> There are many places where we know that a free market doesn’t properly function. Specifically, there are certain types of goods that end up priced wrong: those with externalities (positive or negative). So if all a company cares about is maximizing shareholder value over time they are drawn away from products with positive externalities (like a public park) towards those with negative externalities (like cars that pollute)
Sure, but that simply suggests that those externalities should be priced. Problem solved.
The devil is in the details. Often it is very hard to price the negative or positive externalities. And sometimes companies are far and away in the best position to make an estimate of this.
For example, if you believe that Facebook played a large role in electing trump and that trump is bad how would you even begin to price such a thing. If those things were both true how could we ever find out.
Purely shareholder value is an overly narrow way of looking at the world or making decisions.
That would imply that there is no climate change happening, as we would have priced in that externality and resolved the issue by now. Right?
As it turns out, that isn't right, because nobody who has incentive to price the externality right is allowed to be part of the process, and the ones who are part of the process are incentivized to cheat and not price externalities at all, or to price them poorly.
So we have runaway climate change. And we have structures preventing that from improving because the incentive structures are flipped to the opposite right now. There is no indication that will change, in fact the incentives to pollute and remove the externality of pollution from the cost of goods sold and services provided, so that we are actually accelerating this path towards higher pollution (see Trump's coal-and-oil-championing attitude).
> That would imply that there is no climate change happening, as we would have priced in that externality and resolved the issue by now. Right?
Erm, what? I didn't say that the system would price it...if it would...we wouldn't need to price it. I said that we needed to price it. You seem to be arguing against some sort of made up straw man here.
Sure, but that simply suggests that those externalities should be priced. Problem solved.