Externalities
The unintended side effects of an activity that affect people who weren't involved in the decision. Externalities can be positive (a neighbor's garden) or negative (factory pollution).
Published May 20, 2020
Origin
Alfred Marshall first articulated the idea of "external economies" in his Principles of Economics (1890), observing that firms could be affected by spillovers from others' activities. His student Arthur Cecil Pigou formalized the theory in The Economics of Welfare (1920), introducing corrective "Pigovian taxes" to align private costs with social costs.
Everyday Use
There are hidden costs to everything that we do — from perpetuating bad habits to going out of our way to express gratitude. Not only is it hard to register the weight of these activities in the moment, it's nearly impossible to understand all the downstream effects that are beyond our radar.