Thursday, October 29, 2009

What is an externality?

According to Forbes Investopedia: A consequence of an economic activity that is experienced by unrelated third parties.

Fossil-fuel companies, real-estate developers, and automakers in the U.S. have made profits for years from the auto-system of human transport. Many economists have hailed the "great success" of the "American way of life." But these profits have uncounted costs - externalities. The people of Ecuador are paying for the auto-system "miracle" with higher cancer rates, a consequence of an economic activity that is experienced by unrelated third parties. read more on CommonDreams or click here for a list of autosprawl externalities.

1 comment:

Sue | Vehicle Financing said...

I think that that this is just plain awful, and it seems to go unnoticed and will continue to do so I think for years to come, until someone actually stands up and take the bull by the hands and changes this.
The next question is who would that be?
Very interesting post thank you for sharing.