# "Public Goods" -- the forgotten guiding principle of government? **URL:** \ **Category:** Great Debates\ **Created:** [September 7, 2002, 2:47pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437 "2002-09-07T14:47:54Z")\ **Posts on this page:** 10\ **Page:** 1
**Author:** ![Beagle](https://avatars.discourse-cdn.com/v4/letter/b/85f322/32.png) [@Beagle](https://boards.straightdope.com/u/Beagle)\ **Post date:** [September 7, 2002, 2:47pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/1 "2002-09-07T14:47:54Z")
To me, the fundamental role of all government - especially the federal government - is providing [“public goods.”](http://mondediplo.com/2000/06/15publicgood) > [@](#): > > What is a public good? This question can best be answered by looking at the counterpart, a private good. Private goods are typically traded in markets. Buyers and sellers meet through the price mechanism. If they agree on a price, the ownership or use of the good (or service) can be transferred. Thus private goods tend to be excludable. They have clearly identified owners; and they tend to be rival. For example, others cannot enjoy a piece of cake, once consumed. > > Public goods have just the opposite qualities. They are non-excludable and non-rival in consumption. An example is a street sign. It will not wear out, even if large numbers of people are looking at it; and it would be extremely difficult, costly and highly inefficient to limit its use to only one or a few persons and try to prevent others from looking at it, too. A traffic light or clean air is a further example. > > This poses immediately the question of who, then, provides public goods. Once they exist, they are there for all to enjoy. So it is often the most rational strategy for private actors to let others go first and seek to enjoy the good without contributing to its production. This is a dilemma, that public goods face. Without some sort of collective-action mechanism, they risk being under-provided. Conversely, without collective action, public bads - such as pollution, noise, street crime, risky bank lending, and so on - would be over-provided. It seems to me that the federal government is far too involved in attempting to provide private goods like retirement plans, drug benefits, education,\* housing and other things which should be left to the market, addressed through taxation, or approached by _state_ governments. (The U.S. has 51 governments remember) As a result, non-sexy issues like highways, the federal court system, the environment, national defense, disaster preparedness, the postal service\* - and other public goods our very national survival depends on - get pushed onto the back burner. Have coffee, discuss amongst yourselves. \*I concede that many things are neither clearly public nor private goods - public education comes to mind. It seems to have components of both. I support public education, btw. I still cannot figure out how it is a _legitimate_ federal concern. Absent civil rights considerations, or other fundamental rights, the federal government has no business in education. Also, the postal service - not so much a survival issue and has components of both a public and private good. Private entities could, and do, provide much of the same service. But, right there in Article 1, Section 8, (7), of the U.S. Constitution we have the enabling of a federal postal service. ---
**Author:** ![musteion](https://avatars.discourse-cdn.com/v4/letter/m/a6a055/32.png) [@musteion](https://boards.straightdope.com/u/musteion)\ **Post date:** [September 7, 2002, 6:01pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/2 "2002-09-07T18:01:23Z")
> [@](#): > > \*Originally posted by Beagle \* > > \*I concede that many things are neither clearly public nor private goods - public education comes to mind. It seems to have components of both. I support public education, btw. I still cannot figure out how it is a _legitimate_ federal concern. Absent civil rights considerations, or other fundamental rights, the federal government has no business in education. How can you see public education as anything other than a public good? There is no greater public interest so intimately tied to our collective welfare and prosperity than education. I know what you’re trying to say (I’ve read Locke, Rousseau, et al), but education seems pretty untouchable in this matter. ---
**Author:** ![aramis](https://avatars.discourse-cdn.com/v4/letter/a/e68b1a/32.png) [@aramis](https://boards.straightdope.com/u/aramis)\ **Post date:** [September 8, 2002, 3:29am UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/3 "2002-09-08T03:29:48Z")
> [@](#): > > It seems to me that the federal government is far too involved in attempting to provide private goods like retirement plans, drug benefits, education,\* housing and other things which should be left to the market, **addressed through taxation** , or Isn’t addressing something through taxation pretty much the definition of having government address it? I don’t support government’s role in all of the areas you addressed but I can see that the rationale behind all of them is very close to the rationale used in support of public education. If an educated populace is important to maintaining a free society, can we not reasonably say that a healthy populace is also? And likewise for the other issues at hand, though admittedly the argument gets stretched in the other areas. The unstated principle that lies behind the public goods argument is that of the common good. If government doesn’t provide for the common good, it has no purpose at all. Let me start with an example. During my time in the service, 20 years in the Air Force, it was a truism that the AF was mocked by the other services for providing a relatively cushy environment for its people. The obvious response to them is that when you have a a 20-year old Airman First Class who’s responsible for the proper operation of a multi-million dollar aircraft, you want him to be focused 100% on keeping that plane in good order, not pissed off because the dormitory he’s forced to live in is a place that