
Ask HN: Why are we as a society unable to account for negative externalities? - thinkloop
It doesn&#x27;t seem like there are many hinderances to incorporating the costs of negative externalities into our products.<p>We have accurate data on what the costs are, we have the rule of law, foreign actors who do not abide by the same regulation can be taxed or banned. Why do we not simply charge corporations for external harm they do so that costs can can be passed on to customers thereby adjusting demand of harmful products appropriately? What is the blocker?
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dragonwriter
> Ask HN: Why are we as a society unable to account for negative
> externalities?

Because (1) externalities, especially diffuse ones, are often difficult to
objectively assess in magnitude (this is true of some internalities, too,
which is a source of market failure), and (2) the people who benefit most from
not accounting for externalities are also the people with disproportionate
power in society.

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danm07
Externalities usually become obvious after the fact. The problems we aim to
solve through our inventions are multi-dimensional topologies. Like tree, at
any given point we can only see portions of it, leaving other perspectives
unaccounted. Trimming leaves or branches would reveal deeper previously unseen
parts.

The human brain and our tools thus far are more adapted to solving linear
problems, so the higher the dimensionality and non-linear the relationships,
the less we're able to produce determinist results.

I personally believe problems of this kind we cannot arrive at perfect
solutions, only optimal ones. By optimal, I mean making trade-offs on certain
variables so as to minimize total cost. The weights are also variables
depending on trends of the epoch (environmental factors not such a big deal a
decade ago, big deal now --> need to update our equation)

The other factor comes as a form of bureaucracy. It takes time to push the
change through the chain of politics, re-aligning incentives, carving new
markets and distribution channels, changing market sentiments, etc.

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PaulHoule
There are many problems

See
[https://en.wikipedia.org/wiki/Pigovian_tax](https://en.wikipedia.org/wiki/Pigovian_tax)

For instance estimates of the "social cost of carbon" vary widely

[https://19january2017snapshot.epa.gov/climatechange/social-c...](https://19january2017snapshot.epa.gov/climatechange/social-
cost-carbon_.html)

one of the most important factors is the "Discount factor" which is highly
subjective. (How much do we care about 10 years from now as opposed to 1000
years from now?)

Some people don't like the idea that "rich people" get the right to pollute.

In some cases "paying money" might just legitimize bad behavior. A day care
center in Tel Aviv tried charging people money if they picked their kids up
late, it was not successful at letting the staff leave home early because some
parents decided it was worth paying the fee.

~~~
wnkrshm
If there is a fine involved with a certain behavior, this can commoditize the
behavior in a way - it's an extra option that you can buy.

An interesting historical example for this may be the trading of indulgences
(pardons for sins) in the late Middle Ages.

When (parts of) the church started to sell indulgences, so that people could
pay for spending less time in purgatory for minor sins lead to a veritable
explosion of trade with absolution of sin, financing wars, construction
projects etc. Minor sinning was suddenly not that serious anymore for the
wealthy and the church gained even more economic power.

Indulgences were even sold for dead relatives. Think about your family
worrying for the soul of your dead aunt (who had a bad habit of blashpheming)
and trying to scrape together what is effectively ransom for an imaginary
hostage...

While the rich were relatively fine with the system, the poor were now even
discriminated against in the afterlife, since they couldn't just buy their
dead realtives or themselves a shorter time in purgatory. In some
theologicians' eyes this clashed with dogma and to the public would end up as
one factor driving the reformation.

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cdvonstinkpot
IIRC what you're talking about is called "True Cost Economics". I first read
about it years ago, & when I look for the article now it's a 404.

However I was able to find an excerpt here:

[http://www.utne.com/community/truecosteconomics](http://www.utne.com/community/truecosteconomics)

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tfolbrecht
Let me rephrase this to annoy you. Why are we as a society unable to account
for positive externalities?

They're externalities. You're probably wrong in the grand century scale scheme
of things, heck you're probably wrong in the 5 -10 year scale of things.

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mbrock
That's a really good question flip.

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quickthrower2
Because the negative externalities don't affect the balance sheets of
companies. However the companies with the biggest profits can lobby
politicians more effectively. They can also pick their favorite jurisdictions
to operate from.

~~~
alimw
This comment gets closest to the heart of things. Such costs can only be
imposed by the state, but the state has limited power/desire to do so.

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baddox
Isn’t it fundamentally an inherent game theory problem? Why don’t prisoners
cooperate in the prisoners’ dilemma?

