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Putting buggy whip manufacturers out of business just altered the market instead of directly harming anyone. It helped the people who would have bought them as much as it hurt them, so the net externalities are zero.

If you make the neighborhood ugly and drive down property values for that reason, you are creating a negative externality that you should pay for. If you're just giving them competition, that's different.






The negative externality is the buggy whip manufacturers all lost their jobs which they probably weren't too happy about.
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