Guns and Externalities

In economics, an externality is defined as the effect of a decision by one set of parties on other parties who did not have a choice and whose interests were not taken into account.

The classic example of a negative externality is the widget manufacturer who pollutes a local waterway rather than properly disposing of his toxic byproducts. This saves the manufacturer money, advantaging him in the marketplace because he doesn’t have to factor the cost of disposal into the price of his widgets. Local taxpayers pay to clean up the waterway, effectively subsidizing his profits.

The discussion on this blog yesterday triggered (I know, bad pun) a consideration of the externalities created by our current permissive gun laws.

The Shorenstein Center at Harvard has an interesting and relevant analysis. It begins with the raw numbers:

More than 30,000 people a year in the United States die from gunshot wounds, whether intentional or accidental. What we don’t hear as much about are the tens of thousands more who are hurt by bullets but survive. In 2013, five people suffered non-fatal firearm injuries for every two who died, according to the national Centers for Disease Control and Prevention (CDC). From 2003 to 2013, 799,760 people sustained non-fatal injuries — nearly 23 percent of which were accidental. This 10-year total includes 82,325 children age 17 and younger.

A recent, 18 state study focused on individuals who had been treated for a firearm injury in 2010 and discharged alive. The research team assessed the strictness of gun legislation in those states using scorecards created by the Brady Campaign to Prevent Gun Violence.

Among the research findings:

There were, on average, 19 non-fatal firearm injuries per 100,000 people in 2010. Of the states included in the study, Hawaii had the fewest injuries — 3.3 non-fatal gun injuries per 100,000 people. South Carolina had the most with 36.6 per 100,000 people…..

States with strict laws regulating background checks and gun purchases had lower rates of non-fatal injury. Child Access Prevention (CAP) laws also were associated with lower rates of non-fatal injury. When researchers analyzed legislation and the records of patients who were 19 years old and younger, they found that states with strict child-access laws had fewer children and teenagers with self-inflicted and accidental firearm injuries compared to states with “non-strict” laws.

Here’s the kicker–or, in economic terms, the externality.

Recent estimates have suggested that the societal cost of nonfatal firearm injuries in 2010 approached $20 billion …

And guess who pays most of that $20 billion?

Most of this economic burden falls on taxpayers via costs directed toward Medicare, Medicaid, and the uninsured.

Yesterday, in the comments, Red George suggested requiring gun owners to carry liability insurance. A great idea, but I’m sure the NRA would argue that making gun owners assume responsibility for the damage they cause would violate the Second Amendment.

And we know who writes the laws….


  1. Still, it is not the number of dead and injured. It is the “who.” The supporters of gun rights only want to see that it is an “illegal” or a “thug” doing the shooting or being the one shot. Otherwise, when the shooter is white he is excused because he is mentally ill. If the victim is white the victim was in the wrong place at the wrong time, unless the shooter was black or brown. Then the man hunt is on to bring about justice at all costs and teach a lesson. Those 30,000 dead a year? Who cares? “Let them kill each other.”

  2. How about dividing that 20 Billion to a per/100 bullets figure and taxing the sale of bullets to recoup the money and funnel it through Medicare? Is there a bullet right in the constitution that prohibits taxing bullets? Sounds too easy. I must be missing something.
    Oh.. This is like raising the cap on Social Security contributions. Too simple.

  3. Testing, licensure (including background checks), vehicle registration and proof of insurance have not eliminated autos. While there are those who drive without a license or insurance, we are nevertheless safer from injury and liability due to the laws requiring them.

    While these laws might enable the government to thwart a revolution by coming after everyone with an auto, there are no organizations contending any such slippery slope.

  4. Extremely shoddy Economics, Sheila. Cavanaugh Hall weeps.

    Any high school student taking AP Economics can tell you that a discussion of externalities requires examination of both positive and negative, not merely one side of the ledger.

    Sunshine has a prodigious list of negative externalities. Do you wish it would go away?

  5. Several years ago while we lived on the West Coast, I was nearly one of those who would have become a statistic in the aforementioned research. I was sitting in my car waiting for the light to change when I glanced to my right to see a 9mm automatic pointed at my head from the window of a young couple about to get their jollies from a drive-by shooting. I took my foot off the brake, fortunately having room ahead of me to pull up “out of harm’s way” as they waved their arms and honked at me as if to say, “Wait a minute, we have a little gift for you!” These were not kids who should have had access to a gun, as they were barely old enough to drive a car.

