“Externalities”

In fact, externalities are “external” only in the language of conventional economics and conventional politics, for those who benefit from them.  They are external to the system of economic power and its intellectual representations, to the hierarchy that produces the dominant discourse and practices. They are gains (“positive externalities”) for hegemonic classes, groups, and countries, and often a condition of their prosperity, and are externalized by power practices and conventional accounting, which are power relations embedded in law and accepted business practices. But they are indeed negative for those groups (subaltern classes and groups, dominated regions, etc.) at the periphery of power formation. “Negative externalities” is econ-speak to avoid the much more damaging concept of “structural contradictions,” and serves to hide the fact that negative externalities trickle down the power ladder while the lion’s share of positive externalities moves up the power ladder. One example is how first-world corporations, consumers, and societies transform developing countries and poorly regulated countries with weaker civil societies, into pollution havens by exporting their polluting activities and dumping their industrial waste.

The notion of “lawful economic activity” provides yet another example of this cloaking strategy. Free-marketers argue that capitalism is essentially benevolent since it operates within the law, the highest authority in democratic nations and organized societies.  Yet the integrity of the law is increasingly corroded by regulatory capture; and the law’s social purpose – to serve the common good by allocating rights and responsibility and organizing accountability fairly – is systematically highjacked by economic forces. The powerful make the laws and break them with impunity; they institute one set of laws for the best and another set of laws for the rest. They set a public law for the dominated and a private law for themselves, a privus lex, a privilege. Examples of this corruption of law and democracy include banks that are too big to fail, the shielding of individual criminal executives from penal responsibility, and the mobilization of public resources for corporate welfare and bailouts of misbehaving finance institutions.  Michel Gueldry: “The double discipline of neoclassical economics”