It has long been understood that corporations generate negative ‘externalities’, otherwise known as ‘social costs’. These are costs that are clearly identifiable and often calculable, resulting from the activities of corporations, but which they do not account or pay for themselves. The classic examples of such externalities tend to involve environmental degradation, for instance, oil spills. Where these costs are sufficiently severe and the culprit sufficiently obvious, campaigns and regulatory agencies are mobilized to ensure that the corporation concerned re-admits these costs, through compensation, fines or some type of market-based incentive. It is worth noting, however, that all economic activity generates some externalities, be they positive or negative. The question is whether or not the unpriced cost or benefit is sufficiently great, quantifiable or problematic to require some accounting or regulatory innovation, to formally recognize and respond to it in some way.

In this chapter, I want to look at a particular type of externality, which receives less attention in critical analysis of corporations: psychological externalities. When the notion of ‘externality’ is invoked, it typically refers to something ‘social’, in the sense of non-market spaces, goods, values and relations. The notion of a ‘psychological externality’ is introduced here, to refer to the ways in which economic activity generates unhappiness of a kind that is both quantifiable and yet not adequately calculated by the price system. Just as corporations may externalize costs onto the environment, which eventually rebound onto all actors in a market (including themselves), so they can externalize costs onto the minds of employees, citizens and consumers, which eventually result in tangible economic costs for all. Various mental health afflictions, such as anxiety, depression and stress, are associated with corporate practices, which corporations do not themselves account for fully, which is why they are designated as ‘externalities’. While corporations may engage in various types of ‘wellness’ plans, to alleviate the impact of stress on their more valued employees (Cederstrom and Spicer, 2015), the broader psychological costs of work, advertising and corporate culture are typically externalized across the public.