The textbook notion of externalities is expansive.  Potentially totalitarian, in fact.  Suppose, for example, that you dislike seeing Bahais.  The very fact that you have these bigoted feelings instantly implies that Bahais “impose a negative externality” on you purely by appearing in your field of view.

Indeed, an anti-Bahai zealot could dislike the very existence of Bahais.  If so, this implies that Bahais “impose a negative externality” merely by being in the world.  If you think this is an a...