Introduction Economists have tried for a long time to shape the mode of thinking about damages that arise from economic activity. As ‘social costs’ or ‘externalities’ these damages were assigned a specific place in modern society. According to historians of economic thought: ‘It is now well established that the boundaries of the modern analysis of externalities were defined by A.C. Pigou’s Economics of Welfare ([1920] 1932) and Ronald H. Coase’s “Problem of Social Cost” (1960)’ (Aslanbeigui and Medema 1998: 1). This intellectual history is quite symptomatic for contemporary economic discourse, in that only neoclassical and neoliberal theories are considered while K. William Kapp’s fundamental critique of both of these theories is omitted. His work once received recognition even by his staunch neoliberal critic, Wilfred Beckerman:

The economics profession in general, and those who are interested in environmental problems in particular, owe a great debt to Professor Kapp. It was he who first drew our attention to the widespread nature of external costs imposed by many productive activities and the way in which these impaired the environment, in his book on The social costs of business enterprise. This work was not duly appreciated at the time it was published because this was before concern with the environment became fashionable.