Quote 708 “ Once the mechanism for coercive takings is established, how can we be sure that they will be used impartially to provide public goods rather than to serve the partial interests of either consumers or suppliers at the expense of those from whom the resources are taken?” -- Randy Barnett
DefinitionTo be called a public good, that good must exhibit two traits:
E.g A lighthouse, or national defence.
Please check out the social goods page to see goods that could be provided privately but are treated as public goods.
examples national defence and atmosphere
The argument that some infrastructure goods must be provided by the statePUBLIC GOODS argument - private sector would not provide
Non excludable and non rivalrous but most is actually excludable like toll boths, but light houses are not
non rivalrous means
Overall a weak argument
If government is providing them, we have no way of being sure that goods are in fact public goods or that they are being supplied at the socially optimal level.
Quote 1038 “ There is no single ‘public interest’ anyway. We live in a world of value-pluralism: different people have different values and different interests. Competition between competing interests is inevitable. This makes it vital to study how such competing interests and demands are resolved by the political process. ” -- Dr Eamonn Butler MONOPOLYIf the state did not provide the goods the private sector would have a monopoly
Firms would overcharge, a single seller can raise prices at will. However if you charge too much there will be competition, from either substitutes or competitors who can now compete. Regulation creates barriers to and creates monopoly
Is state monopoly any better than a private one?
EQUALITY
Privatising would exclude certain groups, the danger is - customers might not buy enough to make transaction viable for the seller. This argument doesn't hold
Government already protects big business and restricts choices for poorer people so are not really interested in equality.
ENVIRONMENT
Cures can be worse than the disease - as policy's can mis-price, and bow to certain industries, pushing the pollution overseas.
SHORT TERMINISM
However risks don't disappear with government projects, just they are loaded onto taxpayers and consumers.
COMPULSORY PURCHASEState authority needed to deal with holdouts - "why govt are needed"
Complexity of schemes means state more efficient
Transaction costs inflated by regulation - markets work to reduce transaction costs
Property rights threatened
PUBLIC vs PRIVATE provisionEconomic calculation argument - top down
Central planning v's entrepreneurial discovery
Elite preferences verses individual preferences -Voting with your money, more effective than once every election cycle
Special interests v's consumers
GOVT FAILURE ON ROADSCongestion
Poor maintenence and high accident rates
demand and supply mismatched
projects for political reasons
policy benefits special interests
Lack of innovation
costs pushed up
Underinvestment
Policy becomes designed to stop people travelling!!! (bus lanes in, footpaths widened)
Benefits of private ownershipInvestment reflects demand
Price mechanism can eliminate congestion
innovation and efficiency gains
Strong incentive to reduce accidents
Services reflect consumer preferences
market for poorer customers
Localise solutions
If people are allowed to buy better health and education, this brings more money into health and education. It also allows the state to divert the money it would have spent on meeting their needs toward those less able to provide for themselves, and to give them access to better services.
Real reasons for state controlTheft of land or people
Facilitating taxation
Rigging markets to meet political goals
create artificial scarcity on enrich elite interests
Fostering a culture of dependency - people can't create their own infrastructure.
Social engineering/social cohesion
Privatisation
Makes taxation and regulation more difficult
Disperses control away from corrupt elites
Restores freedom of association
Strengthens private property and individual freedom.
Private sector are not just businesses, they can be non profit organisations.
Government sometimes do things the free market would do anyway but just claim the credit.
Don't need third party insurance, you can insure yourself that someone without third party will crash into you.
PPP removes debt from the govts books, and gets the public to pay for it later.
ReferenceLink455Public Good |