Should-Read: Economics Needs Externalities and Equity or It Makes No Sense at All:

@jodiecongirl I know of literally zero legitimate economists who think that externalities are irrelevant.

de1ong: But surely you know of many influential calling-themselves economists who think externalities are rarely important? & are in any case almost always dwarfed in the magnitude of their effects by the government failure losses that would be generated by any attempt to correct them? Cf.:

@janzilinski: K. Murphy, price theory phd class, a few years ago: "Externalities are the last refuge of scoundrels"

@jodiecongirl: what exactly did he mean by this...

@de1ong: the last excuse you give before you admit your real motive is a communistic hatred of freedom...

@jodiecongirl: this is why I chose my words carefully :)

@de1ong: & I had hoped you would tell me that John Cochrane is no longer an influential calling-himself economist... :-(

@jodiecongirl: he's on the list of people I want to shake and yell "I know you know market failures exist!"

@t0nyyates: I like reading his stuff, but it sends a chill down the spine.

@RyanWHerzog: Yet at EconED yesterday a panel of economists emphasized the need to spend more time on S&D, they cut externalities out of principles.

@de1ong: link?

@jodiecongirl: so this is the conference, though I'm not there so I don't have materials...

@RyanWHerzog: Yeah... it was Tabborok, Jose, and Rubb.

@jodiecongirl: :(

@TwterlessKalina: Only one of them said they cut externalities out of principles. The context was how do we get our students to remember ANYTHING.

@RyanWHerzog: Under the general heading, how has teaching changed. The consensus was to place more emphasis on S&D. No one talked about equality.

@jodiecongirl: I think that's partially because there's no concrete definition of "equity," i.e. fairness, so economists don't have a lot concrete to say.

@de1ong: yes we do: Benthamite greatest good of the greatest number: max SWF as a sum of individual utilities w/ declining marginal utility of wealth...