+1

To recapitulate, "AC" posters lodged the following objections regarding public goods:

1. No good exists that purely satisfies the definition of a public good. Rather, the terms nonrivalrous and nonexcludable essentially make reference to currently existing technology and to cost barriers. For instance, even in the oft-cited example of an asteroid defense system, it's not impossible that spending enough money on research and development of new technologies would lead to a product that is either rivalrous or excludable or both. Therefore, we can conclude that a claim that X is a public good is really a claim that: (1) it is mostly nonrivalrous and nonexludable, but not necessarily so; (2) given the current state of technology and the costs of its factors of production, we cannot imagine a means to make it less public.

2. Free-ridership may, hypothetically, result in underproduction of a specific good that resembles a public good under the criteria discussed above. There is no reason, however, to suppose that the use of force is necessary to counter free-ridership itself. First, if economists are correct in their theoretical assertions about underproduction, then there necessarily exists a profit opportunity in solving the problem. There is no reason someone cannot design a new system for excluding people, or replace the good with one that is more rivalrous , and profit thereby in theory. Second, it is not at all clear why people should be so concerned about underproduction of a specific as to justify the use of coercion or violence against others as a result, ergo even the free-ridership problem is not necessarily a justification of states. Just like it is ridiculous to kill someone for defaulting on a debt, it is ridiculous to force someone to pay you under penalty of imprisonment for hypothetical underproduction of a good.

3. There is no good way to directly measure the "socially efficient" level of production of a public good. Since intersubjective comparison of utility is involved in determining the marginal benefit of a public good, this half of the equation can at best be give a very crude approximation. Therefore, we can't say with anything resembling certainty whether or no the market outcome for a particular in good in any actual instance is efficient or not.

All these objection were raised, and the counterarguments involved a lot of sighing, handwaving, "you just don't understand"-ing, and other general rudeness, yet somehow pvn is supposedly public enemy number 1 ITT? How this conclusion accords with the facts of what happened in the discussion is beyond me. Same ol' bull**** indeed.

And while I'm at it, I'd like to take the time repost something I said to Phone Booth about a month ago:

I'm not claiming that land is a public good. Rather, that the vast majority of so-called public goods are excludable over an area, and their benefits are usually geographically concentrated in any case. No, a club is not the only solution, but I think the extensive private use of clubs for semi-public goods is evidence of its virtues. Now, ACists might say then go on to say that "So? Therefore, in AC land we'd just see a whole lot of clubs arise." It is my contention that such clubs would be quite indistinguishable from states today. States are pretty much just large clubs, though you could make the case than in AC land the new clubs would have less oligopolic power and hence be better for their citizens. I don't see why this would be the case, however, and even if it were, all the costs involved in trying to switch over may not justify it.


Also, I've noted a paradox in Borodog's "public goods are a profit opportunity" argument. Borodog undoubtedly believes that the state is a public bad, that nearly everyone would be much better off if it no longer existed. Therefore, eliminating or severely constraining the state would be a public good, and thus a profit opportunity for someone. Does the fact that it's scarcely been attempted mean that the state is indeed +EV? Borodog would probably argue that the force that the state would put up in resistance would make the attempt -EV. But what does this say about public goods and bads under AC? Won't bandits thus be able to stop many near-Pareto improvements with the threat of force?

bandits don't have the support of huge portions of the population.

This objection seems more like a glorified nit pick. It could be a public good now but might not be in the future.

How does this help with understanding the present soci economic environment?

I don't think you're using the definitions of rivalrous or excludable correctly. There's not really a way that a defense system can prevent global Armageddon for me, but allow the world to be destroyed for you. Nor does your enjoyment of the protection mean mine is diminished in any way. And the fact that it applies to current technologies is a non-starter. I'll admit goods can change, but that doesn't mean because in 3000 something will be one way makes the situation different in 2009. I mean, the ACists complain (incorrectly, IMO) that things can be defined differently, and you're using some hypothetical uninvented technology to place a label on a good today?

Additionally, it's been stated many times in the thread that a lot of the allocation problems exist for goods that approximate a public good. So the argument (even if it's true, which is highly debatable) that no good satisfies 'purely' the definition of a public good is also a non-starter.
I personally never said a government was necessary, though others may have in the thread, I don't know. And (I know this isn't a proof of anything), all the ways of trying to provide the public good fall victim to the free-rider problem either. I don't have a theoretical proof, but I have a feeling if any particular method was 'discovered', it would fall victim to the exact complaints that the ACers are bringing up themselves...see your point #3.

