@mungowitz Negative externalities are in the eye of the beholder, are they not?Twitter forces us all to be Straussians. Here, Reihan (euvoluntarily) encourages us to be petit linguists. What does the word "externality" mean?
— Reihan Salam (@reihan) July 15, 2014
A broad definition would include anything from a petty, expected nuisance like when my neighborhood maintenance service interrupts my early afternoon nap with their leaf blowers all the way to extremely serious offenses like an upstream tannery dumping waste chemicals straight into the river that empties into my favorite fishing hole. Under this definition, the "collateral damage" of war is an externality, and so is the jackass down the road who doesn't know how to turn his car stereo down on his way to work at 6am.
A narrower definition might snip off both of those tails. Hosting a 4th of July party, even when it bothers a curmudgeonly neighbor, is within the tacit bundle of property rights that typically attends conventional home ownership, so maybe that's not an economically relevant externality. And using the same term to describe kids murdered in drone raids is virulently offensive political euphemism—kayfabe run amok.
But even after you trim the distribution, I think you'll still find some reasonable disagreement over what properly counts as an externality. You see this in apartment complexes with explicit rules about noise. Loud music is okay, so long as it gets turned down after 10pm. You see it in the common law with what counts as criminal negligence or those actions that sort of straddle criminal and tort law.
So yes, negative externalities are in the eye of the beholder, but I urge you to refrain from taking full license with that. Eudaimonia includes the proper understanding of the many tacit rules of the game, and that includes neither being a jerk nor suffering one gladly. Subjectivity is not the same as chaos, it still respects convention, honor, and decency. Subjectivity can be consistent with virtuous thought and behavior.