Bees, Oranges, and Externalities: The Answer is Transaction Costs

Send us Fan MailBees and Valencia oranges from my family's farm in rural central Florida provide a snapshot of externalities and transaction costs. A local beekeeper wasn't just a boon for our crops but also an illustration of Arthur Pigou's theories on the divergence between supply price and marginal supply price.  Real-world practices, such as apple orchard owners paying for pollination services while beekeepers pay for the privilege of orange blossom honey, reveal how market dynamics naturally balance costs and benefits. M.C. Munger. "The Lighthouse Myth." https://www.aier.org/article/the-lighthouse-myth/M.C. Munger. "Orange Blossom Special." https://www.econlib.org/library/Columns/y2008/Mungerbees.htmlJ.E. Meade, 1952, "External Economies and Diseconomies in a Competitive Situation." https://www.jstor.org/stable/2227173Shawn Regan, "How Capitalism Saved the Bees", PERC. https://www.perc.org/2017/07/20/how-capitalism-saved-the-bees/SNS Cheung, "Fable of the Bees." https://www.pauldeng.com/pdf/stevencheung/fableofbees.pdfBruce Frohnen and Ted McAllister, Character in the American Experience: An Unruly People.  https://rowman.com/ISBN/9781666914528/Character-in-the-American-Experience-An-Unruly-PeopleIf you have questions or comments, or want to suggest a future topic, email the show at [email protected] !You can follow Mike Munger on Twitter at @mungowitz