Phil Wallach

Back in my old Uni days I was studying economics, mainly because I was told that this was the best adjunct to my chosen career - Law (which never happened BTW).

Economics should have been more interesting than it was, but it was one of those subjects that the life had been sucked out of.  Except for one rare exception:  in one elective course I came across the concept of “internalising externalities”.  This is basically forcing economic agents (people or companies) to pay for the costs they inflict on others.  Examples were smelters raining down chemicals on vineyards in the Hunter Valley (clear economic cost), or chemicals being dumped into a river and forcing the river to be closed (some costs obvious, some non-obvious and hard to quantify).  When I heard this idea it made instant sense, and seemed a sensible way to solve the whole free-rider problem that plagues our capitalist society.

However I have never heard a mention of it since, it seems to have vanished back into academia (maybe it never escaped) or may even be extinct.  And it was such a neat idea too!

And now here we are talking about the same problem.  But the solution seems to have escaped us.

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