The Negative Externalities of Immorality: The Case of Same-Sex Marriage

Abstract

A number of concepts from economic theory have been used to defend legal paternalism and legal moralism. In this paper I discuss the concept of moral externalities, i.e., of negative externalities of a behavior that is considered immoral by conventional morality. According to some economists the existence of significant negative externalities can justify legal moralism. I attempt to rebut this argument using a Coasean framework (supported by a body of unfortunately little known work on the demarcation of externalities) and by extracting from Richard Posner's wealth maximization criterion a theory of self-ownership which places heavier emphasis on consent than utility as a proxy for social welfare. I apply the results discussing the issue of same-sex marriage. I do not attempt to justify it on legal or moral grounds; I aim rather to repudiate the arguments which reject same-sex marriage based on the concept of moral externalities.