    I consider myself to be most fortunate to have “dodged the bullet” on this one, but many are not so fortunate. The NRA yields entirely too much power in Congress, and I for one am sick of their shoddy excuses, and having to pay out of my pocket for their control over this country.

  6. Gopper, what would those positive externalities created by our current permissive gun laws be?

  7. Have you all noticed that the Goober er Gopper never answers a valid question that is asked of narrow minded statements?

  8. Like Nancy, I’ve yet to understand those who do not approve of a background check before purchasing a firearm. At present, a person buying a firearm at one of the large sporting goods outlets such as Gander Mountain does have a required background check completed at the check-out counter in the firearm’s department. The customer completes a form with basic personal information which is then fed into a separate computer designated for background checks. The entire process takes between 15 to 30 minutes before results are received. If one does not pass the background check, the firearm purchase is voided, on the spot. Of course, the firearm registration number is linked to the buyer’s name by the retailer.

    If a person thinks he/she might occasionally have the firearm in his/her car while traveling from home to a shooting range, it’s recommended by the retailer to complete the IN paperwork for a legal gun permit, as provided by the store. This involves taking the completed application to your county sheriff’s office where they will schedule an appointment for an FBI fingerprint and deep background check. Dependent upon a clear FBI deep background check, the firearm owner again drives to the sheriff’s office to pick-up the IN firearm license.

    Unlike some states including KY, Indiana does not require a basic firearms class before issuing the permit. Actually a basic firearms class is a revenue enhancer for Kentucky, why not Indiana?

  9. I’m convinced that we’ve assigned the NRA most of their power. We’ve turned them into “The Great and Powerful OZ.” We empower them with tales of how much they spend on campaigns and lobbyists, but with $1.00 each from just 2% of the U.S. population we could out spend them. And with $1.00 each from just 10% of the population we could out spend all of the associated outside contributions. Also, by not having a ranking system of our own, we’ve given their ranking system a ridiculous amount of influence. Progressives aren’t joiners – we need to be. We need to start a national association of our own and go toe to toe with the NRA.

  10. Yesterday researching some of Gropper’s droppings I ran into an extreme Libertarian website and read as much as I could stand. It was enlightening and I recommend others do it. Unfortunately I didn’t bookmark it so I can’t post that particular one today.

    As I normally avoid such ranting it stood in stark contrast with my reality so what stood out were the number of claims stated about liberals, Democrats, Obama and his entire administration and history, and all non white, non male, non Christian, persons in the country.

    For those claims there was not a shred of evidence given. Not a shred. They were stated as if intuitively obvious.

    What scared me about that is the implication of what has preceded it in order to mold minds into a state where all reality has been replaced by burning hatred of everybody and thing different.

    The connection between that implanted hatred and Gropper’s love of killing machines became completely understandable.

    Sometimes the banter here takes on familiar family and friends kind of back and forth. Not entertaining so much as to be expected role playing.

    What my experience yesterday reminded me of though that the state of this country and these times is deadly serious. The damage is done. Minds have been molded into extreme positions and truth is no longer relevant.

    We’ll never know if the oligarchs who funded modern entertainment based brainwashing are surprised by the extent of their success or expected it and are pleased. If they care they realize that they’ve created a destructive force beyond their, or anyone’s, control. It has assumed a life of its own.

    God help us.

  11. Pete, I hear you. As much as humanly possible I stay away, far away, from those discussions on the fringe element forums, whether left or right, where participants are guaranteed nothing but losing a few more brain cells.

  12. BTW obviously Gopper missed Sheila’s entire point on externalities. In corporate accounting there is no point in discussing something so labeled. It is treated as irrelevant so what would be the point of discussing its good or bad points.

    It’s like what each of us was born with and into. It just is.

  13. “In economics, an externality is defined as the effect of a decision by one set of parties on other parties who did not have a choice and whose interests were not taken into account.”

