Externalities always felt glossed over in economics. So yes this business will ruin the river for everyone but please direct your attention to this chart and look at all that producer surplus!

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dfc 3 hours ago | parent | next [-]

One of my favorite readings from undergrad and grad school was "The Problem of Social Costs" by R. Coase. I'm sorry you think externalities are glossed over by economics, but Im excited to tell you that this is certainly not the case. Coase won the Nobel Prize in economics in large part for his work on externalities. They don't hand out Nobel prizes for glossed over topics. It's definitely worth a read of you wish economics paid more attention to externalities:

https://www.law.uchicago.edu/sites/default/files/file/coase-...

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smallmancontrov 2 hours ago | parent | next [-]

I suspect the person you are replying to was not referring so much to academic economists as a whole (which would include Coase and Piketty and even probably Marx) but rather the mercenary subset of economists who get signal-boosted by powerful interests in order to promote the self-serving narrative of the day, and yeah, that subset of economists dodges subjects like inequality and externalities with more finesse and agility than Neo dodging bullets in the matrix.

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idiotsecant 23 minutes ago | parent | prev | next [-]

The gutter mud soaked knife-fight practice of economics and the erudite study of economics is one of the more jarring discontinuities between how we talk about how something works and how it actually does.

The consideration of externalities that don't impact the bottom line is so alien to the real observation of the rites of capital that it might as well be written on the inside of a particularly boring rock in the oort cloud.

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cperciva 2 hours ago | parent | prev [-]

They don't hand out Nobel prizes for glossed over topics.

Leaving aside the fact that the Economics prize isn't actually a Nobel Prize, topics which historically haven't been given enough attention are exactly where the highest impact research takes place.

If externalities had always received the attention they deserved, Coase would have never received his prize, because his work would not have been so important.

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dghlsakjg 2 hours ago | parent [-]

Coase did his most relevant work in the 1950s, and it wasn't as if he invented the idea of externalities. It was first given serious academic weight in the 1890s, and Pigou created the concept of externality correcting taxes in the 1920s. His work was important because it proposed a more market based solution than Pigouvian taxes.

I think its safe to say that externalities are not, and were not, an ignored sector given more than a century of serious work, and the fact that it is covered in any intro level Econ course.

	▲	cperciva an hour ago \| parent [-]
		There's a wide gap between "ignored" and "received the attention they deserved".

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dgellow an hour ago | parent | prev | next [-]

Decision makers ignore externalities. Economists definitely not, it’s pretty much what their field of study is about

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daedrdev an hour ago | parent | prev | next [-]

Econ 101 often ignores side effects, but I don’t think economist has a whole ignore side effects. That’s like one of their main topics of study.

	▲	ripley12 an hour ago \| parent [-]
		Externalities were a very big part of my first-year microeconomics course circa 2008, FWIW.

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BurningFrog 2 hours ago | parent | prev | next [-]

This is a bit like the critique of physics that they ignore friction.

It turns out that for many purposes friction and externalities are small enough that they can be ignored for most purposes.

Physicists and Economists are very aware of the tradeoffs.

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Imustaskforhelp 3 hours ago | parent | prev [-]

At a certain point, businesses and the world in general focus way too much on the directly measurable rather than the accountance of the immeasurable (downstream effects)

Although, I am all for a data driven world but somehow it is my opinion that we have ended up with the worse of both as combined with the goodhart's law, this measurable thing just ends up somehow getting manipulated for short term gains over real long term damages.

As is your case in the example, the business will ruin the river for everyone having severe damage both culturally and I think financially as well given downstream effects of all people depending upon that river.

But the business has externalized the losses to the people and the people have externalized the responsibility of the river to the government and the government believes in absolute free capitalism! (or sometimes the businesses give the government some money in the pocket ie. corruption. "Cost of doing business" they said.)

I am not against capitalism itself (that Adam smith proposed) but capitalism in its current form is definitely something... and surely some if not most of us might agree to the fact that system isn't working as intended (well not working if it was intended for us ie.)