My annotated study of Pigou’s observations re: externalities

The HUGE ERROR OF ECONOMIC ANALYSIS of positive externalities (there are plenty of them in negative externalities as well, cf. Demsetz) started with a **REALLY STUPID BOOK** BY PIGOU, in which he cites meaningless examples to prove the “problem of social benefit”. Pigou says that the State can “fix” things with a “bounty” – subsidy. […]