Externalities is a word we use to refer to unpaid costs or benefits. Most of Us are Liberals and/or Social Democrats and believe in market economies, therefore we sometimes use market-specific words to express ideas. Externalities is one of those ideas. In production, the total cost of an item produced is the total of the costs incurred in it's production and presentation at market. Sometimes, the total cost fails to include all the costs incurred in production of an item or provision of a service. When costs are incurred (or benefits are realized) by people who aren't party to the market transaction, we call those costs external costs (benefits) externalities. Many of the things we now call negative externalities used to be called nuisances in the old common law.