For Topic Report #2, select a current topic (i.e., a topic being considered in the media in the last three months) that exhibits an externality or externalities, and decribe how these externalities could repreesent a conflict between private interests and public interests.Describing Externalities Externalities exist when there are social implications from private transactions Defining 'political' positions Costs or benefits the market does not taken into account when it allocates resources Solution - 'internalize' the externality then let the market function (The question is 'How?")Meow Ideal: consumers making free, rational choices Criticize the Mixed approach as treating people as 'ignorant consumers\" versus ' informed bureaucrats\" (i.e., government health and safetv regulators) Regulation increase government costs increase business costs (admin. and compliance) increase prices; reduce competitiveness Regulation for Neoclassicals: Worth it? Cure worse than the disease? Seat belts? Speeding? Cells and Driving? Driver's Licenses? Prescription drugs? Helmets in hockev? 'v'accines? Liberal Liberal perspective: Rejects equal power of consumers and producers Producers distort markets e.g., marketing distort costs and benefits Diseconomies (externalities) become a social costtherefore a rolefor government representing consumerfpublic interests Distortions of consumer behaviour have social costs therefore a role for government representing consumer/\"public interests Radical Capitalism is dominated and controlled by capitalists For Radicals, in the extreme, Capitalist profits are often consumer/social losses e.g., cigarettes because of externalities If Capitalists predetermine most of the choices available to consumersthere is a capitalist bias that can be detrimental to society Capitalists manipulate consumer behaviour toward choices that best meet their profit motive For Radicals, Capitalists get away with manipulation because of their dominant position of power Radical cont'd Where externalities exist: : Problem: Capitalism : Solution: Not found within Capitalism Capitalism is wasteful a lot of resources devoted to frivolous consumer items and marketing therefore Capitalism is inherentlw,r poor at allocating existing resources because of the 'consumerist,' 'immediate gratification' that benefits capitalists most