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Well at least that’s what everyone seems to think. Take for instance the economics consideration of the term “true public good”. If you are economics savvy, you know that a true public good is defined as a resource both non-rival and non-excludable. That is: You cannot easily charge one for the resource and thereby exclude him from use for nonpayment. And, one’s use of the resource does not reduce availability to another of said resource.
But if you’re not economics savvy you might want to debate what the term REALLY means. The words “true public good” seem to conjure images of the things we like in life that the government “buys” for us.
I must assert the obvious: Not everything provided by the government is a “true public good”. Not every “true public good” should be provided by the government.
Some assert that government spending should be limited to only “true public goods”. I pretty much agree but think there are a few private goods that deserve consideration (fire fighting and law enforcement) and a few public goods that should be hands off (Over the Air TV)
What do you think?
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9 comments:
To me this topic is a can of worms.
I'm a career fire/paramedic who retired after a 25 year career. So I'm probably biased.
I also have a problem with the term, "economic savy." You might understand what a true public good is but on the other hand be incapable of balancing your checkbook. Many might argue that Bill Gates is not economic savy. Just a nerd who was in the right place and the right time. Bill Gates believes we as Americans are not paying enough taxes. That's probably easy to say when your net worth a few years ago was listed at over 100 billion dollars! I can barely comprehend a billion let alone over 100 billion.
I've also worked as a government regulator and understand most regulations come about as a result of some event that most did not deem to be a true public good screwing up. Is it a public good to ensure businesses and certain professions are licensed? Some will say yes, others no.
I'm certainly not in favor of a private military that would have access to nuclear weapons.
I live in the Washington, DC Region. Prior to 1971 all the mass transit services were provided by private companies. But they could not afford to upgrade or refused to upgrade their services to meet the demand. Therefore, the government stepped in and took over mass transit services. This has happened in most major US locales. I believe government run mass transit in the Washington, DC Region is a true public need/good. Without this mass transit system, the DC metropolitan region would be in constant gridlock. On the other hand, due to bad policy/planning I do not believe the CVTD is a true public good. That might sound hypocritical but I believe we're talking apples and oranges concerning mass transit in DC versus CV.
Ironically, I'm a fiscal conservative living in a bastion of ultra-liberals who believe the governmnt should run almost every aspect of our lives. It is not easy at times.
I will stop here before I say something I will later regret. The air around me has already turned red.
Fric Mon, quick side note: How about that drug bust in your area where a Mayor's house was ransacked and dogs shot during a drug raid...and the Mayor doesn't have anything to do with the supposed drug ring? Crazy stuff!
Fric Mon,
You might be missing the main point here:
"Is it a public good to ensure businesses and certain professions are licensed? Some will say yes, others no."
The definition for "true public good" to an economist is not open for debate much like the definition for "sunk cost" or 'opportunity cost". Something either is or isn't non-rival AND non-exclusive just like an Earned Run either is or isn't one to a baseball statistician.
It may or may not be good for the public to require licenses in order to perform certain duties, but licensing in and of itself hardly qualifies as a non-rival, non-excludable true public good as defined by the discipline of Economics.
I think the whole concept is more rudimentary than you letting it be.
Bluto,
That bust is bizarre. We're hearing one side of the story right now. However, I'm going to wait for more evidence before making a judgment. My first thought after hearing the Mayor's side of the story is someone who has a hair up his ass against the mayor set him up. There's also a report in the Washington Post that the mayor's wife might have been involved. This is so bizarre I'm going to withhold judgment until the FBI boys have time to sort it all out. I'm not sure what the motive of the mayor would have been to go so public with this in a media circus atmosphere. And his wife's tears seemed less than sincere to me. What are the chances of 450 lbs of pot being delivered to your home. Then you take them inside and place them on your table without questioning what in the heck is this delivery to begin with? Too many questions right now for me to believe either side. The mayor or the local police. So stay tuned. This story ain't going away anytime soon.
This is driveing me nuts as well. I study finance and do some consulting both for investing money management, debt, and Wealth Managment. so i get to see both ends of the spectrum and you would be suprised that there is realy no education of finance or money on either end realy the lack of financial education in this country is mind blowing. If you were to bring someone out of the 1700's and let them see how poorly educated people are in business and finance now with all there schooling they would laugh. they may have been homeschooled but when dad died the 13 year old could keep the farm and business running
are 13 year olds probley dont know what a check book is and have no idea how to read a financial statment they just know if they take moms credit card they can get a new i phone
CNN Money is the worst i have never herd more stupidity from so called exsperts this week they said that the falling gas prices will actuly hurt consumers and peoples pocketbooks after preaching for the last 5 yrs that the rising gas prices were doing it
its all laughable
until we teach finance to are youth and everyone in there lives you will never be able to depend on people that get elected on other peoples money to be able to determen how to spend more of other peoples money
Enron has taught us business is not good at self-government.
So did the great depression (no stock market regulation) and the current mortgage folderol (no lending regulation).
Without regulation, private business eventually succumbs to greed and crumbles.
Conversely (or similarly), government is not good at self-business.
Social security. Medicare. Lobbyists.
Without regulation, government eventually succumbs to greed and crumbles.
Just ask the Romans.
Market forces can take care of governing private business pretty well Hornold Toblower. Sure we need some regulation like anti-trust law and such. I agree with you on this though I've heard many o' argument against even that.
I do not think Enron taught us much new about economics though. It may have reinforced the notion that man just might be basically evil. We're takers by default maybe. Or maybe not, maybe there are just some REAL greedy creative movers and shakers out there who know how to stimy the system which is to say they know how to use the government and its regulatory processes to a damaging and selfish end.
Ya know TH,
Maybe some of this comes down to one simple concept. We are all happy to pledge to "do the right thing"; but, the profit motive trumps our will for integrity.
Of course that has nothing to do with public or collective goods as defined by the discipline of economics.
Bluto,
In your definition of "true public goods" you used the word "resource". As you well know, when economists speak of resources, we're talking about land (the gifts of nature), capital (both physical and human capital), labor, and entrepreneurial aspects. When you define "true public goods", I wouldn't use the word "resource" in that definition. Rather, I would speak of "true public goods" as being a GOOD/SERVICE (rather than "resource") that is nonexcludable (not really possible to charge according to use) and nonrival (my use reduces the amount available to others).
People who want to justify their support of government provision of goods/services that aren't really true public goods simply reject this widely-accepted definition. Rather, they desire to use instead, what I think of as, the touchy-feely definition. It's like having a referee in a basketball game calling a double dribble on a player and having that player want to redefine double dribble because he did it.
I like the standard, widely-accepted, and emotion free definition. It's a great criteria in determining what the government might be involved in.
Of course, I argue that the government should only provide certain true public goods. I also believe that there may well be justification for government subsidization of certain private goods when there are significant spillover benefits and the benefits of subsidization exceed the TRUE cost of that subsidization.
Boy now, isn't this a darned strange philosophy??? Let's just say I want the average citizen in this country to be as well off as possible. And, I think this philosophy is the way to get that.
Thanks for stoppin' by Doug and thanks for setting me straight on the word usage.
I've been trying to avoid the word 'good' with these illustrations because it so often leads to confusing "public good" with things that are "good' for the public.
I used the word "item" recently and it seemed to serve the purpose. I should have given the word "resource" more thought!
Stick around! I'll be back next week.
We really do need to have lunch one day if nothing else to discuss our similar taste in music!
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