ABSTRACT
Today, climate change is the ultimate tragedy since it leads toward social death and species extinction. The great eighteenth-century economist, Adam Smith, wrote that the invisible hand of the market would create a common good. He meant each person pursuing his own her own interest would create a common good. But it does precisely the opposite in today's age of climate change. Capitalism is based on maximizing corporate profit through endless growth. And on maximizing people's greed to consume. The key thing to recognize here, "the ghost added quickly", is that social and environmental externalities are inherent in capitalism. Economists Herman Daly and John Cobb wrote, "All conclusions in economic theory about the efficiency of pure competition and the free market are explicitly premised on the absence of externalities. The undeniable importance of externalities in today's world is therefore a serious challenge" to our whole capitalist system.