But things can be studied, and decent approximations can be made. Do you think astronomy isn't a good science because the estimates sometimes have huge error bars? Oh, and you're wrong about there needing to be intersubjective comparision of utility to determine the marginal benefit of a public good. You can figure out how people value a good by observation--I know of several studies looking at the enjoyment of a public park, and trying to figure out what the most that people would pay for the good.
No, the objections were explained away, but they kept cropping up (lack of understanding? Stubbornnesss? New people bringing up the same things ITT? I dont know...), and it gets frustrating answering the same questions--I know the ACists must get tired of some of the same old questions (which this one isn't)

That list of search results does not prove what you want it to prove, in large part because you(and DrModern, et al.) are still grappling with the concept of "public good" and not really getting it.

It is almost as if economics is a difficult and academically complex field.

You guys keep getting angry when you don't understand something, say something dumb that betrays you lack of understanding, and then get "handwaved" by someone telling you that you don't understand. But seriously, you don't understand. These last two economics threads have followed a fairly predictable pattern of:

1) Introduce concept
2) ACist assumes he knows the definition(and that it involves the evil of the state)
3) People try to correct the ACist
4) ACist gets frustrated at being told he was wrong, thread devolves into one liners about coercion

I'm not grappling with the concept I assure you. My point is that things that are not public goods in reality are called that by economists, legislators, etc, in order to justify government intervention, when often the goverment either cannot do anything, should not do anything (which is clearly subjective). That search result just proves that while most of us here agree that things like whales are not public goods, there are still plenty of environmental economists writing papers as if they were, using their amazingly incorrect theories to justify intervention.

Thanks for pointing out that genius pattern btw, perhaps with your infinite cleverness you could have answered why you think that search doesn't prove my point instead of making broad-based claims that don't further discussion.

This isn't a policymakers or interest groups discussion. This is a bunch of randoms on the interest trying (I hope) to gain some insight into a complex subject. Blue whales do not fit the description of what we are discussing. There is a tragedy of the commons issue which is certainly related, but I wanted to stress that while the difficulties in each situation share common features, ownership or possession of a blue whale is entirely rival. This makes it entirely different from, say, the provision of rule of law, which cannot be handwaived away quite so easily with a "properly defined property rights" argument.

Fly,

I don't think that last post is particularly productive...

Why do you assume you understand how technology will progress? I am certain you would not purport to have understood the development of cell phones or laptop computers 20 years ago, yet you know for a fact that there is "not really a way" a system can prevent a catastrophe for only a certain segment of the population? The development of technology is spurred by investment, labor, and creativity; it's a virtual certainty that things will be possible in the future that we customarily assume are impracticable.

No, I'm not. I never attempted to say that my point was a reason to shield one's eyes to the exigencies of one's present existence. In fact, understanding this point makes clearer that, empirically speaking, public goods don't exist in the real world in any pure state; rather, only goods that roughly approximate the definition of a public good exist. If one wants to understand these economic phenomena better, isn't that project advanced by understanding that there aren't pure public goods, and by recognizing that the advancement of technology may alter a particular things degree of publicness. If you would actually read what I write instead of assuming its purpose is to vindicate AC, I think you would have any easier time admitting this definitional point.

What? No one said they're couldn't be "allocation problems" even given only goods that approximate the definition. Again, this clarification surrounding the definition is not intended to vindicate AC, but only to point out what it is we're working with in practice. I would like to see a proof, however, of the existence of these "allocation problems" for any actually existing goods, however.

O.K.

Are you defining marginal benefit as the amount someone "would pay" for a good (presumably under some extremely idealized circumstances)? This seems like a strange definition to me, since the benefit the person gets is obviously not the amount of a good he or she would trade for something, but rather his or her subjective enjoyment of it. You can't measure that phenomenon--the person's subjective enjoyment of the park--using questions about money or any other good. If you define marginal benefit this way, I understand your point; but it's trivial to say that something is "underproduced" or "overproduced" on this rubric; it does not reflect the underlying reality, however, which is the subjective enjoyment of a multitude of subjective agents.