    The above may describe an externality in economics but in the legal world it describes a Loophole. I deliberately capitalized it to show it’s importance relating to guns and gun deaths and/or survivors of gunshots. The convoluted defense using 2nd Amendment rights allowing any and everyone to purchase a lethal weapon who has cash, valid credit card and basic identification, without in-depth criminal background checks, is a legal Loophole…an often fatal Loophole. It protects the seller and the buyer, manufacturers are never brought into the equation except in novels. Can or can’t tax bullets because they are not referred to in the 2nd Amendment be damned. This government can and does tax anything it wants to and disallows taxation on other items with the strongest and wealthiest lobbyists…think NRA.

    So; the NRA now shares Pence’s office in the State House as they train the Indiana National Guard on the proper use of concealed weapons. This is another of Pence’s brainchildren heading into another election year. To quote Pence in the Indianapolis Star article, “Arming the Guard”, today; “Mike Pence directed the state’s military bases and training centers to beef up security in response to recent attacks in Tennessee.” I’m sure this sounds good to the GOP, the NRA and gun lovers in Indiana.

    Let’s begin looking closely at this situation beginning in Tennessee where the terrible shooting on two military sites resulted in four dead Marines. That is a tragedy that might have been prevented, as well as the thirteen dead at Fort Hood, Texas, and twelve dead in the Washington, D.C., Navy Yard, but for a questionable law. President George H.W. Bush signed Department of Defense Directive 5210.56 in February 1992, which declared military bases “gun free zones”. A military/legal externality/Loophole of major proportions, and a fatal one. The young man (U.S. Navy if I remember correctly) who shot and killed the gunman was originally charged for illegally having his weapon on a military base. I believe the charges were dropped.

    Obviously Defense Department Directive 5210.56 has been forgotten, overlooked, deliberately disobeyed or ignored for the lack of common sense it represents. Or Pence has deeply held religious beliefs giving him the power of having God on his side regarding our National Guard training. When it comes to our city streets, roads, businesses and homes, there are no “gun free zones” because that would violate the civil rights of gun owners as protected under the 2nd Amendment. Call it what you like, externality or Loophole, it is a deadly situation across this nation and victims do not have a choice and our interests are not taken into account.

  14. Pete, I can believe that externalities are not discussed in corporate accounting, but surely they are discussed in the privacy of the board room and most likely not the part of the minutes.

  15. Mandated liability insurance sounds good to me, at least on surface; however, any type insurance ultimately will involve actuaries employed by insurance companies who will employ all their mathematical and statistical methods and measurements to pinpoint the externalities, the levels of risk and uncertainty broken down into groups. My potential firearm owner liability insurance annual premium would be low; on the other hand, those in high-risk groups could not afford the premiums and would go uninsured, yet keep their firearms.

  16. Pete, your observations about the libertarian site applies to the usual stuff that we find in many of the policies passed by our legislature in the area of education, weapons possession and other topics. And there are the guys in the Republican Clown Car, too. When you have ideology and crowds of cheering folks who think it sounds right, just why do you think you need data? Data are only inconvenient bumps on the road to glory through ideology.

    Of course, the rest of that story applies to the troll-like comments from people like Groper. If you happen to say something that doesn’t sound right to them, the first response is rarely sensible data. It’s emotional: aggression and sneering insults. It’s the great non sequitur that falls outside the argument. It’s the win at all costs, including the cost of rationality. That’s the kind of stuff that brings down a democracy.

  17. C’mon, folks, whenever in the presence of an annoying, perhaps an intentionally annoying person or simply a very noisy individual much like a tantrum-throwing toddler, remember to ignore the person, don’t provide the person an audience via any personal acknowledgement. And, remember this prime rule of behavior modification when dealing with difficult people, for some individuals negative attention is better than no attention.

  18. Theresa, I believe that you are right.

    The corporation that I spent most of my career with, Kodak, for most of my time, believed first that they existed in things bigger; a community, a society, a country, a world. Good accounting practice was considered secondary to that. A more or less simplistic score keeping system that let you know how your business decisions based on customers, technology and employees, we’re doing in the little picture. They never even regarded the impact of business decisions as external or internal.

    Of course we went through the MBA revolution and the demise of chemical photography at the same time so untangling their impacts is impossible but I think that it’s safe to say both contributed to the company’s demise.

    It was the end of an era as well as a company.

