Here’s the thing. Capitalism is really, really good at generating wealth. What it’s not so good at (read: sucks) is at handling externalities.

So what the heck, you may ask, is an externality? In short, it’s the hidden costs of a transaction — costs that are not directly borne by the beneficiaries of that transaction.

Back when I was in college, we visited a copper refinery. I will never forget those big, swinging vats of molten metal, how the glowing stream poured down, how the dark, dirty slag was skimmed off of those beautiful, cherry-hot bricks. The sweat on our brows, in that hot building; the acrid tang in our nostrils. Big, industrial tech is impressive stuff. Think about it. We dig rocks up out of the ground, we heat it up and purify it, and next thing you know, we’re using it to build computers, rockets, and radiators. Holy satellite array, Batfans.

Copper in particular is extremely important. It’s in our coins; it’s the wires and brass fixtures in our homes; the radiators in our cars; it’s in the computer you are using to read this post.

So, let’s say you have a home improvement project. You have decided to convert your garage to interior space. You swing by Home Depot to buy a lot of stuff, including, say, copper wiring to add some power outlets out there, a new air conditioning unit, and your stereo set and your computer; whatever. Well, Home Depot probably bought that copper wiring from an electrical parts manufacturer, who in turn bought the raw copper from a metal smelting company. The metal smelter either bought raw copper ore from a metals extraction company, which dug it out of the ground, or dug it up themselves.

At each step of this process, money changed hands. The smelter paid the mining company, the electrical parts manufacturer paid the smelter, Home Depot paid the parts manufacturer, and you paid Home Depot. Game room complete. Go, you! (Seriously; go you. Finding time to make your space more amenable, when the demands of the workday and making sure your family is taken care of exact such a price, is no small feat.)

Now, let’s back up a couple of steps and take a closer look at that smelter. That smelter has been around for a while. It was built, let’s say, back in the 30s, back before epidemiology and the other medical sciences were sophisticated enough to tell us just how bad an actor lead is on the human nervous system. Lead, incidentally, is a common impurity in copper ore. Because nobody knew back then how bad for you lead is, there were no rules in place to restrict handling of copper slag, which is often high in lead content. And because companies, after all, are in business to make money, they didn’t spend much more time and thought on the subject than to dump the slag in big piles off on one edge of their property.

It takes workers to purify copper. So homes were built just outside the refinery. The workers could walk a short distance along the fenceline to the plant gate. Convenient!

As people figured out that lead is bad for you, over the decades, the folks that could afford to do so eventually bought homes farther away from that copper refinery. Much farther. Nobody really wanted to live there. So property values dropped, as values do in a market economy. Consequently, the only people who can now afford to live there are poor people, mostly the same people who were working for minimum wage at that refinery, before it closed. With…if they’re lucky…health insurance. And they are going to need it. Because their little kids are out there in the backyard, playing in soil that almost certainly has elevated levels of lead. Babies and toddlers put everything in their mouths, you know.

That’s an externality. Those people were paying with their bones and their blood and the health and mental function of their children for the copper and brass we use in our homes and cars and office buildings.

I have in fact stood at the fenceline of such a facility, and looked into the yards of the refinery neighbors, poor families with rundown houses and teetering plastic playsets in their yards. It is hard for me to describe to you the gut-deep illness I felt, when I realized I had no lever to effect change at that plant, within my organization. The hazardous waste law, the Resource Conservation and Recovery Act, exempts mining wastes from the most stringent cleanup requirements. Superfund, another big cleanup program, had bigger fish to fry — not enough people were affected.

I could, and did, tell my management about those families living at the fenceline, and my suspicion that they were being exposed to heavy metals. But when they asked I had to answer honestly, no, there is no law requiring us to clean it up. No, I haven’t taken samples to ensure they aren’t being exposed to dangerous levels of lead. No, there is no requirement for us to do those tests. No, I have no proof. Only suspicion. Deduction, based on the history of smelting and the historical lack of regulation. I wasn’t the one holding the purse strings, who could authorize the cleanup. I was merely an internal consultant, who could, if I could find the right word, prick their conscience enough to act.

I was very, very lucky. This issue arose at a time when my boss’s boss had just taken up his role, and he had a personal commitment to environmental protection. He agreed to commit the company to a multi-million dollar cleanup that was not required by law. If the issue had arisen six months earlier, or two years later, that would not have been the case.

And bear in mind, this sort of thing, this accumulation of hidden costs, happens at every step in the process. The miner, the smelter, the manufacturer, the distributor, are all using energy and chemicals to convert the compounds we use every day from their raw materials into the things we bring into our homes. Global warming is simply another externality, a hidden cost—the cost of our hunger for energy, paid by our atmosphere and our ecosystem, and ultimately, ourselves.

I have many times heard my colleagues and clients in industry grouse about the inefficiencies of environmental regulations. And there is some truth in what they say: the environmental regulatory code is at least as voluminous and complex as the tax code — if not moreso. But we can’t rely on personalities for something this important. Without an evenhanded, thoughtful set of requirements that defines the bottom line — you can go this low with your cost savings measures, but no lower; you must get your emissions at least this clean — the companies that try to do the right thing will be outcompeted by the ones who could care less. Who would have done nothing for those families living on that old fenceline.

And that’s the truth.