This paper compares the ideas of two economists, Coase and Pigou, on external effects like pollution. Coase believes in looking at the overall efficiency, while Pigou usually suggests using taxes or laws to reach marginal efficiency. Coase thinks it's not always best to aim for efficiency at the margin. He says problems like pollution are often two-way streets, where action by one person affects another. Coase criticizes Pigou's tools but agrees that sometimes compensating the victim is the answer. Coase argues that public intervention may not be needed if transaction costs are low. However, when transaction costs are high, negotiations might not work well. Coase doesn't think Pigou's methods are right for every situation. Overall, Coase disagrees with Pigou's approach because he believes in considering total efficiency and that external effects go both ways.