Basically, as far as I can tell, economists have defined this problem in such a way as to appear to be speaking about the underlying phenomenon ("the market in theory fails to produce a socially-efficient outcome as a result of free-ridership") when in fact they are not actually addressing the only thing that matters, which is the subjective wealth of the individuals that make up the economies they are discussing. It does not seem like a particularly useful discussion to have defined this way, and seems rather more like tinkering with a lovely model that measures nothing in the real world than actual researching the most interesting underlying phenomenon, which is the behavior of subjective utility maximizing agents in particular socioeconomic circumstances. That the definition happens to be easy to manipulate for political purposes may be merely a side effect.

I think if you go back through and actually read all the posts carefully, i.e. without assuming you are always being clear, and without any antecedent preferences for a certain "side," they tell a different story.

It doesn't seem helpful to you to understand that at present, they're aren't any pure public goods, and even for those that are more or less public, technology might change that?

dr. modern,

with current technology, many goods are scarce. future technology may eliminate scarcity. does this mean there are no scarce goods or that it is not useful to study the allocation of goods under scarcity?

But the government declaring something a public good and imposing a solution completely stifles any development in that area.

Of course not. I explicitly acknowledged that study wasn't useless; my point is that it is useful to remember the conditions under which the phenomena we are studying exist.

Also, econophile, do you agree with the definition of marginal benefit propounded ITT? It's however much someone would pay for an additional unit of a good, not how much they actually benefit? This seems wildly counterintuitive to me.

there are a few distinctions you could be making between the two concepts. maybe people systematically misjudge how much they will benefit from something. or maybe they judge correctly on average, but sometimes the actual benefit will be higher or lower than the ex ante perceived benefit.

i will allow both of those caveats. but would you agree that the amount someone is willing to pay for a good is equal to (or just under) the value of the perceived ex ante benefit? that is, say i value going to the movies at $15 (it will bring me as much pleasure as the next best alternative use of that $15). so i'll go to the movie if it is $10 or $14.5 and maybe if it is $15 but not if it is $15.5.

The government doesn't "declare something" a public good, something is a public good. Or it isn't, or it has some characteristics in common with a public good, whatever. This is the same thing pvn tried like a page ago. You guys need to understand that there are schools of economic thought that are not entwined in a political philosophy. One such school is "mainstream economics".

The only way a government can affect something's public good status is by passing laws that prohibit a means of exclusion that would otherwise be practical. xorbie, I know these last few posts aren't productive, it's just that after multiple pages we're still not at the part where everyone involved knows the definition of "public good". Maybe I should petition Elliot to put up a sticky to some economics Wikipedia pages.

tuba- When you search google scholar for "public goods whales", does it return only times where an economist defines whales as a public good? Google is pretty incredible, but I don't think it is that good at reading the end user's mind.

Whales are not public goods. Fishing grounds are difficult to exclude people from, which is a characteristic they have in common with public goods, but each fish is completely rival. As I noted last time you tried this, the "problem" with fishing stocks is overproduction(extraction), not underproduction.

Economics, like every other science, has no obligation to be intuitive.

How much someone benefits is impossible to measure without asking how much they'd pay. They'd pay, of course, exactly what their benefit is.

You need to understand that we're talking about what actually happens in the real world and not what happens in textbooks. In the real world governments actually do declare things to be this or that regardless of whether they actually are what they are being declared to be, then act accordingly.

The fact that X is not a public good is of little importance when the government is saying it is, squashing markets for it and monopolizing the provisioning of it. But if you want to score points in trivial pursuit, then yes, then it matters.

Could one of you guys give an example of something that the government declared to be a public good and thus stifled development by squashing the market?

Hint:
[Whatever you are going to say] isn't a public good.

OK, I agree.

By the way, I'm disappointed that you didn't call my egghead theory stuff "dormroom bull****" when you were trying to make the practicality argument. I mean, it's wrong because you're still missing the point, but it's such an easy line.

Pollution regulation seems like a pretty good example. And then you have something like the roads, which is obviously not a public good since they are obviously excludable, but then the government generally treats them like public goods and builds them at communal expense and gives them away for free.

Roads and transportation. The great thing is, you're right, they aren't public goods.

The BBC?

OTA television broadcasts could have been innovative left in private hands.

What am I missing?