One of the most common objections to capitalism is that it leads to unchecked negative externalities. An externality is an effect of economic activity that is not accounted for in the costs of the goods or services involved in the transaction.

Many externalities are positive: For instance, when a park is created near some houses, it adds to the value of the surrounding property, even if the neighboring homeowners did not have to pay for its existence. Others are negative, such as when an airport being constructed near houses reduces the value of those properties.

Usually, people citing negative externalities as an objection to capitalism have in mind the air or water pollution that capitalism seems to produce, since limiting such waste is often not profitable. The solution to these problems, says the opponent of capitalism, is the intervention of the state via subsidies, public services or regulations. Such intervention will fix the “inefficiency” of the free market.

In a completely free capitalist society — in which the state is committed to nothing but protecting the lives, liberty and property of its people — how can this problem be solved?

The answer might surprise you. It is a proper definition of individual rights, especially property rights.

It may be the case that we cannot always say precisely where one’s property ends. With some kinds of physical property, such as land, the issue is straightforward. With other kinds, such as the air above one’s property or the water that flows through one’s property, the issue is much more complex. Intellectual property is arguably even more complicated.

However, this just demonstrates the need for objective criteria that determine when harm has been done on a level that justifies compensation. Obviously, there are clear cases when I am “harmed” that do not justify compensation — I cannot justly require compensation for the fact that seeing a certain skyscraper next to my house annoys me.

On the other hand, it could never be the case that someone could get away with directly covering my property with toxic fumes. All of the cases in between can be solved by proper definitions of property in air or ocean, for example, and a system of courts that allows citizens to express their grievances and engage in litigation. The ever evolving principles of common law are an excellent tool here.

Economic regulations or taxes unfairly punish every capitalist engaging in certain kinds of economic activity by restricting their freedom whether or not they have created objectively defined sources of harm to others. Taxes on carbon emissions that can be found in several European countries are one such example.

It might be thought, though, that the restriction of freedom on some businessmen is worthwhile in the context of furthering the welfare of society as a whole.

But we should not think in these terms — individuals do not exist merely to meet the needs of the public at large (indeed, there is no “public good” independent of the values of each individual).

The activities of people in trade and production will presumably often create many positive effects and negative effects that are unaccounted for: The issue only becomes a legitimate state concern when people are objectively being coerced or a person or her property is directly physically harmed. If a given economic transaction or productive activity does not harm others in this way, then individuals are perfectly justified in engaging in that action to seek their own profit or happiness.

Not only are externalities not a problem for capitalism, but capitalism is the best system for dealing with such externalities, since it is the system where all property is privately owned and therefore has the most objective method of addressing the side-effects of economic activity on individuals.

TRISTAN DE LIEGE won’t require compensation for the positive externality of this free column. He can be reached at tflenaerts@ucdavis.edu.

LET’S. GO. AGS. On Thursday, the UC Davis Pavilion shook with the intensity of Aggies who were attempting to prove much more than just how far our men’s basketball team has come in the last year. Sometimes, UC Davis isn’t given enough credit. Occasionally, Aggie Pride is underestimated. But on Thursday night, Aggie Basketball put these notions of not-good-enough-to-be-on-ESPN to shame. Not only was the night a history-making event for UC Davis Athletics, but it also gave our fantastic school the chance to really prove itself in front of a national stage.

While we all know that UC Davis has everything (and more) to offer that the big-name schools have, sometimes this fact goes unnoticed. Nevertheless, when faced with the opportunity to go big against Long Beach State, the Aggies did what we do best. We showed up, we showed pride and we showed the nation just how great Davis truly is.

And the night that the Aggies almost beat the 49ers represented so much more than just a one-point game. The fact that UC Davis, a relatively under-appreciated D1 school could not only put up an incredible fight against the number-one team in the Big West, but do it with such an incredible fan section behind it, demonstrated a few really important facts about our school.

First, the game proved that UC Davis is on the brink. After facing the growing pains of advancing to D1 athletics a few years ago, Thursday night showed that Davis has finally arrived. It’s our time now. We all know what our school and our students have to offer. Aggies are talented, committed, passionate and brilliant. And we proved this to Thursday’s national audience by bringing it on and off the court.

Second, Aggie Pack is a force to be reckoned with. Everybody knows about Duke’s Cameron Crazies, Indiana’s Hoosiers and the Orange Men of Syracuse. And, because of the epic battle on March 7, everyone finally knows about the Aggies of UC Davis, too. Standing in the audience at the Long Beach game was an Aggie-Pride-inducing, YOLO (county)-increasing, and completely school spirit-infused experience. It was the first chance the Ags were given to prove how great our fan section is on a national level. And, boy, did we prove it. All I can say to the Crazies, Hoosiers and Orange Men is watch out. Aggie Pack be comin’ for ya.

