Aiming to establish a theoretical basis for further empirical and public policy analysis in the area of externalities, this work develops its own theory of welfare economics, interprets externalities in the light of the theory and discusses policy remedies and directions for further research.

Along with the renewed interest in the Austrian school of economics over the last two decades, important advances have been made in applying its principles to concrete issues that typically face market economics. However, very little has been done in the area of externalities and the concept of social efficiency. The main purpose of this book is to establish a theoretical basis for further empirical and public policy analysis in the area of externalities. The author offers an alternative to the conventional neoclassical welfare paradigm - his construct does not include perfect competition or general equilibrium. After the author develops his theory of welfare economics, he interprets externalities in the light of the theory and discusses policy remedies and directions for further research.

Introduction: neoclassical externalities theory
the Austrian critique
outline and organizational framework. Part 1 The genealogy of the Austrian position: Mises and Rothbard on externalities
Hayek on external benefits and "collective goods"
externalities analysis and the early Austrians. Part 2 Externalites and modern Austrian theories of economic welfare - problems and promises: Rothbard's criteria of demonstrated preference
Kirzner - efficiency as plan co-ordination. Part 3 Catallactic efficiency - welfare economics in an open ended world: catallaxy and economy
catallactic efficiency
ideal institutional setting vs ideal market outcomes
the meaning and causes of inefficiency
conclusion - catallactic efficiency, Kirzner's co-ordination standard and entrepreneurship. Part 4 Catallactic efficiency and externalities: externalities and social efficiency
Kirzner's IIS - the thread that binds. Part 5 Application, the economics of tort liability: coase and modern law and economics
subjective value, information and time - the Austrian critique
catallactic efficiency and considerations for further analysis. Conclusion: unresolved issues
final remarks.