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Barkley. I made two points. 
 
1. Because of income effects it is impossible in most cases to exactly 
compensate for externalities. Since you did not comment on this I assume 
you agree. 
 
2. Externalities are rarely zero. This is a more contentious claim and 
would require a longer defence. It is a claim that consumption is social 
in nature, not individual. It does not rest upon a general or abstract 
view that "everything is connected" but on concrete connections that can 
be shown to exist. It the case of eating, it is commonplace that diet 
affects health, attitude, mood, etc. These will affect human 
interactions, and thus the utility of others. 
 
Rod Hay 
 
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