Avoiding Negative Externalities - a theory with specific examples - Part 1

post by M. Y. Zuo · 2021-11-12T04:09:32.462Z · LW · GW · 4 comments

Ye who listen with credulity to the whispers of fancy, and pursue with eagerness the phantoms of hope; who expect that age will perform the promises of youth, and that the deficiencies of the present day will be supplied by the morrow; attend to the history of Rasselas, Prince of Abyssinia negative externalities. 

- Samuel Johnson

This will be my first post on LW, hopefully some will find it enlightening.

1.1 Preface

It is customary to adorn the beginning of any undertaking with words of encouragement, high hopes, premonitions of great triumphs, and the possibility of accolades from far and wide. Those readers who have already pondered over these precepts have likely grown to a stage of development beyond the need for further enticements with the fruits of higher realms of learning. If all that has been written before, here and elsewhere, has not yet satisfied you, the imperfect ramblings of my thoughts will likely not suffice. Although what I write may yield treasures disproportionate to effort invested in exceptional circumstances, it is far more likely to merely supplement the existing modes of thought in operation among many of the readership. 


1.2 Introduction - Why care?

For as long as mutli-cellular organisms have existed there has been a need to cooperate to survive the changing tides of fortune. Among the many forms and schemes of cooperation effected so far on this Earth to survive these forces, none are considered more advantageous, in the reckoning of human society, than those that which rewards the architects of such designs disproportionately beyond any tabulation of their invested effort. The prospect of any increase along an exponential curve is thus minutely analyzed in the hopes that the multiplication of mankind’s desires can continue forevermore. 

Historically, the greater the realized return, the more advantageous it is considered to be among the broad ranks of society. There thence arises a peculiar form of cooperation that seeks to maximize potential returns with the least possible regard to the resulting consequences. A notion that has engendered innumerable triumphs and innumerable villainies throughout the course of history, the exemplars of which are too many to enumerate. Suffice it to say every human action from tribal competition to chattel slavery to armoured warfare and every human idea from record keeping to atomic theory to binary logic has yielded consequences far beyond that which had been commonly predicted at their inception.

Among the most odious of achievements regarded by current readers would be those that have retarded the progression of mankind and deluded their propagators with dreams of their own destruction disguised as dreams of advancement. But is it not obvious, you may ask, which schemes, which designs, will retard the further progress of mankind? Is it not obvious which are offering false hopes?

And the answer, all too often the case, is No. The niceness and sophistication of discernment prerequisite for reliably distinguishing among the subtle possibilities and potentialities of such proposals are developed only through strenuous effort and ample reflection over the course of a long period filled with the observations of the varying scenes of life, even for those of the greatest resources and most fortunate upbringings. And among those who attain these faculties, many do not develop them until far too late in life to carry through new designs. Thus the perpetual lament of the aged arises when reflecting on the youth, if only they did not waste their time! 

But what use are these thoughts if we believe to have already attained such niceness and sophistication, or at least high honours, ranks, emoluments, fame, emotional wellbeing, familial comforts, genuine friendship or even just greater rational intelligence at an early or middle age? After all, how can we do even better? Is it not too great a burden to place oneself at the times of greatest importance, these reservations about potential consequences reaching to infinity?

And therein lies the tension of the human condition, to consider more, to examine more, to allow greater time for decision making, these are all widely agreed to be righteous and desirable when in the luxury of leisure and repose, but altogether ridiculous when the action is at hand. Ironically, as is often the case in the sublunary realm, during the times of greatest urgency is when there is the greatest benefit to calm and careful calculation and during times of boredom is when there is the greatest benefit to spontaneity and carefree adventure. It is only due to the imperfection of mankind that we proceed, generally, along a different direction. 

So for those without the accommodations of learning and for those without the necessary desire to confront every reservation, what easy precepts are available to guide them to the way most advantageous to the further promotion of civilization while avoiding the pitfalls of the past? 

For those who wish to proceed without making any sacrifices at all, there are none, at least not any yet identified. But for those who are willing to make some small sacrifices there are numerous ways to greatly increase their virtue, their renown, and the wellbeing of society simultaneously. 


1.3 What is a Negative Externality?

Externalities, beyond the narrow practice of mathematical economics, can be though of as consequences arising from factors not explicitly considered in prior calculations. It can involve a moving target, so to speak, as society progresses greater understanding will illuminate a wider swath of territory to allow for more comprehensive calculations. It is also, properly speaking, describing things after the fact, as we can only be completely sure whether externalities really occurred after the events transpired, nature does have a tendency to operate in unexpected ways. When referring to the future it always means potential externalities.

The pitfalls mentioned previously, arising from historical forces, are examples of a class of effects resulting from dynamic systems known as ‘negative externalities’. That is negative consequences arising from factors not explicitly considered in prior calculation. There is an implicit moral component as negative must be defined in accordance with some conception of the world, yet by and large the vast majority of adults in the advanced societies agree on moral components enough to coordinate the construction and maintenance of  large organizations intentionally designed to compensate for these effects. Although this is in of itself a recursive coordination problem, the intricacies of which are too complex to lightly discuss, there nonetheless are credible reasons to believe that going forwards this type of coordination can be maintained and even enhanced with sufficient effort. You will have to accept it as a premise.

The careful reader should note that moral terms, such as ‘positive’ and ‘negative’ fluctuate over space-time in terms of what they encompass. So comparing the opinions of different ages and different societies may generate noticeably different result. This is an unavoidable phenomenon that ideally should be compensated for, but in practice tends to be ignored.

