What, Exactly, Are Negative Externalities?

Economics textbooks feature a coherent theory of how markets can allocate scarce resources in ways that achieve what is plausibly described as maximum possible human satisfaction. This theory is grounded on certain foundational assumptions, such that the existing ‘distribution’ of wealth is legitimate, that each adult is a rational actor who knows his or her preferences and circumstances better than does anyone else, and that no one person’s or group’s preferences count for more than do those of any other person or group.

Read the full Explainer here.