Common wealth, as we’ve seen, is immensely valuable. Common illth — the shadow side of private wealth — is likewise vast. But while mainstream economists acknowledge the existence of common wealth and illth, they don’t bother to measure them or include them in their models. They assume the commons side of the ledger is trivial, or ignore it because dollar signs are hard to attach. This is tantamount to professional malpractice. ... They count America's sales (a.k.a. GDP), but not our expenses (the negative externalities of those sales). They keep track of private income and wealth, but not common wealth or illth. As a result, they miss at least half the story.I agree with the thrust of this post, though (as I posted in a comment), I think most economists don't necessarily assume the negatives arising from economic development are zero, but rather that they are less than or equal to the positive externalities. The point being that there are positive externalities of wealth generation beyond those that appear in company accounts and GDP. These could be the positives, important to society, of employing people, such as a reduced crime rate, and a reduced poverty rate - which itself has important positive spin-offs for the commons. My point, in other words is that just as almost all the negative externalities of economic development are ignored, so too are some of the positives.
Social Policy Bonds are one way of dealing with the negative externalities of our way of life. Because they do not prejudge how a particular negative externality shall be eliminated, they would reward the most efficient way of solving the problems they cause. If we take climate change as an example, reducing anthropogenic greenhouse gas emissions a la Kyoto, may be necessary but, on the other hand, there may be far more cost-effective solutions that deserve investigation. Efficiency, not ideology, would be the sole criterion.