[uBeR]

Your hypocrisy on ad hominems is duly noted, but your fallacious arguments will be ignored so that we can focus at the issue at hand, i.e. externalities and the inefficiency of free markets. Everybody, everybody who's going to be honest anyway, recognizes that free markets are inefficient. I was educated at a freshwater school, and even the hardcore right-libertarian professors there acknowledged market inefficiency. They were honest. The reasons are manifold. The existence of externalities is but one of them. Even Dahlman admits that externalities exist, but says there are merely the result of transactions costs, which is true enough. Merely renaming externalities, however, says nothing about market efficiency. Dahlman calls it normative, but we already know things like pollution and global warming happen, so we can judge that on its face value. Mark failure abounds around us, and we can each point to personal examples from our own experiences. Again, for those not familiar, that's the mainstream neoclassical consensus among economists, something Coase himself would readily admit. Coase, remember, does not deny the existence of externalities (or whatever euphemism you wish to use), but says they are the result of poorly defined (or lack of) property rights and other transaction costs (zero transactions costs is an absurdity--making his theorem rather inapplicable and irrelevant--which even Coase admits, if you've read him). There are ton of other sources that create market failure--if we were to leave markets to their own devices, that is--which leads us to the simple if inconvenient conclusion that free markets are inefficient. Again, this is widely recognized by honest economists.