What's a mispriced externality? You mentioned that at some point during our podcast an

externality is when there is an additional cost that is imposed by whatever product is being producer consumed that is not accounted for in the price of the product

Sometimes you can fix that by putting the price back into the product one of the most

ardent ways people attack capitalism these days is that it's destroying the environment and

If you throw away capitalism because destroying the environment then guess what we're all headed back to

pre-industrial times is not going to be a good thing so rather

There's an externality because the environment is finite the environment is precious and we have to price it properly and fold it back in if

people are wasting water or putting hydrocarbons in the atmosphere or polluting things you want to charge them

What it costs to clean up that pollution return it to a pristine state?

Perhaps that price has to be very very very high if you raise that price high enough you knock out pollution

It's much better than feel good measures where we're just gonna ban plastic bags and we're gonna say don't take showers and

Saturdays and Sundays when we're having a drought

California likes to run

Declarations and ads to scare you into not taking showers and times when there's a drought when it would be just much better to raise the price of

Fresh water your average consumer might pay a few pennies more for a shower

But then the almond farmers who consume a lot of the water will cut back on using fresh water and

Almond farming may move to a part of the country where water is more abundant

Properly pricing externalities can save resources in an intermended way

It's a good framework to think about how to be effective when you want to do things like save the environment

Rather than feel good things that won't actually amount to anything