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In Freudian psychology, externalization is an unconscious defense mechanism by which an individual projects his or her own internal characteristics onto the outside world, particularly onto other people.[1] For example, a patient who is overly argumentative might instead perceive others as argumentative and himself as blameless.
The market-driven approach to correcting externalities is to  internalize  third party costs and benefits, for example, by requiring a polluter to repair any damage caused. But, in many cases internalizing costs or benefits is not feasible, especially if the true monetary values cannot be determined. negative externality (also called external cost or external diseconomy) is an economic activity that imposes a negative effect on an unrelated third party. It can arise either during the production or the consumption of a good or service.