    That’s why I consider conservatism a failure in government, business and religion. It just has never produced good results and that has led to lee Atwater, Karl Rove, Grover Norquist, Roger Ailes, Rupert Murdoch, Koch Bros, Sheldon Adelson, Rush Limbaugh entertainment based brain washing that will surely be our demise unless democracy can beat them. Conservatism has always failed to deliver good results. There’s no reason to expect that to change.

  19. BSH, I understand what you’re saying and went through the era where Tea Party ranting was met with polite silence on our part. That simply didn’t work. Tea Party mania grew.

    After awhile it became apparent that not admitting that they had changed politics for the long run, maybe forever, was dysfunctional. We had to adopt those tactics distasteful though they may be.

    Extremism is what works against extremism.

    Very sad but reality.

  20. Those negative externalities are today referred to as “unintentional consequences.” The media has a field day with that term because then they do not have to dig into what was really known before those consequences occurred. Heaven forbid that they should ever question the decisions of corporate America.

  21. BSH; regarding that Gander Mountain 20-30 minute background check to purchase a gun – it cannot possibly be a full background criminal history check in that short span of time. Local and state criminal histories and NCIC needs to be done along with fingerprinting to seek full information. I have had to perform these criminal background checks on my job and underwent my own when I purchased my handgun. Yes; it was in 1988 when I purchased my handgun but the background check was thorough; what is done today is superficial, even with the advent of computers. I had applied for re-employment with the City of Indianapolis and had to go through that full procedure, 2 days later returned to IPD to go through the same investigation to purchase my handgun. Decided to apply for my permit to carry and had to undergo the THIRD criminal history background check during one week; many laughs from my police officer friends. Did I mind any of the three full investigations in a matter of days; certainly not, they were required by law and were to my benefit. I had to wait a full seven working-days after for results to pick up my gun and my permit to carry. I’m sure today, with the vast number of people buying weapons before President Obama’s minions can confiscate them, it would take longer to get results. This procedure may only save a few lives but…what if it were your life or your child’s or anyone you love? Worthwhile to protect them? By the way; I got the job:)

  22. Pete, I’m thinking one antidote for extremism, whether from the left or the right, is maintaining a full and balanced life of thought, occasionally called a life of moderation or as Benjamin Disraeli once said, “Moderation is the center wherein all philosophies, both human and divine, meet.” I’m extremely uncomfortable with extremist groups or groups who espouse urgency.

  23. BSH. I believe that perhaps our best choice if it’s possible is to think moderately but speak emphatically when engaging extremists. All of the logic and facts in the world will not get through.

    Another strategy that many researchers claim does get through are narratives and real life stories rather than abstractions. Abstractions may be the basis for philosophy but seem ineffective on those with closed minds.

  24. Pete, I don’t intentionally seek out engagements with extremists of any sort; however, when I find myself in their company, I listen and listen until they’ve vented themselves dry on whatever pet peeve they’re touting at the time. If they don’t ask me a direct question, I simply listen and make a few “hmm” sounds, and if they do ask me a direct question slanted toward an agreement with their beliefs, I’m always prepared with a logical thought response that neither agrees with them nor disagrees with their rant. One of those “think about this” responses coming from a logical and moderate thought process that in no way confirms my agreement with their pet peeves but neither invalidates their thoughts as mere gibberish. Like the old starfish parable, we may not be able to save all the starfish washed ashore, but we can save one, one at a time. Extremism does not occur overnight, and it won’t be eliminated overnight.

  25. “Of course, the firearm registration number is linked to the buyer’s name by the retailer. ”

    Wrong. What’s funny is that you’re so certain about this, yet so wrong.

    There is no “firearm registration number” generated in a 4473 sale.

    Where do you people get such silly ideas?

    “Unlike some states including KY, Indiana does not require a basic firearms class before issuing the permit. Actually a basic firearms class is a revenue enhancer for Kentucky, why not Indiana?”

    And you’re wrong, again. I’m just scanning these silly comments and picking out the worst offenders. You scored consecutively. Think about that. Of course, the way some of these people ramble, I can’t be expected to do more than cast a quick look at the first sentence to see if it’s going anywhere, so much is ignored.

    In Kentucky, you can strap on a AR-15 and walk around downtown Louisville without any sort of permit. In Kentucky, you can openly carry a big .44 revolver in a holster and walk around downtown Louisville without any sort of permit. Kentucky only requires a permit for concealed carry of a handgun.

