Walter "Wally" Thurman

Yeah, Mead is the right one.

He and Francis Bader later on, they said, imagine that there's a beekeeper and the beekeeper's bees fly out every day and they do two things.

They bring back pollen from a nearby apple orchard

And they bring back nectar.

And in the process of moving nectar around, they pollinate the apples, meaning they increase the productivity of the apple orchard.

But then they also bring back this valuable dilute sweetness from the nectar, which they produce honey from.

So they're doing two economically useful things.

One is produce apples, and that benefits the apple grower.

And the other is producing honey, which benefits the beekeeper.

The interesting thing to Mead and others was that, at least according to them, the beekeeper didn't really receive any payment for increasing the output of apples, and the apple grower didn't receive any payment for increasing the production of honey by bees.

And so here's the beekeeper and the orchard owner mutually benefiting each other, but they didn't get compensated for an important piece of what they did for the other.

Therefore, from Mead's perspective and standard economics perspective, there was too little honey being produced, there's too little beekeeping, and there are too few apples being produced.

Yeah, positive externalities are a lot less common in economic thought and possibly in the actual world.

So in this case, there are two interesting things going on here.

One is it is a positive externality.

I mean, forget about the production of honey for a minute.

If the bees visited the apples, pollinated the apples, increases the yield to the orchard owner, that's a positive benefit that the beekeeper ostensibly doesn't get paid for and put a pin in that ostensibly.

And the other interesting thing is it's reciprocal.

Not only is the beekeeper benefiting the apple grower, but the apple grower, by having this nectar source, is benefiting the beekeeper.

So this positive flow of externalities goes both ways.