I argue that much current thinking on externalities—at least among “lay political economists” (but even, on occasion, among professional economists)—is saddled with two analytical errors. The first is what I call coextensivism: the conflation of public goods and externalities. The second error is what I call externality profligacy: the conflation of economic and “social” externalities. The principal dangers presented by these two “dogmas on externalities” are that, while in their grips, we are under-disposed to seek negotiated, market-based solutions (of a (...) broadly Coasean nature) to challenges posed by economic externalities, and over-disposed to seek coercive, state-based solutions (of a broadly Pigouvian nature) to challenges posed by social externalities. (shrink)

When is state coercion for the provision of public goods justified? And how should the social surplus of public goods be distributed? Philosophers approach these questions by distinguishing between essential and discretionary public goods. This article explains the intractability of this distinction, and presents two upshots. First, if governments provide configurations of public goods that simultaneously serve essential and discretionary purposes, the scope for justifiable complaints by honest holdouts is narrower than commonly assumed. Second, however, claims to distributive fairness in (...) the provision of public goods also turn out to be more complex to assess. (shrink)