might have been considered reasonable housing 50 years ago. Because of that, the AF has tried to provide a _relatively_ nice place for its people to live. Standards have changed though, so just putting a frsh coat of paint on the old barracks doesn’t cut it – neither does building a brand new barracks if its just a new building that’s still one big room with 50 beds in it. I think that same principle applies to many of the areas you address. Things that were properly considered private areas a few years ago can and do become issues of larger social import as time goes on. Take the prescription drug issue; until just a few years ago, that was an almost entirely private matter. Of course that meant that those who could afford those drugs used them, while those who couldn’t suffered and quite possibly died because of it. As we’ve come to recognize that disparity, and to get angry about it, it has the potential to cause social unrest, and social unrest is contrary to the common good, and so is a valid area for government to take action. The nature of that action is another matter entirely. So far I haven’t heard anybody calling for the government to take over or even buy up a major pharmaceutical company. As to argument that these things can be provided by private concerns, that may be true to some extent now, but in the 1780’s I don’t think there were any large concerns ready to take on the business of delivering mail. Even today, I doubt any private company could do it except possibly as a government-regulate monopoly. Without that regulation, it would be awfully tempting to drop service to unprofitable regions or raise prices for them. What we all see as a fundamental requirement for maintenance of a society would disappear or become prohibitively expensive in some areas. Likewise with education, even with private schools available today in many areas, the vast majority of Americans (no I don’t have a cite) are educated in public schools. History shows us that until it became mandatory that children attend school a given number of days per year, it was common for families to keep the kids at home to do actual labor. From our comfortable position in the America of early 21st century, we may think that was a terrible thing but at the time it was considered a perfectly rational decision, maybe even essential for the family’s survival. Think what the choice would have been if those families had been obligated not only to forego the child’s labor but also to pay some private school for the privilege of doing so. Yes, families still pay for the schools in their taxes, but they share the burden with all the rest of us (like myself) who don’t have children but still have to pay taxes that support public schools. Because I do think it’s a worthy social goal and a valid governmental function, I don’t complain too vehemently about paying those taxes. In the long run we all benefit from it. > [@](#): > > As a result, non-sexy issues like highways, the federal court system, the environment, national defense, disaster preparedness… get pushed onto the back burner. I agree with you in some of these areas but is it really your impression that national defense is on the back burner? Our postal system is also pretty darn good, in spite of my regular complaints about the price of stamps. ---
**Author:** ![Beagle](https://avatars.discourse-cdn.com/v4/letter/b/85f322/32.png) [@Beagle](https://boards.straightdope.com/u/Beagle)\ **Post date:** [September 8, 2002, 6:30am UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/4 "2002-09-08T06:30:57Z")
> [@](#): > > How can you see public education as anything other than a public good? The distribution of the benefits. I see public education as one of those many gray area cases between a pure public good like the environment or a pure private good like golf balls. > [@](#): > > Isn’t addressing something through taxation pretty much the definition of having government address it? Not exactly. Taxation is a middle ground between government preemption and no government at all. But, functionally, yes, if the taxation is onerous enough the government(s) can even destroy with taxation. > [@](#): > > If an educated populace is important to maintaining a free society, can we not reasonably say that a healthy populace is also? Good point. I think the tax breaks on medical expenses are a good thing. I am not sure that the federal government should be involved in a massive overhaul of the medical profession. (Sorry, Hillary, if you are a Doper.) State governments could play a greater role, in my view. The states regulate insurance and the medical profession already. The federales are likely to do for medicine what they did for the passenger railroad industry. I have noticed a tendency in politicians to [Ross Perot] buy votes with the taxpayers’ money. Lookie here at this chart.[/Ross Perot]. It just makes political sense to focus the attention of government on issues that are likely to get the politician elected or reelected. Meanwhile, over at the DoD, [cricket sounds]. > [@](#): > > but is it really your impression that national defense is on the back burner? Not any more. Of course, losing the Twin Towers and part of the Pentagon was a major type of a kick in the ass I hope not to see frequently. Actually, given some of the measures which have been implemented or advocated, maybe I am not in favor of the government spending more time on national security. This may be the be-careful-what-you-wish-for principle in action. Maybe some further inattention would be better. ---
**Author:** ![musteion](https://avatars.discourse-cdn.com/v4/letter/m/a6a055/32.png) [@musteion](https://boards.straightdope.com/u/musteion)\ **Post date:** [September 8, 2002, 6:40am UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/5 "2002-09-08T06:40:57Z")
> [@](#): > > \*Originally posted by Beagle \* > > The distribution of the benefits. I see public education as one of those many gray area cases between a pure public good like the environment or a pure private good like golf balls. If you are looking for the government to implement something perfectly, you ought to look for the planet where that is possible. The principle of public education as not merely a public good, but also as a Constitutional right has been vastly implemented. It has been a huge success for the most part, but, of course, there is room for improvement. Still…the principle is intact, I’d say considering the state of the country prior. =P ---