The methods to reduce these effects can be considered as ways to avoid negative externalities. But note that there is no known design that can entirely eliminate externalities, positive or negative, as the calculations and projections of human enterprise will always be insufficient in some manner or another. In fact it’s quite possible for certain designs to further promote what they seek to diminish or diminish what they seek to promote. Addressing and overcoming these foibles of human endeavours I leave to superior writers.


1.4 Identification of such effects

The most commonly remarked upon perceptions of negative externalities are when the results are so obviously and immediately injurious to any random passer by, that the occasion warrants special attention even during the pressures of extreme circumstance. 

The archetypical example is poisoning the well. Seeing poison being dumped into a well is almost never ignored, and usually heavily punished by the local community reliant on the well. In fact such actions are very often heavily woven into cultural taboos in areas where water sources are scarce. During the frequent conflicts among rival Muslim factions in the middle ages, there was a very stringent prohibition on poisoning wells in the more desert-like areas, which was usually carried out in more lush regions by dumping bodies in the water, even during the most desperate retreats from enemy forces that otherwise preceded, or resulted from indiscriminate killing. The primary reason was that the retreating faction would inevitably like to regain the lost territory, which would be pointless, in fact burdensome, if the only water sources were poisoned and unable to sustain any human life for many years. 

In fact this phenomena is so well understood to be dangerous that it serves as the warning whenever someone is perceived to engage in activities profoundly deleterious to a group they are a participant of. 

From this example certain salient features of negative externalities can be derived.

  1. Negative externalities involve some tangible loss to all parties involved.
  2. The losses are usually unrecoverable by human technology.
  3. They are asymmetrically injurious compared to the required effort.
  4. They generates complex cascades of effects that cannot be entirely predicted.
  5. There is a possibility of entirely, or almost entirely, avoiding any losses if there is sufficient coordination ahead of time.
  6. They are linked with some human action, or a series of actions.
  7. Long lasting.

Several other features can be derived but the aforementioned are sufficently comprehensive to be useful for further examination. 


1.5 Further examples 

As the previous example is part of a broader category of pollution effects, there stands to reason much fertile ground to examine with human pollution. Indeed, it’s nearly unanimously agreed that practically all types of human pollution can be considered as negative externalities. Some examples include 

  1. dumping pollution in the form sewage, industrial waste, etc., into rivers and other bodies of water
  2. releasing pollutants into the air in the form of CO2, ozone depleting gasses, diesel fumes, and so on
  3. soil contamination by various chemicals
  4. noise pollution
  5. light pollution
  6. even potential contamination of distant planets and moons by our exploratory probes
  7. and so on

Pollution effects themselves can be considered as part of a broader category of effects resulting from human interactions with the surrounding environment that are still widely considered to be negative but not quite as universal as pollution.

  1. Decline in biodiversity
  2. Or the opposite, allowing certain species to overpopulate
  3. Changing landscapes that reduces their beauty
  4. Building tall buildings in dense urban areas that block the views of neighbouring residents, leaving them in permanent shadow, etc.
  5. and so on

Human interactions themselves often generate widely agreed upon negative externalities, though with much debate as to the degree of severity and whether its proper for broader society to care about, such as

  1. Traffic
  2. Violent crime
  3. Addiction
  4. Fanatical cults
  5. Obesity
  6. Political infighting
  7. Social status competition
  8. and so on


1.6 Useful methods to counteract injurious negative externalities



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comment by Sean McAneny (sean-mcaneny) · 2021-11-12T08:54:21.919Z · LW(p) · GW(p)

Great post; I will be following along! I appreciate both the lucidity of your explanation and the Johnsonian prose which is something I only ever dream of producing myself. In your opinion, what are some negative externalities that are NOT widely agreed upon? I would offer industrial-scale meat production and consumption and maybe excess incarceration (especially along the lines of drug criminalization). 

Replies from: M. Y. Zuo
comment by M. Y. Zuo · 2021-11-12T21:40:04.587Z · LW(p) · GW(p)

I appreciate the support Sean. It’s not too difficult to write in lucid prose if it’s a subject near and dear to the heart and you allow a few hours of undivided attention, or at least that’s what I’ve found to be the case. 

The list of those effects not widely agreed could include all effects below the measurement capacities of our instruments, those limited to a certain subset of people, to a certain timeframe, or those that occur very briefly. I imagine the possible list is boundless in length.

comment by Slider · 2021-11-13T23:28:51.868Z · LW(p) · GW(p)

Decline in biodiversity

Or the opposite, allowing certain species to overpopulate

Why one species overpopulating is bad is because there is a decrease in biodiversity (more biomass in more monotonic makeup)

Was the first supposed to point to needless extinctions? Even there it might help to understand that if there is a balance of extinctions and speciation biodiversity can stay level.

I also thought that the "external" in "negative externalities" was that it was impacting parties to directly involved. So in that sense a "negative internality" would be if I hunt you down, I get to eat and fill my belly and you get to die and suffer pain. And when we make agrements they sometimes bind us in a bad way, it should be positive on the whole but there are individual parts that are not in the enthusitic interest of the party that it effects. With this "external to considerations" scope even "Unknown unknowns" would be externalities.

Replies from: M. Y. Zuo
comment by M. Y. Zuo · 2021-11-13T23:52:09.937Z · LW(p) · GW(p)

I go by the standard OED definition of biodiversity

biodiversity      /  ˌbʌɪə(ʊ)dʌɪˈvəːsɪti      /         ▸     noun        [  mass noun  ]       the variety of plant and animal life in the world or in a particular habitat, a high level of which is usually considered to be important and desirable .

It was supposed to point to a decline in the variety of plant and animal life in the world or in a particular habitat, particularly those which are usually considered to be important and desirable .