where I am wrong.
Thanks.
I hate thinking about economics. Because the more I do, the less clear things become. I'm beginning to feel that the only way one can justify the concept of negative externalities, is by referring to the moral principle that it is illegitimate to violate anyone's personal property. Yes, I know, that's what economists argue... except that this eliminates the existence of positive externalities, since they do NOT violate anyone's personal property.
Furthermore, the decision what are positive or negative externalities is purely subjective. Some people might enjoy hearing my singing in the bathroom, while others may hate it. That would mean that those who love it have to compensate me for doing it, or at least pay me for doing it more, since I don't produce it enough, while those who hate it have the right to shut me up. But when they shut me up, the ones who loved it are now deprived of their positive externalities and have to go after those who shut me up for compensating them for the loss. That is sheer madness. Pollution is the same, after all: the cheaper production of cars based on the externalized costs benefits the car owners, but is bad for those who hate pollution. So we stop the polluter form imposing on the others, but then have to compensate the car owners for their loss? This is STUPID. Bees, now here is a positive externality everybody loves: bees are good for the crops of apple farmers, so they should compensate hobby bee keepers. But what about the plant breeder whose research gets messed up by the damn things? Should he be compensated? Of course, none of this is a problem as soon as we stop talking about social costs, and focus on two aspects: losses of individuals, and time. Let's take the bees; the researcher hates the damn things and goes to the bee keeper and tells him to stop the nonsense, because it hurts his property. IF the beekeeper was there first, the researcher is SOL, and has only one option: pay the beekeeper enough to stop him from flying bees. If the researcher was there first, the beekeeper has to pay the researcher enough to put up with the buzzing nuisances - or desist, if the researcher says 'no way, jose'. IF we start talking about 'social benefit', and ignore the time factor, and say: we, as a society, think that beekeeping trumps research, go and eat your hat, you white coat, then we also state that personal property can be violated. So the inviolability personal property becomes contingent on social, that is: political, decision making. Which means that the PREMISE of externalities goes out of the window (the inviolability of property rights). THAT in turn means that in the final analysis, all economic decisions are dependent on political decision making, in other words: aesthetics and morality of the day trump economics. The concept of externalities divorced from the principle of inviolable personal property and precedent (? is there a word for first-come-first-serve??) is, in the final analysis, Communism. NOT including time into the analysis creates a complete analytical nightmare. WHY DOESN'T ANYBODY SEE THAT? The concept of 'social cost' is sheer nonsense, except if we simply define it as the aggregate of all economic transactions.