**Author:** ![Apos](https://avatars.discourse-cdn.com/v4/letter/a/838e76/32.png) [@Apos](https://boards.straightdope.com/u/Apos)\ **Post date:** [September 8, 2002, 6:41am UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/6 "2002-09-08T06:41:35Z")
—Absent civil rights considerations, or other fundamental rights, the federal government has no business in education.— The major legitimate reason the government might have in supporting education is that education has many positive externalities that individuals fail to account for when they decide how much education to get. Hence, on their own, individuals underinvest, and society misses some potential benefits. That is: education, goes a fairly good arguement, benefits everyone in society, not just the educated individual. However, that’s an arguement for the government subsidizing education (perhaps to the same level it does today, or even more), not RUNNING it. It’s important not to confuse the two. ---
**Author:** ![hawthorne](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@hawthorne](https://boards.straightdope.com/u/hawthorne)\ **Post date:** [September 8, 2002, 1:04pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/7 "2002-09-08T13:04:56Z")
I think, Beagle, that you need to separate the two issues. One issue is publicness, the other multi-level government. Most government activity is not involved with the provision (as distinct from the production, which as Apos says, is yet another issue) of pure public goods. But even that which is concerned with public goods need not concern the central government. Street lighting is a _local_ public good. Greenhouse gas emission reduction is a _global_ public good. It’s not whether something is or is not purely public which determines the appropriate level of government, it’s the geographic extent of the spillovers (unchargeable benefits/costs) and (to a lesser extent) the existence of tax bases to deal with the problems. Certainly things like education and health care are not pure public goods (in the sense of the standard economists’ definition which is indeed the one you give). They are impurely public or perhaps what are called “merit wants”. Government intervention in health care, for example, may be attempted to be justified in terms of [ul][li] the positive spillovers involved in preventative health care: if private individuals ignore the positive influence their management of infectious disease has on others, the market will underprovide preventative health care **and** misallocate whatever amount is provided between different consumers\*.[_]The failure of the insurance market due to moral hazard (the tendency of the insured to alter their behaviour once insured) and adverse selection (the tendency under asymmetric information for insurance pools to systematically consist of higher-risk information) which leads to upwards of 43 million non-elderly Americans having no insurance.[_]The combination of insurance and ignorance leading to the behaiour of doctors and hospitals being free of the usual market constraints in the medical marketplace.The inevitable role of the government in a democracy as insurer of last resort.[/ul]There may be a role for government beyond public goods, although of course how enthusiastic one is about this depends on your judgement about the competence of governments and your ideology more generally. But it’s whether the policy effects are national or confined to a local area which determines the appropriate level of government to deal with the issues, as well of course as one’s judgements about the relative competence of different levels of government.[/li] \*[sub]In the event that anyone reading this is taking a course in Public Economics, if you don’t understand this second point, you don’t understand the course.[/sub] ---
**Author:** ![Apos](https://avatars.discourse-cdn.com/v4/letter/a/838e76/32.png) [@Apos](https://boards.straightdope.com/u/Apos)\ **Post date:** [September 8, 2002, 2:43pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/8 "2002-09-08T14:43:35Z")
—Certainly things like education and health care are not pure public goods (in the sense of the standard economists’ definition which is indeed the one you give).— Well, let’s not muddy the waters by becoming real sticklers now for the actual definitions of these things (and give things like “public good” their strict meanings). The last thing this thread needs is a 2-axis, four-plot boxchart of definition. 🙂 ---
**Author:** ![hawthorne](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@hawthorne](https://boards.straightdope.com/u/hawthorne)\ **Post date:** [September 8, 2002, 3:20pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/9 "2002-09-08T15:20:21Z")
You mean Musgrave’s consumption externality classification? OK, I won’t post it. 🙂 But I _do_ think it’s important to distinguish between “public good” in the sense of “non-rival in consumption, not price excludable” and “public good” in the sense that laypeople typically use it: “really crucial thing that the government needs to be involved with”. Otherwise people get confused and upset. I _do_ think that health and education are public goods in the second sense, but in the first they’re clearly not. ---
**Author:** ![Apos](https://avatars.discourse-cdn.com/v4/letter/a/838e76/32.png) [@Apos](https://boards.straightdope.com/u/Apos)\ **Post date:** [September 8, 2002, 4:03pm UTC](https://boards.straightdope.com/t/public-goods-the-forgotten-guiding-principle-of-government/127437/10 "2002-09-08T16:03:21Z")
That’s exactly what I mean, though I wasn’t entirely serious. It is worthwhile to have a good matrix of definitions along the two axes: it’s just so commonly confused and confusing already…