THIS CHAPTER considers a second form of market failure that globalization is charged with exacerbating: externalities—specifically, environmental externalities. The cartoon deftly captures the antiglobalization screed that globalization is causing an ecological catastrophe, and adds the twist that that benefits business. The underlying idea is that market transactions fail to price in harms ranging from air and water pollution to depletion of natural resource stocks to global warming. And as a result of this externalization of ecological harms, we see too much of them.
Environmentalists have ...