Some accumulative harms are unavoidable, while others are unnecessary and avertible. For example, most people require more health care as they grow older. Consequently, we expect to see a general rise in the cost of medicine and health services in an aging population, ceteris paribus. This rise in the price of health care affects even the younger and healthier members of the community. This is an example of an unavoidable accumulative effect. We will examine this kind of market outcome in chapters 7 and 8 under “soft complicity.” In contrast, the spending binge of many US residents who live beyond their means through credit card debt or home-equity loans causes a much faster rise in global interest rates than should otherwise be the case. Businesses and first-time home buyers are thus forced to pay more for their loans. This is an example of a gratuitous harm. This chapter is about complicity in this latter kind of harm.

OBJECT OF ACCOUNTABILITY (COMPLICITY IN WHAT?)

Nature of externalities

To appreciate the last three types of complicity we examine in this study, it is important to understand the nature of externalities. Our economic decisions are never purely private because they have spillover effects on the rest of the community. There are two types that are relevant for our study: technical and pecuniary externalities. Common to both kinds of externalities are the following characteristics:

• they are the incidental by-products of our economic choices;

• they inflict losses on unsuspecting third parties, even as they endow others with windfall gains;

• […]