Economic Update: Externalities & Capitalism’s Inefficiencies
- January 11, 2021
A weekly show focusing on the economic dimensions of everyday life and alternative ways to organize our economy and politics, with Prof. Richard D. Wolff.
- Author
This program introduces the economic concept of “externalities.” Those are the real costs of employers’ business decisions that employers do not pay for or take into account: costs “external” to businesses’ profit/loss calculations.
Examples include costly damage to the environment, to employees’ private lives, etc. Those real social costs are external and additional to capitalists’ private costs. Therefore, capitalists’ investment decisions based on comparing costs and revenues do NOT take into account the real, external costs. Thus their decisions are not “efficient.”
Capitalism never was the efficient system its apologists claim.
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Source URL — https://roarmag.org/2021/01/11/economic-update-externalities-capitalisms-inefficiencies/
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