People generally use externalities as a basis for government intervention. "If something creates a big negative externality, then someone [i.e. government] must do something about it." I find this line of reasoning amusing because it's self defeating. If we apply this logic coherently to states, we can see that states create the biggest negative externalities. Ones pops up my mind:

-Wars->Kills thousands of innocent people, creates orphans, destroys economy

-Inflation-> Inflation effects people's standart of living, governments tend to increase inflation, thus we can say this is a negative externality, too.

-State education-> Education is about signalling, it seems that it has a lots of positive externalities on the surface, but government creates overeducation which is ultimately negavite externality

-Politics->This is the most important one in my eyes. Let's say we have two candidates, A & B. Q of the people voted for A and H of the people for B. And there are who doesn't bother to vote of course. A's economic and social policies will directly effect both B voters and non-voters although they didn't choose A.

The list can be expanded infinitely. So, if people think government should do something air pollution because it harms people, then government should do something about government because it also harms people in far greater extent. Yet so many people don't see this implication of negative externality argument.

p.s.: I am not sure whether I used "negative externality" term right or wrong, but even if my usage is wrong it doesn't change the main claim.