July 16, 2004
Quote of the Day
First, we see that "public goods" are rare things. There's a great collection of essays by economists called "The Theory of Market Failure" edited by Tyler Cowan, which includes descriptions of the way private organizations historically built lighthouses, and the market for honeybee pollination (lighthouses and pollination are both classic examples of public goods in econ texts which are in the real world not public goods.)
Second, even if we are confronted with a public good, given the general incompetence of a non-market signaled monopoly organization with an unchecked budget at accomplishing anything, why would we imagine the organization would be able to figure out the "true" demand for the public good and supply it at the economically efficient level? Also, why do we imagine that the extraction of funds from all sorts of weird tax sources in any way properly reflects the "true" consumption of the good by the populace? "Solving" the public goods problem with government is like searching for your car keys under a street light 500m away from where you dropped them because the light is better there. Sure, it makes you feel as though you are doing something, but does it actually get you any nearer to your goal?
Perry Metzger
Posted by Russell Whitaker at July 16, 2004 01:21 AM | TrackBack