World Destruction

Leah Archer – Honorbound

In Naked Economics, Charles Wheelan discusses externalities.  He defines an externality as “the private costs of my behavior are different from the social costs,” [1]  meaning that what a person decides to do in their own time can affect society as a whole indirectly. Keep in mind that an externality and an effect are NOT the same thing; an effect is a result or a consequence of an action.  Externalities can be positive or negative; however, negative externalities can produce good incentives to better the environment or economy.   When the gas prices dropped drastically in 2014 from around $4 a gallon to less than $2 a gallon, car sales increased because people’s purchasing power increased; however, the increase in car sales resulted in more traffic, which resulted in more pollution and more accidents.

People always complain about traffic, but if you think about it, you are the traffic.  Someone may be causing you to be late, but you are causing someone else to be late too.  But do you ever think about how you driving on the Tollway at 5:30 in the evening is causing someone else to be late?  No.  I cannot ever say that I do.  I always think, “Man, if all of these people weren’t on the highway right now, I wouldn’t be running late to soccer practice.”  When I decide to get on the highway, I don’t think that I am part of the cause for someone else being late; to me, it is my everyday normal routine.  My private choices are effecting someone else.  This is an example of a negative externality.

When the gas prices were at an all-time low, I was so excited because that was when I was getting my very first car.  It was no problem for me to fill up my tank because it would only be around $20 for the full tank.  But not once did I ever consider how my driving would increase the pollution in the air.  How because prices were so low that I could drive all over town without a single thought about all the gas I was wasting and how much pollution my car was releasing into the air.  When you bought your car, did you ever think about how much pollution you would be releasing into the air? Well according to the Union of Concerned Scientists, “In 2013, transportation contributed more than half of the carbon monoxide and nitrogen oxides, and almost a quarter of the hydrocarbons emitted into our air.”[2]  By someone driving a car, that person is causing health issues for the world and ruining the environment.  Sounds harsh, but it is the truth.

Our individual choices affect all of the people around us but most of the time, we don’t think twice about it.  For example, Charles Wheelan makes a claim stating, “The problem is that all of the individuals affected by a market transaction may not be sitting at the table when the deal is struck.”[3]

[1] Wheelan, Charles J., and Burton Gordon Malkiel. Naked Economics: Undressing the Dismal Science. New York: W.W. Norton, 2010.

[2] “Cars, Trucks, and Air Pollution.” Union of Concerned Scientists. December 5, 2014. Accessed October 19, 2016.

[3]Wheelan, Charles J., and Burton Gordon Malkiel. Naked Economics: Undressing the Dismal Science. New York: W.W. Norton, 2010.


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