My argument is we've replaced a rich set of social controls with a single unitary one; money. And then wonder why we're constantly dealing with mal-externalities.
If you consider that human societies are complex and industrial ones even more so, the idea that you can manage that with a single control input (money) is ludicrous.
Now please, don't take this as an endorsement that we should let externalities go unchecked, or even that governance should shirk basic understanding of processes/industries and expect to replace that entirely with money. Nor do I have love for perverse money-generating yet counterproductive endeavors. I'm just saying the basic trend that you've characterized as "ludicrous" is actually entirely appropriate.
All the significant milestones in health and safety have been from hard won regulation and money - not just taxation, but penalties and fines. Usually accompanied by enormous effort and spending from industry to lie, cheat and avoid said regulation being enacted, or having to comply with it once enacted.
Business has become ever more multi-national, taxation is gamed across nations, trade deals have placed commerce above government, and regulation is becoming ever less fashionable. Industry now feels ever more able to simply move things out of sight, overseas to developing nations sub contracted to members of their supply chain. All health, safety and environmental issues can be dealt with via a simple press release expressing disappointment, but they are, after all an "independent" supplier.
I'd say the last two centuries have proved that trend entirely inappropriate for everything except corporate profit.
Money upset the mobile phone business which was a lazy cartel controlled by carriers, who functioned as monopsony customers of phone manufacturers. Europe's market was more dynamic than the the US and Japan due to regulation but still the phones weren't amazing. Then about a decade ago Apple blew up not just the design of phones but more importantly IMHO the relationships between the end users, manufacturers, and the carriers.
I cite this as a proof that it can happen but in general I think regulation to manage externalities is underused due to ideology. Yet as a businessperson I don't consider regulation inherently evil -- in fact, for example, a safety reg which applies to everyone doesn't disadvantage any one company.
An existence proof that it "pure" capitalism can cause positive disruptive change, even if that's a rare case. And I write "pure" in scare quotes because Apple did benefit from a raft of laws and regulations (police, building codes, court system, patents, etc) -- but not to a greater or lesser degree than the other participants in the phone ecosystem.
For example: stores that require people to wait in line to get a limited-availability thing on a first-come-first-served basis. Rich people just pay someone to wait in line for them. Entrepreneurs serve these rich people by putting a bunch of people in the line and then auctioning off the resulting purchases to make a profit. Now you’ve got scalpers, a loss of profits to middlemen that could have gone to the original seller (and thus subsidized production), and people wasting time in lines for no reason (because nobody is now getting the thing that wasn’t previously.)
We internalize externalities using monetary penalties, because higher profits are what drive businesses to favor these strategies in the first place. If you cancel out the profit (with a tax or fine), you remove the motive, rather than simply redirecting it.
The human world outside "money" is far larger and the bonds also far stronger than inside of it, I would claim. It's just that one is mostly subconscious and the other one very often requires conscious attention, so guess which one you always notice.
Alas, money is always an overriding concern. Your adherence to local cultural regulations may or may not buy you good karma, but that karma is not redeemable beyond your current social group. You won't pay for supplies out of it, and you won't build your house with it. But you can do that with money, regardless of where you are. So money tends to displace everything else out of sheer utility. Of course it can't substitute for every social interaction, but then you also don't want to run scarcity economy on karma.
So what???
> but my next-door neighbours will follow different rules.
Some rules are different, many are not.
> Alas, money is always an overriding concern.
No it isn't, see what I wrote.
Your entire comment is an amazing display of cluelessness about the forces acting on you. Cultural norms are a FAR bigger factor. Yes you don't realize it, see what I wrote.
You are also quite confused about what is being discussed. What is that about building houses and buying stuff? If the topic is too difficult for you, just don't comment, posting incoherent random thoughts is useless. Yes, we indeed use money in the economy, great insight.
Corporate boards are elected by their shareholders specifically to optimize for profitability above and beyond any other criteria. (Which is hard work! That’s why “corporate board-member” is a paid gig—it requires hard mental self-trickery to get into that mindset, plus a lot of cognitive dissonance to stay in that mindset, and those both take a lot out of you, emotionally.)
A good example of this: recycling. Social norms have caused people within corporations to favour recycling, and so, for example, office managers will implement recycling and waste-reduction programs, where employees must sort their waste into bins, etc.
But this is entirely uncoupled from whether the corporation itself will implement recycling on an industrial scale. Most of the corporations that have recycling bins in their hallways, don’t have any recycling or waste-reduction programs going for their products or services, or for the manufacturing and logistics pipelines serving them. If norms were enough to influence corporations to do so, they’d have long done so; society has been pushing corporations to care about the environment, in every way we can think of, since the 1970s.
But look at it from the corporation’s perspective: a few bins for the office, and a contract with a recycling company to empty them, just makes the “offices” line-item cost a tiny bit more. It’s an eensy-weensy operational expense. But doing something like Apple does, where they design their phones to not include non-recyclable materials, and accept them back for trade-in specifically to recycle the components? That’s something that requires large capital expenditures to implement, and so that’s something you have to convince your shareholders is worth doing.
And, if you’re a public company, your shareholders probably aren’t humans themselves, but rather other corporations like mutual-fund management houses. And those companies are operating under the principle that their goal is to make their fund participants high returns—not to invest in ways that those fund participants would prefer, or even find ethical.
The social more is never going to take effect, because (public) corporations have boards of people who are paid to only think about money, and shareholders who are also mostly corporations with boards paid to think solely of the profitability of their investments. Never do human preferences or human norms enter into the board’s equation for “what should the corporation do, from a top-down perspective.” Public corporations are about as able to be influenced by human norms as an alien or an AI. (They can be influenced if their workers form a union and then that union strikes to express its disagreement with the corporation over some social norm. But that’s less about the corporation “understanding” or “appreciating” the norm, and more about how an organism under threat will do things it doesn’t want to do to appease a predator.)
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Tangent: The only reason Apple “gets away with” having an industrial recycling program, is that they’ve made it into a feature of their product, part of its marketing, in a way that appeals to their particular user-base (i.e. upper-middle-class people who usually have some guilt over how their purchasing affects the environment.) They used this “increased appeal to our customer-base -> increased sales” argument to convince those corporate share-holders to okay the program.
That situation, though, is pretty unique. Most companies in the world aren’t selling expensive, “trendy” items, with the kind of customer-base that “we implemented a recycling program for our product” or “we reduced our factories’ emissions” would appeal to. And even the ones that are, aren’t necessarily selling the majority of units into cultures with norms like our own; Chinese manufacturers, for example, might be able to establish a recycling program for goods sold abroad, but they likely won’t get much uptake for a recycling program for goods sold domestically in China. If that’s where their board and their shareholders reside, then that recycling program (and associated CapEx) is just not gonna happen.
Reputation/social karma as a currency is hyper-localized and isn't able to cover all your needs; without modern technology, it doesn't even scale beyond Dunbar number-sized villages. Barter is O(n!) with respect to amount of things you might need, so it doesn't scale well with progress of technology. The abstraction of money was the (in retrospect) obvious solution.
This sort of a market correction only receives criticism on an inter-industry level (and possibly with regards to imports if the cost is only applied domestically) because everyone in that industry is motivated to care about the well being of their workers without suffering an economic disadvantage for doing so (in fact, not caring is often a penalty beyond the cost to adhere to the regulation to make adherence an economically sound decision).