Negative infectious disease externalities are less prevalent in the absence of government intervention and less costly to society than is often supposed. That is so for three reasons. (1) Unlike externality‐creating behaviors in many classical externality contexts, such behaviors are often self‐limiting in the context of infectious disease. (2) In market economies, behaviors that may create infectious disease externalities typically occur at sites that are owned privately and visited voluntarily. Owners have powerful incentives to regulate such behaviors at their sites, and visitors face residual infection risk contractually. (3) The social cost of infectious disease externalities is limited by the cheapest method of avoiding externalized infection risk. That cost is modest compared to the one usually imagined: the value of life (or health) lost to the disease if government does not intervene. We elaborate these arguments in the context of the COVID‐19 pandemic.

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Many economists have analyzed the efficiency of a volunteered army relative to a conscripted army. However, they have rarely studied the working of real-world alternative, market-based, military institutions where exemptions from military service are traded among the citizens. This paper fills this gap by studying the rise and fall of the Remplacement Militaire in the eighteenth and the nineteenth century France. This system endured for more than three quarters of a century until the French government progressively moved toward universal conscription after 1872. At times of military expansion, the State regulated the replacement market. We argue that the goal of such regulations was to limit the increase in fraud and avoid a deterioration in the quality of the soldiery associated with increases in the price of replacements.

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