“Externalities,” or “beware the meta-framing”
“Not everything that counts can be counted, and not everything that can be counted counts.”
Sign on Albert Einstein’s door.
It’s become standard (rightly) to point out that there are such things as “externalities” – things not counted in the economists’ calculations of cost and benefit. The whole point of being powerful is that you keep the benefits and dump the costs on someone else. Robert Webb said it well in a recent article called “Goose steps and mass graves. We’re only trying to save the world” when he wrote that he could “enjoy a visit to ClarksonWorld along with the next man, but I can’t live there. All the rides are free because someone else is paying.”
But the problem lies deeper than this. Johann Galtung [the Norwegian sociologist and peace theorist] is very good on what baggage the very word “externalities” implies. In his 1989 book “Solving Conflicts” he writes
They [economists] have a word for what they have left out: externalities, thereby indicating that what is external to the economist’s theory is also external in the sense of being marginal in relevance. In doing so they imply that an economist’s brain is relatively central in the universe; other people are handling peripheral matters. Page 29
A little later on he writes
The most exploitative pattern … is to push all the negative externalities onto somebody else, retaining the positive externalities for oneself. And that, I am afraid, is the major reason why economists leave out the externalities. They are not stupid; it is not that they do not know that externalities matter. But they have an implicit pact with the establishment not to mention the unmentionable; not to speak the unspeakable. Pushing these points you will find tenured economics Professor Dr. X saying, “Of course it is like that. But you know I cannot say it; there will be no funding available.” If he does not have tenure yet, Dr. Y will say, “I will not get my tenure.” They are probably both right. Page 32