kolmogorov:

...Natural markets don't include many things we really want to have, like clean air. Such things are called "externalities". Since there is no natural market for clean air, if you want clean air you have to do something outside the natural market. ...

Exactly- now you understand that the free market is not a panacea.

kolmogorov:

One way is to have government officials sit around and mandate all the allowed activities. You could have the government decide how many showers each citizen gets, how many miles they get to drive on their cars, whether or not you get to eat oranges in Minnesota, and so on. That's one way to achieve the end of lower pollution. Or you can let people choose for themselves what they want to do within the constraints imposed by the real cost of the activity. Currently people don't pay the pollution costs of many things, so they are essentially freeloaders. The key question, though, is who should decide how many baths you get to take? Me? You? Some third party? The city council? Who should decide where you can grow Strawberries? If a resource is scarce like water, or the air's capacity for pollution, someone, or some process, has to decide who gets to use the resource and how much. How is that done in *your* fantasyland? ...

I'd much rather have a government mandate how many gallons of water each person is alloted, than your system where the rich gets all the water they need to bathe their poodles in bubble bath, while the poor have to drink malaria infested muddy water.

Ideally there needs to be a balance of both government mandated equality, and also a measure of market forces. Such that each person is guaranteed some minimum of water allotment. There will be surcharge for exceeding the allotment; or maybe anything above the minimum alllotment is purely subject to market pricing.