I'm not the GP, but if I had to guess: the negative externalities are reflected in all of the small, traditional retail businesses that have shrunk or failed outright as Amazon has grown to capture their markets. All the people who either owned or worked for those small businesses are now out of work and have to find some other way to earn a living. If they are not able to do so, then society suffers as a result.

Similar situations have happened in the past, such as when big grocery store chains drove mom-and-pop general stores out of business. It's the price we pay for efficiency.

Efficiency is a relative term. Let's say a company is good at what it does, but then becomes a monopoly that can dictate unfavorable terms and capture the surplus, was it an efficiency gain on the whole? Let's say companies do very well, but deplete natural resources and lobby against infrastructure projects, did society gain as a result? These questions are naturally difficult to answer but there's at least more to the story than just the inductive reasoning of creative destruction fixing everything. Less efficient actors getting booted out is only a small part of the process as usually the consequences are on the second order range.

Are you calling a predictable result of vanilla capitalism, that is, some companies succeeding while others fail, a “negative externality”?

Yes. "An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer." [0]

Dominating a market so thoroughly that your competitors go out of business and must find another line of work creates a cost for society that is not borne by the winner unless they pay for it through taxation. Namely those costs include retraining, possibly monetary assistance, etc, etc.

Beyond that, companies like Amazon[1] and Walmart[2] have well-established histories of paying their workers so little that they have to use SNAP to make ends meet.

[0] https://www.investopedia.com/terms/e/externality.asp [1] https://www.businessinsider.com/amazon-employees-on-food-sta... [2] https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...

> Dominating a market so thoroughly that your competitors go out of business and must find another line of work creates a cost for society that is not borne by the winner unless they pay for it through taxation. Namely those costs include retraining, possibly monetary assistance, etc, etc.

I’m not an economist and I can’t give a formal account of externalities.

But, your reasoning, I think, leads to absurdity. For example, if I start a company to sell generic, mass produced pencils for $1000 a piece then no one will buy from my company and it will be forced out of the market and my principal will be lost. Then in your words, my company failed because of “externalities” from my competitors who are selling pencils at the market rate and who then owe me money.

> Beyond that, companies like Amazon[1] and Walmart[2] have well-established histories of paying their workers so little that they have to use SNAP to make ends meet.

So eliminate SNAP?

Maybe vanilla capitalism isn't the way to go then.

Your arguing for an economic system where no producers will fail?

I am not, no.

Ok, so what policy are you intimating?