Finally, the showdown in the Pavilion showcased that UC Davis is the total package. Sure, we have lots of cows and even more bikes. And, yeah, we might be a bit in the middle of nowhere. But we’re also the No. 8 public school in the nation and the No. 1 coolest school. And, on top off all that, Ags know how to have a good time. It is no question that Davis truly has it all. We all know that we love being Ags, and Thursday night earned this fact some much-deserved national recognition.

All I can say is that, against the 49ers, the Pavilion was filled as it has never been before, students were supporting Aggie athletics like no other time in history and our school was finally showcased on a national level. Never have I been as committed to UC Davis or have I felt more proud to be an Ag. You know you felt it, too.

So, fellow Aggies, here’s my challenge to you. Keep it up. Be the Ags you showed the nation on Thursday. We know we’ve got something special here in Davis, and if we keep acting like we did on that historic night, soon the rest of the nation will realize how great Davis is, too.

Mary Young
Third–year history major

There has been much discussion about how UC administrators are petitioning to keep UC SHIP exempt from the standards of the Affordable Care Act and how UC Office of the President mismanaged UC SHIP to the tune of nearly $60 million. What I haven’t seen or heard discussed is how these factors may spell the demise of UC SHIP when the Affordable Care Act (“Obamacare”) kicks in next January.

Since UC SHIP is a self-funded student plan, it is not mandated by ACA to meet certain standards. UCOP’s response to this has been to get UC SHIP classified as “minimum essential coverage.” The problem with UCOP doing this is that it keeps UC SHIP in this gray-zone where the elimination of caps is still not mandatory. Currently, students face a yearly prescription drug cap and a lifetime coverage cap under UC SHIP. The reality is that this cap is far from sufficient for dealing with a long-term or costly medical condition such as cancer. UCOP thinks it has done us a favor when in fact it has just further cemented UC students’ lack of health security.

Next there is the deficit. UC SHIP is expected to be just under $60 million in debt by this summer. When UC SHIP was formed by consolidating the existing campus health insurance plans all oversight became centralized under UCOP and campus health services were no longer able to oversee the plan. Hired consultants did some poor math, and UCOP didn’t keep their own tabs on the plan or get any second opinions, and let the plan go into debt year after year, until we got to the situation we are in now. UCOP’s solution is to charge students for their mismanagement, nearly doubling our fees over the next few years.

Most important is what all this will mean if UCOP does pass the buck on to us and doesn’t remove the caps. Next January, students will face the option of buying a cheaper insurance plan on the state exchanges which doesn’t have any yearly or lifetime caps, or sticking with the more expensive UC SHIP plan which will not be there for them if they face a catastrophic illness. Which would you choose: the cheaper plan which offers more health security or the more expensive plan with less coverage? The obvious choice for many students will be to go to the exchanges and drop UC SHIP. If students do this in large enough numbers than the buying power of our plan will be significantly reduced. At this point we basically have a downward spiral, where more students leaving the plan causes more students to leave, until UC SHIP is just no longer a competitive plan at all.

I am not the only one who thinks this way. I sit on the UC SHIP student advisory committee here at Davis and one of the directors of Student Health and Counseling Services said in our Feb. 13 meeting that this is a very realistic scenario and that she thinks that after a few years of the state exchanges being established that the UC will no longer offer health insurance to students.

Either we can demand that UCOP pay for its mistakes and that the caps are dropped, or we can sit by and watch as UC SHIP wastes away its last few years, at the expense of those students who do not immediately leave the plan.

Duane Wright
Ph.D student in Sociology
Unit Chair of the UC Student Worker Union UAW 2865 at UC Davis
Member of the UC SHIP student advisory committee
dewright@ucdavis.edu

The excitement was tangible Thursday night as students formed a line from the Pavilion to the cows, waiting for the basketball game that was to be broadcast on ESPN2.

Sadly, our team came out one point short in a heart-wrenching 77-76 battle. But Aggie Pride definitely won the game.

The game was sold out, with 5,670 fans packing the stands — an impressive turnout for a UC Davis basketball game. Not only was the game an exciting show of the talent of our basketball players, it was one of the best displays of Aggie Pride we’ve seen in a while.

Aggie Pack got the crowd pumped up while Band-uh! played. There was a Harlem Shake moment and Gunrock got down.

The men’s basketball team played hard and proved that UC Davis is a legitimate force in the Big West Conference.

It was heartening to see students supporting students who work hard, every day and all day. We hope that this display of school spirit is not a one-time thing and Aggie fans make it out to more basketball games in the future.

As this quarter sets upon the horizon, many of my fellow columnists will be cranking out goodbye columns, trying to get their final say in edgewise about their opinions on drugs, sex, politics or what have you.

