Arthur C. Pigou

Arthur C. Pigou was a British economist known for his work on how government policies can address market failures, especially externalities—costs or benefits not reflected in prices, like pollution. He advocated for targeted taxes and subsidies to balance private actions with social welfare. Pigou’s ideas, called Pigovian taxes, suggest that taxing harmful activities (e.g., carbon emissions) can help correct market outcomes and promote overall societal well-being. His work has influenced environmental economics and policy-making, emphasizing the role of government intervention to achieve more efficient and fair economic results when markets alone fall short.