Externalities: Difference between revisions
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An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer. An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole. In business, if an entity is looking to maximise profit it will aim to privatise profits and socialise the losses. | '''An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer. An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole. In business, if an entity is looking to maximise profit it will aim to privatise profits and socialise the losses.''' | ||
It's easy to come to the opinion that there is an evil villain capitalist making lots of money and pumping externalities into the environment. Whilst this may be true in some cases perhaps the [[relativity of ethics]] can excuse some of the culprits. If you did not have something on the lowest [[Maslow's hierarchy|Maslow Hierarchy]] rung would you not jeopardise the anonymous other? | |||
Revision as of 00:16, 19 May 2022
An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer. An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole. In business, if an entity is looking to maximise profit it will aim to privatise profits and socialise the losses.
It's easy to come to the opinion that there is an evil villain capitalist making lots of money and pumping externalities into the environment. Whilst this may be true in some cases perhaps the relativity of ethics can excuse some of the culprits. If you did not have something on the lowest Maslow Hierarchy rung would you not jeopardise the anonymous other?