Editing Externality (section)

==Criticism==
[[Ecological economics]] criticizes the concept of externality because there is not enough [[Systems thinking|system thinking]] and integration of different sciences in the concept.
Ecological economics is founded upon the view that the [[neoclassical economics]] (NCE) assumption that environmental and community costs and benefits are mutually cancelling "externalities" is not warranted. [[Joan Martinez Alier]],<ref>{{cite book|last=Costanza|first=Robert|title=Getting Down to Earth: Practical Applications of Ecological Economics|year=1996|publisher=Island Press|location=Washington, D.C.|isbn=978-1559635035|author2=Segura, Olman|author3=Olsen, Juan Martinez-Alier|url-access=registration|url=https://archive.org/details/gettingdowntoear0000unse}}</ref> for instance shows that the bulk of consumers are automatically excluded from having an impact upon the prices of commodities, as these consumers are future generations who have not been born yet.  The assumptions behind future discounting, which assume that future goods will be cheaper than present goods, has been criticized by [[Fred Pearce]]<ref>Pearce, Fred "Blueprint for a Greener Economy"</ref> and by the [[Stern Report]] (although the Stern report itself does employ discounting and has been criticized for this and other reasons by ecological economists such as [[Clive Spash]]).<ref>{{cite web|url=http://www.clivespash.org/EE2007_SpashonStern.pdf |title=Spash, C. L. (2007) The economics of climate change impacts à la Stern: Novel and nuanced or rhetorically restricted? Ecological Economics 63(4): 706–13 |access-date=2012-12-23 |url-status=dead |archive-url=https://web.archive.org/web/20140202105133/http://www.clivespash.org/EE2007_SpashonStern.pdf |archive-date=2014-02-02 }}</ref>

Concerning these externalities, some, like the eco-businessman [[Paul Hawken]], argue an orthodox economic line that the only reason why goods produced unsustainably are usually cheaper than goods produced sustainably is due to a hidden subsidy, paid by the non-monetized human environment, community or future generations.<ref>Hawken, Paul (1994) "The Ecology of Commerce" (Collins)</ref>  These arguments are developed further by Hawken, [[Amory Lovins|Amory]] and [[Hunter Lovins]] to promote their vision of an environmental capitalist utopia in ''[[Natural Capitalism: Creating the Next Industrial Revolution]]''.<ref>Hawken, Paul; Amory and Hunter Lovins (2000) "Natural Capitalism: Creating the Next Industrial Revolution" (Back Bay Books)</ref>

In contrast, ecological economists, like Joan Martinez-Alier, appeal to a different line of reasoning.<ref>Martinez-Alier, Joan (2002) [https://books.google.com/books?id=4JIzg4PUotcC The Environmentalism of the Poor: A Study of Ecological Conflicts and Valuation]. Cheltenham, Edward Elgar</ref>  Rather than assuming some (new) form of capitalism is the best way forward, an older ecological economic critique questions the very idea of internalizing externalities as providing some corrective to the current system. The work by [[Karl William Kapp]]<ref>Berger, Sebastian (2017). ''The Social Costs of Neoliberalism: Essays on the Economics of K. William Kapp''. Nottingham: Spokesman.</ref> argues that the concept of "externality" is a misnomer.<ref>Kapp, Karl William (1963) The Social Costs of Business Enterprise. Bombay/London, Asia Publishing House.{{page needed|date=April 2019}}</ref> In fact the modern business enterprise operates on the basis of shifting costs onto others as normal practice to make profits.<ref>Kapp, Karl William (1971) Social costs, neo-classical economics and environmental planning. The Social Costs of Business Enterprise, 3rd edition. K. W. Kapp. Nottingham, Spokesman: 305–18</ref> [[Charles Eisenstein]] has argued that this method of privatising profits while socialising the costs through externalities, passing the costs to the community, to the natural environment or to future generations is inherently destructive.<ref>Einsentein, Charles (2011), "Sacred Economics: Money, Gift and Society in an Age in Transition" (Evolver Editions)</ref> Social ecological economist Clive Spash argues that externality theory fallaciously assumes environmental and social problems are minor aberrations in an otherwise perfectly functioning efficient economic system.<ref>{{cite journal |last1=Spash |first1=Clive L. |title=The Brave New World of Carbon Trading |journal=New Political Economy |date=June 2010 |volume=15 |issue=2 |pages=169–195 |doi=10.1080/13563460903556049 |s2cid=44071002 |url=https://mpra.ub.uni-muenchen.de/19114/1/MPRA_paper_19114.pdf }}</ref>  Internalizing the odd externality does nothing to address the structural systemic problem and fails to recognize the all pervasive nature of these supposed 'externalities'. This is precisely why heterodox economists argue for a heterodox theory of social costs to effectively prevent the problem through the precautionary principle.<ref>Berger, Sebastian (ed) (2015). ''The Heterodox Theory of Social Costs'' by K. William Kapp. London: Routledge.{{page needed|date=April 2019}}</ref>