When Jack and Jill Make a Deal*: DANIEL M. HAUSMAN

In ordinary circumstances, human actions have a myriad of unintended and often unforeseen consequences for the lives of other people. Problems of pollution are serious examples, but spillovers and side effects are the rule, not the exception. Who knows what consequences this essay may have? This essay is concerned with the problems of justice created by spillovers. After characterizing such spillovers more precisely and relating the concept to the economist's notion of an externality, I shall then consider the moral conclusions concerning spillovers that issue from a natural rights perspective and from the perspective of welfare economics supplemented with theories of distributive justice. I shall argue that these perspectives go badly awry in taking spillovers to be the exception rather than the rule in human interactions. I. Externalities Economists have discussed spillovers under the heading of “externalities.” To say this is not very helpful, since there is so much disagreement concerning both the definition and significance of externalities.