this post was submitted on 16 May 2026
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This is an incredibly complex topic and depends somewhat on your exact setup of revolution and regime.
Let me give another example of negative externalities to at least vaguely illustrate: corruption. It's the exact same mechanism. The person receiving a bribe benefits from the bribe, but the cost (harm) is usually paid by their employer or society.
For a news agency, a negative externality may be to intentionally spread incorrect information and propaganda. So as an exercise, try to think of the incentives of a news organization in capitalism when it is privately owned and anyone with money can start a competing news agency and in communism, where some kind of political organ (elected or named by elected officials) decides the news agencies funding and if resources are allocated to create a competitor.
Economic and political systems are about incentives. The more the incentives of individual people are aligned with the incentives of society as a whole, the better the system.