Negative externalities are best handled by tort law. Let case law develop over time. Central planning (i.e. one law with 'good intentions') does not work.
Tort law works okay when the number of interacts are limited, but it falls down when you're talking about large numbers of people interacting. Ronald Coase, who is deified in modern conservative economics circles, said as much in his seminal 1960 paper on the FCC.
So I can sue smokers for polluting my air as I walk past them? How about my neighbors who play loud music at 4am? Oh, and that guy who urinated on the plants outside my apartment?
Hmmm. I'm not sure that it's so easy for courts to take on all these cases. I'm especially worried that it's too much burden on individuals to defend their rights. Maybe we should try to find a consensus on what's OK and have the police hand out tickets?