    Indiana, however, requires a permit for all forms of carrying a handgun, so it would unduly burden either open or concealed carry to require a class to carry a handgun. One form of carry, take your pick, must remain constitutionally available, sans license.

    In Indiana you can, of course, strap on a AR-15 and walk around downtown Bloomington without any sort of permit.

    If you people want to have a place where you can live your dream of banning guns, create your own country in Maine and Massachusetts. We’ll let you have the land if you promise to go away, never come back and forever shut up.

  26. I see BSH distributed more unbelievably erroneous statements about Indiana gun law. People should be careful about following anything the obviously lesser-informed posters say.

    “If a person thinks he/she might occasionally have the firearm in his/her car while traveling from home to a shooting range, it’s recommended by the retailer to complete the IN paperwork for a legal gun permit, as provided by the store. ”

    Wrong! Indiana does not have a “gun permit.” Indiana has a License to Carry a Handgun. Rifles, shotguns, and all longarms can be freely transported and carried throughout Indiana without any sort of license.

    Further, concerning handguns, Indiana law exempts travel to and from a range or training facility from the definition of “carry,” so no permit is required to toss your unloaded handgun in your trunk and head to the range.

    Yet further, a gun store has nothing to do with applying for a License to Carry a Handgun.

    “This involves taking the completed application to your county sheriff’s office where they will schedule an appointment for an FBI fingerprint and deep background check.”

    Largely Wrong. Almost all of the process is now completed on-line and at privately owned fingerprint centers.

    “Dependent upon a clear FBI deep background check, the firearm owner again drives to the sheriff’s office to pick-up the IN firearm license. ”

    WOW, IS THIS SO WRONG! Please, nobody rely on any of BSH’s really bad information. If you pass the background check, the State mails you your license.

  27. I think that Gopper is arguing that Indiana’s gun laws are looser than BSH imagined.

    Another factor in the state race to the bottom.

  28. Oh my word, please know I have no issue with apologizing for my loosely using ‘license’ and ‘permit’ as interchangeable terms nor do I have any issue with anyone’s correcting my loosely used interchangeable terms of ‘registration’ and ‘serial number’.

    As an aside, several years ago my female cosmetic surgeon shared with me following breast augmentation surgery that my surgical implants had separate serial numbers, were registered in a national data bank of implants protected by HIPAA; on the other hand, she shared with me that my surgical breast implants could be considered, in the wrong hands, weapons of mass destruction.

  29. BSH; when you purchase a gun, all you get is the gun…unless you also purchase ammunition, cleaning supplies, holster etc., of course. I added that last bit in case Gomer – Gooper decides to point out other purchases are available where you buy guns simply hoping to forestall another rant. If you want to carry your gun at all times, call it a “license” or “permit” or your “pink slip”. I don’t believe interchanging those words matters to anyone but Gomer, er, Gopper.

    Interchanging terms “registration” and “serial number” is also unimportant to everyone but you-know-who. Police use that “registration”/”serial number” to track the purchase if possible from the manufacturer and/or dealer when they confiscate weapons from criminals. He/she must argue petty points to cover up his/her lack of knowledge of facts regarding vital issues; call this a “distraction” or “red herring” or, as I prefer, call it “projection”. He/she attempts to project his/her lack of knowledge onto others.

    You can call me JoAnn, Jo, Green, or just “hey you”; “a rose by any other name…” etc., etc., etc.

  30. “You can call me JoAnn, Jo, Green, or just “hey you””

    How’s “hey you, JoAnn”?

    I’ve got my lifetime permit the ‘pink slip’ laminated by my local UPS Store and tucked away in my wallet directly behind my IN Driver’s License. As the kids say, “It’s all good.”

    And, by the way, I learned a couple of days ago quite by accident that if an Indiana resident has a valid IN driver’s license and a valid ‘pink slip’, aka permit/license to carry a firearm in Indiana, that the permit/license to carry is automatically registered in the State and aligned with the person’s Indiana Driver’s License which makes perfectly good sense. So, if a person is pulled over for a traffic stop, please know in advance that the law enforcement officer is aware that you possess an IN license/permit for a firearm whether the firearm is in your vehicle or at your home.

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