OK boys and girls, time for a little review of an arcane notion of economics that is the darling of socialists cooking up ever more ways to make our lives miserable. An externality of some good or service traded at market price is the attributed added cost to society that the consumption of such a good or service entails. For example, consider the hamburger you had for lunch. The progressive sees that hamburger as being the source of all kinds of additional costs that are not reflected in the price you paid for it, costs like treating diseases resulting from national obesity to costs of manmade global warming resulting from all the cow farts collecting in the upper atmosphere.
As you might guess, the progressives’ solution to this ‘problem’ is to increase the hamburger’s price by a tax levied to pay for fixing all the subsequent externalities that might arise due to the consumption of hamburgers. In their enlightened brave new world, such additional costs would be added to the trade of every item in an economy onto which they can pile some externalities. According to their thinking, this type of accounting would pay for itself by finally making the purchase of goods and services ‘externalities neutral’. Light thinkers at this point begin to feel fuzzy and warm all over – why didn’t they think of that?