The Achilles heel of welfare economics is its treatment of externalities. . . .

후생경제학의 아킬레스건은 외부성에 대한 그것의 취급에 있다…

In a market economy any action of one individual or enterprise which induces pleasure or pain to any other individual or enterprise and is under or over priced by a market constitutes an externality.

시장경제에서 다른 개인이나 기업에 고통을 주거나 또는 기쁨을 감소시키며 시장에 의해 높거나 낮은 가격으로 책정되는 개인이나 기업의 어느 행동이나 외부성을 구성한다.

Since the vast majority of productive and consumptive acts are social, i.e., to some degree they involve more than one person, it follows that they will involve externalities. . . ..

생산과 소비 행위의 대부분은 사회적이기 때문에, 즉 어떤 정도에서 그들은 한 명 이상의 사람을 포함하기 때문에, 그것은 그들이 외부성을 포함시키리라는 것으로 이어진다…

If we assume the maximizing economic man of bourgeois economics, and if we assume the government establishes property rights and markets for these rights whenever an external diseconomy is discovered [the preferred "solution" of the conservative and increasingly dominant

trend within the field of public finance], then each man will soon discover that through contrivance he can impose external diseconomies on other men, knowing that the bargaining within the new market that will be established will surely make him better off. The more significant the social cost imposed upon his neighbor, the greater will be his reward in the bargaining process. It follows from the orthodox ssumption of maximizing man that each man will create a maximum of social costs

which he can impose on others. Ralph d' Arge and I have labeled this process "the invisible foot" of the laissez faire . .. market place. The "invisible foot" ensures us that in a free-market . . . economy each person pursuing only his own good will automatically, and most efficiently, do his part in maximizing the general public misery. ... To paraphrase a well-known precursor of this theory: Every individual necessarily labors to render the annual external costs of the society as great as he can. He generally, indeed, neither intends to promote the public misery nor knows how much he is promoting it. He intends only his own gain, and he is in this, as if many other cases, led by an invisible foot to promote an end which was no part of his intention. Nor is it any better for society that it was no part of it. By pursuing his own interest he frequently promotes social misery more effectually than when he really intends to promote it.