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Barkley wrote: 
 
> Well, it seems that we have two questions.  One is the use of the term 
> "external economies" in the positive sense and that of "externality"  
> which allows for the negative sense that is so central to discussions in 
> environmental economics.  We have now seen, thanks to Ross Emmett, that  
> the former dates back at least to Marshall. 
 
I'm not sure the two "senses" of externality can be separated so easily. 
Until shown otherwise, I'm happy to concur with Dan Bromley that Francis 
Bator was the first to use the term "externality" in a published article 
(allowing that Paul Samuelson may have used the term first in his address 
to the AEA) in place of the earlier use of "external economies." However, 
the "negative sense" that Barkley speaks of was also present in the 
earlier literature --  under the concept of "negative" external 
economies or "diseconomies." 
 
For example, in his classic article "Cost curves and supply curves," Jacob  
Viner (Zeitschrift fuer Nationaloekonomie, 1932) expands upon Marshall's  
treatment of external and internal economies. He develops the notion of  
"net external diseconomies" of production, and uses the following example: 
 
"One possible instance might be higher unit highway transportation costs  
when an industry which provides its own transportation for materials and  
products expands its output and thereby brings about traffic congestion on  
the roads." (p. 41). 
 
Close enough? 
 
Ross B. Emmett 
Manager, Electronic Information, History of Economics Society  
e-mail: [log in to unmask] 
 
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