It's not really obtuse, but I'll give you a pass on that.
For someone familiar with the term "externalities," you are surprisingly hasty. Risk associated with uncertainty regarding property rights is an enormous negative externally. In the limit, when property rights are not enforces at all, you arrive at the Hobbesian nightmare.
So, if you want to take into account externalities, then take into account all known ones. As soon as you include that which stems from the owner's uncertainty about his rights to the property in his possession, it will outweigh any other positive ones you may come across.
Make Tories proud --- be consistent.
Good analysis of yours to Torie @ # 19:
"For someone familiar with the term "externalities," you are surprisingly hasty. Risk associated with uncertainty regarding property rights is an enormous negative externally. In the limit, when property rights are not enforces at all, you arrive at the Hobbesian nightmare.
"So, if you want to take into account externalities, then take into account all known ones. As soon as you include that which stems from the owner's uncertainty about his rights to the property in his possession, it will outweigh any other positive ones you may come across."
"Make Tories proud --- be consistent."
My comment: Well put!
Risk is a cost. But risk associated with trying to incorporate economic externalities into the price system is an economically efficient risk cost. Of course, what was happening here was going off at the handle without really knowing the facts of the case. It was one of those ideological knee jerk thingies. I will react negatively to that each and every time it happens, unless my knee happens to be jerking. And so it goes.
Well said.