This chapter examines two categories of merit goods: goods whose commodification is in itself costly, and goods whose allocation through the prevailing distribution of wealth is highly undesirable to a significant number of people. Both types of merit goods differ from the generality of goods whose market allocations lead to more traditional sorts of external costs. The external costs caused by merit goods are mental sufferings that their allocation in the ordinary market imposes on other people. Before explaining commodification and commandification in more detail, this chapter considers the particular and special externalities associated with some goods and bads that seem to differentiate them from most goods and bads. It also discusses these externalities and these goods and bads within the context of economic theory. Finally, it explores tort law as an example of the attempted optimization and allocation—through modified command and markets—of merit goods that we do not wish to deal with through pure command or pure markets.