Superheroes and Externalities

Those of you familiar with Ecocomics from our previous website should know all about the concept of superheroes and externalities.  We’ve discussed the topic ad nauseum, pointing out several examples along the way.  However,  in light of beginning this blog for Subculture for the Cultured, and considering the fact that this is a major issue that we will revisit again (I’m sure), it might pay to briefly review the concept of externalities and why it is such an important idea, particularly in modern comic books.

In economics, an externality is an external cost or benefit imposed to or incurred by a third-party outside of a particular transaction.  Critically, the party or parties facing the externality are completely uninvolved in the circumstances leading to its creation.  Some examples of negative externalities (costs) include smoking (that is, smokers impose costs on society in the form of second-hand smoke and added health expenditures for treatment of lung cancer, emphysema, etc.) and pollution (cars and firms burn fossil fuels, which is an obvious social cost). An example of a positive externality is education (an individual who invests more in his or her human capital could in the future create societal benefits).

Ultimate Avengers #6 by Mark Millar and Carlos Pacheco, Marvel Comics (2010)

So, how do externalities apply to worlds in which supervillains are constantly struggling to achieve world domination and superheroes are flying around trying to stop them with lasers and such?  Well, this could occur in many ways.  The obvious negative externality is in the form of broken cars, buildings, streets, sidewalks, and oh yeah, the damage inflicted upon other innocent human beings as the result of battle between superheroes and supervillains.  It is important to note that the damage that villains inflict as part of their chaotic schemes are not technically externalities.  After all, this is exactly what they intend to do.  The transaction is between the supervillain and the innocent.  However, I am more referring to situations in which superheroes are fighting supervillains and throwing each other through buildings in the process.  This is a clear unintended consequence.  The transaction involves the superhero and the supervillain.  Anything else is a third party.

Consider, for example, the scenario depicted above from Ultimate Avengers.  In it, Ultimate Captain America is in the midst of a high-speed chase through Prague.  Actually, he’s using his ship to teleport around the world in search of the evil Red Skull.  He’s not, however, the greatest pilot and is accidentally smashing into buildings, leaving a mess of destruction all over Europe.  Oops.

These are things that we typically overlook in comic books or in superhero movies, but they likely hold very real implications within the context of the Marvel universe. For example, who exactly is going to pay for this destruction? Suppose the glass from those broken windows harms one of the employees of that office building. Who is going to pay for his or her health care?  Suppose a chunk of building falls to the ground and smashes someone’s car?  Is that insured?

In the United States specifically, a world where heroes and villains ron amok is likely to have the following implications:

1) The construction industry likely makes up something like–and I’m no mathematician–90% of the economy.  After all, New York City gets completely destroyed by the likes of the Green Goblin or Doctor Doom approximately once a month.  And it miraculously gets rebuilt time and time again.

2) There are likely extremely high taxes imposed on the citizens of “danger areas” like New York City.  It is unclear whether the construction jobs are handled publicly or privately, but my guess is that there is considerable public involvement in the Marvel Universe.

3) Health care costs must also be exorbitant.  Last I checked, the United States spends approximately 17% of its GDP on health care.  In the Marvel Universe, this number is probably much higher.  Of course, it is pretty much agreed upon by health economists that the rise in health expenditures is primarily attributable to the rise in health technology.  I imagine this is too the case in Marvel and DC (consider the questionable technologies developed by Stark Industries and Wayne enterprises).  However, the superhero externaliy argument also probably plays a significant role.

4) Innocent deaths and injuries.  This one is self explanatory.  But it is also worth mentioning that many of these innocents include family members or loved ones of superheroes (i.e. Gwen Stacey).

In economic theory, negative externalities takes us away from producing at efficient outcomes.  In other words, we don’t like them.  Some ways to alleviate the inefficiency manufactured by externalities are to charge a tax or to somehow penalize/criminalize those involved in creating the externality.  Unfortunately, this is difficult to do when all the people involved wear masks?  So, how can we get at solutions to this problem in the Marvel and DC universes?

As it turns out, some of these have been addressed in the comics themselves.  One famous example is the Superhero Registration Act, the crux of Marvel’s Civil War event in 2006.  The SRA was a bill that was passed requiring that those with superhuman abilities (including those with access to sophisticated technologies, i.e. Iron Man) be required to register with the United States federal government, thereby revealing their secret identities and declaring themselves to the public.  This was a measure introduced in order to hold superheroes accountable for the damage they cause, such as in the example with Captain America above.  The idea, of course, being that superheroes would now be more careful about blasting their lasers every which way.  Unfortunately, this might also hinder their abilities to perform their jobs, i.e. prevent the destruction of the world.  It might also result in more danger to family members, thereby exacerbating another externality.

There are many other options of reducing these externalities that we have previously discussed, including supernatural disaster insurance and the Thunderbolts (i.e. allowing supervillains to work for the government).  Alas, these would likely not bring us back to the fully efficient allocation.  I guess the folks in the Marvel Universe have to weigh how much they hate paying for rampant destruction against how cool it is to see dudes with capes flying around over their heads.