That’s why you need to internalize the externalized costs with taxes and regulation.
We have over a century of evidence that you can’t because the government fundamentally represents the interests of the class that holds power. In a capitalist society it’s the capital owning class because wealth directly translates into influence.
I should have clarified, the application of new technologies and innovations is better in free market systems. The USSR invented the cell phone for example, but it couldn’t be widely spread because the bureaucracy underestimated the benefit.
Markets aren’t in any way at odds with what I’m suggesting though. Markets are perfectly compatible with a socialist system.
Free market investing is what promotes the wider application of innovations. A government owned investing apparatus is worse at that. That’s what I meant by free market.
Again, there’s little evidence to show that private investment drives socially useful innovation in practice. In fact, we can contrast the kind of innovation we see in western countries where investment is largely private and in China where the government plays a large role and much of the industry is state owned. China now has the best high speed rail network in the world, it dominates in renewable energy, has developed thorium nuclear reactors, it’s leading in electric vehicles, and so on. That’s meaningful innovation that’s directly improving the lives of people.
