Christopher Marquis, a Professor at the Judge Business School in Cambridge and author of "Profiteers," delves into the hidden costs of corporate practices. He discusses how industries like agriculture and fast fashion externalize their negative impacts, often at the expense of society and the environment. Marquis introduces concepts like the externality iceberg and critiques the gap between consumer awareness and ethical choices, particularly in the chocolate industry. He also highlights the dangers of greenwashing and the environmental costs tied to modern technology.
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insights INSIGHT
Externality Iceberg
Externalities, like an iceberg, have a visible cost base (what companies pay for).
The unseen costs, like environmental and societal damage, are often obscured to maximize profits.
question_answer ANECDOTE
Green Circles Salon
Green Circles, a Toronto-based company, helps recycle salon waste like hair clippings and chemicals.
This reduces salon costs and environmental impact, turning a negative externality into a profitable, sustainable practice.
insights INSIGHT
Unpriced Externalities
Most externalities remain unpriced in consumer products.
Unpriced externalities represent a "corporate theft of public resources," according to Christopher Marquis.
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Christopher Marquis spent 10 years as a professor at the Harvard Business School, he’s also worked as a professor at Cornell, the Harvard Kennedy School and is currently a professor at the Judge Business School in Cambridge, where I was lucky enough to record this in person with him.
It was quite a neat experience actually, after we did the interview, Christopher treated me to a lunch in one of the Cambrdige college halls where in proper Friday British fashion, a perfect Fish and Chips was served.
Christopher has authored three books, but the subject of this interview was his latest… Profiteers, How Business Privatizes Profit and Socializes Cost.
Some of you may have noticed a recurring question around ‘negative externalities’ in several of my interviews this year… particularly with Johan Norberg most recently. Well, Adam Lantz, who listens to this podcast reached out to me in response to the JOhan interview and said. If you really wanty to talk externalities, than you’ve got to talk to this guy.
Johan Norberg Spotify - https://open.spotify.com/episode/4ujVUlq3BbhTDBhBFnaR5S?si=46b8333b866341da Johan Norberg Apple - https://podcasts.apple.com/us/podcast/johan-norberg-does-capitalism-fail-to-price-in-negative/id1540424160?i=1000671395087
And so I wrote to Christopher immediately, read his book, booked the flight and was greeted with so much generosity and hospitality it was a bit of a pinch myself moment, because even though this podcast creates 0 dollars in revenue, it’s instead introducing me to a wealth of experience.
This episode with Christopher is negative externalities all the way down… with specific attention to plastics, agriculture and clothing.
00:00 - Christopher Marquis 02:27 - The Externality Iceberg 07:57 - The Plastic Iceberg 14:47 - Can A Free Market Price These Negative Externalities? 26:04 - Agriculture Iceberg 41:07 - We Consume Via Our Means Not Our Morals 42:41 - Clothing Iceberg 52:33 - Egregious Cases Of Greenwashing 54:39 - Zoom & Netflix? Externality? 1:07:22 - The Jevons Paradox 1:08:43 - Just Speed Bumps On The Way To Prosperity? 1:12:35 - Hitchhikers Guide To The Galaxy, What Are The Right Questions? 1:16:57 - Serendipity In Christopher's Life
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