I, unfortunately, do not have this option, as I already wrote my goodbye column last quarter, foolishly thinking that it was going to be my last as a columnist. A lot of you are probably thinking that last quarter should have been my last as a columnist. I can’t say that I disagree.

But that’s neither here nor there, and I’ve managed to stumble, blunder and grope my way through another quarter’s worth of columns, only to find myself at the precipice once again. This time, the curtain will definitely fall, as I will be graduating next week.

So I’ve been racking my mind about what I should write about in the sparse amount of print that I have left in my possession. Since I’m graduating soon, and I figure that most reading this will also one day be bound for what lies beyond the academic world, I may as well focus this column on the future.

One big issue that many of us will be facing in the post-college years will be student loan debt. In a recent article by The New York Times, a study was conducted by the New York Federal Reserve bank that found that student debt had nearly tripled since 2004 and is approaching the $1 trillion mark.

That’s pretty disheartening news to hear, especially since our economy is finally beginning to pull itself out of the recession. How will this generation of 20-somethings be able to shoulder such a tremendous debt burden? How will we afford to buy homes, start businesses and save for the future?

It’s definitely a scary thing for me, especially since I don’t really have any tangible prospects upon graduation. I’m searching for jobs and I’m considering getting my master’s. The grad school route would just lead to more debt, but I won’t be as competitive to employers without obtaining a higher degree. You need to go above and beyond to demonstrate your worth.

In economics, this is called signaling. It’s a method in which one party tries to give information to another party to try to alter the outcome of a situation. It’s like going to a fight with a loaded gun and showing it to your opponent to try to scare them off.

In the case of getting a master’s degree, you’re showing the employer that you have a certain skill set that comes with the addition of extra money and time spent at a university. You may know that you’re a hard-working, clever, resourceful person, but your employer will not know that upon your initial interview. Sure, listing those traits on your resume may help, but it won’t nail the point home, seeing as how anyone can just lie and write down positive, glowing attributes about themselves.

I’m not saying that getting a master’s is necessary for everyone, but it’s certainly an appealing option, especially for those that are unsure of what exactly they want to do out of undergrad and would feel more comfortable in an academic environment. I mean, after all, learning is pretty much all we’ve been doing for the last 20 or so years of our lives. On the other hand, that’s all the same reason to want to stop the academic pursuit as well.

Graduating is a little bit of a scary thing. For now, I don’t know what’s on the horizon for me. All’s I know is that I’ll be flying home and will have to get my wisdom teeth pulled out and attend jury duty. Then, I’ll probably start working and studying for the CPA test. My only hope for all of you out there is that your post-graduation plans are more exciting than mine.

Alright, that’s a wrap. This will be the last time I’ll be published in print until I decide to write my autobiography after becoming an accomplished astronaut cowboy accountant.

It was most definitely a pleasure and I thank you all for even taking a glance at any one of my columns.

ANDREW POH is pretty glad to be graduating, but in the unlikely case that you’ll miss him, he can still be reached at apoh@ucdavis.edu.

The West Village housing community has been receiving lots of hype recently. Well, all the hype is recent since the community is only 2 years old. It’s young, shiny, colorful and not only is it net zero energy, it is even net positive. That’s right, the combined solar production from the acres of solar panels actually exceeds the amount of electricity used by the complex.

While this is all well and good, a village can not be a village if it is just residences. Obviously, the architects thought of this and incorporated spaces that were to be filled with convenience stores, coffee shops and the like. If you happened to attend the Sacramento City College extension and live in West Village, these stores would ensure that you would never have to leave the comfort of your resort-style housing. But alas, for the past two years, residents have been forced to seek their convenience store nourishment by actually leaving the complex!

Until about three weeks ago, all this store space was vacant and filled to the brim with cardboard boxes. At long last, the first sign has been hung for the HUB, a coffee shop and eatery that will be the first of (hopefully) many shops to grace the storefronts of our housing paradise.

Now, it’s great that a store has finally opened, but shouldn’t it have taken a little less than two years for this to happen? Couldn’t West Village have focused their energy on these stores instead of buying 10 iPads for the leasing office? Maybe … But those iPads are just so darn pretty!

We want a store where we can buy sunscreen before lounging at our two pools. We want a store that sells 600-thread count Egyptian cotton towels to wrap ourselves in after hot tubbing.

But seriously, it would have been great to have a coffee shop nearby last year when construction was waking us up every day at 8 a.m. This coffee place should also stay open 24 hours a day, so that residents are not relegated to buying overpriced energy drinks from the vending machine in the 24-hour, well-stocked gym.

We look forward to seeing what other amenities the famed West Village will soon be offering. Maybe when our grandchildren live there, they will have added in a store to buy test supplies.