ABSTRACT
Other examples within urban areas include the traffic congestion suffered by all drivers along roads and highways, the noise or pollution suffered by people in the vicinity from the operation of industry or of its products, and the consequent effects on people’s health and longevity. Even the offence to citizens given by the erection of some tasteless or incongruous building or other structure may properly be regarded as a spillover – as, indeed, would the reverse of this, the pleasure in a beautiful building enjoyed by citizens being properly regarded as a positive spillover. From a little reflection on examples such as these, it emerges that one charac-
teristic common to all of them is the incidental or unintentional nature of the effect produced. The person or industrial concern engaged, say, in logging may or may not have any idea of the consequences on the profits or welfare of others. But it is certain that they do not enter into his calculations. The factory owners, whose plant produces smoke as well as other things, are concerned only to produce the other things that can be sold on the market. They have no interest in producing the smoke, even though they may be fully aware of it. But so long as their own productivity does not suffer thereby, and they themselves are not penalized in any way, they will regard the smoke as an unfortunate by-product. If these external effects are not deliberately produced, however, neither are they
willingly absorbed by others. Such effects may add to the enjoyment of life, as does the smell of fresh-cut grass, or else add to life’s vexations as does the noise, stench and danger of increasing car traffic. But they are notwithin the control of the persons who are absorbing them – at least not without their incurring expenses.2
