Socialized Costs for Private Profits
What is the cost to society of allowing businesses to externalize costs (even as many leaders go on and on about supporting a ‘free market’)? These ‘externalities’ — costs that are incurred as a result of an economic activity but not borne by the business or reflected in the price — have been described by some as a capitalist treatment of profits coupled with a socialist approach to cost.
The impacts on environmental justice, health, the food system, and global warming are huge. For example:
- Farmers use synthetic fertilizers & pesticides that pollute our aquifers, create ‘dead zones’, kill bees and other pollinators, contribute to global warming, and cause enormous health costs. But the chemical manufacturers are allowed to sell these damaging products while society has to pick up the costs.
- Coal sells for about $50/ton, but the cost incurred by society is estimated at over $200/ton when you factor in the environmental destruction from mining, the health costs to individuals & communities, and the impact of GHG emissions on global warming.
What other industries would be good examples?
In some ways, this may be closer to an independent study than an internship, but we do need to produce a report, poster, and/or presentation to inform the public. This would be appropriate for anyone with an interest in public policy.
At first glance, it seems that requiring manufacturers to price their products to reflect the true cost would have dramatic effects on their (and customers’) choices because most of the externalized costs are not borne by the people who use or profit from the products.
What would happen if we were able to require pesticide manufacturers to fund all needed remedial efforts and health costs? …coal companies to deal with waste, pollution, and health impacts in socially and environmentally- and socially-responsible ways?
‘Serving healthy and sustainably grown food is as essential to the health of our community as the medical care we provide.’
—Siobhan McNally, MD; Pediatrician, Berkshire Medical Center
Updated March 2018