“Social cost” in economics usually refers to the sum of private costs (wikipedia), such that a transfer from one person to another would have no social cost.
“Internalizing an externality” usually means making the private costs better reflect the social costs (so it’s not relevant what is done with the tax revenue).
Sure, and there are good reasons for that technical terminology.
But it’s weird to claim that any transfer between people, especially one that’s coerced, has “no social cost”. That’s perhaps an unreasonable objection, particularly in this context.
Is there another term then for something generally ‘beyond’ ‘internalizing an externality’? It just doesn’t seem likely to be effective to simply impose private costs equal in magnitude to other ‘social’ costs and then claim victory. Maybe I’m just conflating the economic concept with a kind of accounting-like generalization of the ‘match expenses to revenue’ principle.
In practice, it seems counter-productive to ignore how specific tax revenues are allocated. It certainly seems most natural to me to allocate those revenues to offset the relevant ‘social costs’ that inspired the taxes originally.
“Social cost” in economics usually refers to the sum of private costs (wikipedia), such that a transfer from one person to another would have no social cost.
“Internalizing an externality” usually means making the private costs better reflect the social costs (so it’s not relevant what is done with the tax revenue).
Sure, and there are good reasons for that technical terminology.
But it’s weird to claim that any transfer between people, especially one that’s coerced, has “no social cost”. That’s perhaps an unreasonable objection, particularly in this context.
Is there another term then for something generally ‘beyond’ ‘internalizing an externality’? It just doesn’t seem likely to be effective to simply impose private costs equal in magnitude to other ‘social’ costs and then claim victory. Maybe I’m just conflating the economic concept with a kind of accounting-like generalization of the ‘match expenses to revenue’ principle.
In practice, it seems counter-productive to ignore how specific tax revenues are allocated. It certainly seems most natural to me to allocate those revenues to offset the relevant ‘social costs’ that inspired the taxes originally.