But this all only the tip of the iceberg of Facebook’s “negative externalities” — economic parlance for hidden costs. (I don’t like that phrase, because “externalities” imply that there is some kind of “real” or “main” benefit that the uncounted cost is “external” to — but what about in Facebook’s case, when an institution appears to be mainly have only “externalities”? Then orthodox economics fails. But I digress a little.)
(Why) Facebook Shows Us How Badly Broken the Economy Is
umair haque
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The word “externalities” does not imply anything about the product (good or service) in question — external implies only that the costs in question are paid by someone other than the producer of the product. Other than financial fraud, costs are hidden only to the extent they aren’t internalized by the producer of the offending product, which is to say that in such cases negative externalities are exported from producers to society at large. In other words, what makes a cost hidden is a political phenomena — where cost is borne diffusely while resulting production revenue is concentrated in the hands of the cost-exporting producer of the offending product — not an economic one, whether the paricular product is as intrinsically valuable as breathable air and clean water or as worthless as a lump of coal or even an economics degree.