What is a Public Good?

Public Good arguments are often used by proponents of government intervention in the economy to justify their arguments.  They use it to justify government intervention in education, health care, utilities, the Internet, etc.  But these arguments do not hold up.  To know why, we must first discuss what exactly a public good is.

A public good is a good/service that is non-rival (one’s consumption doesn’t prevent someone else from consuming it) and non-excludable (one cannot prevent another from enjoying the resource).  Fireworks are the textbook example of a public good.  If a person shoots off fireworks, he cannot reasonably prevent people from watching them.  Likewise, each person’s ability to enjoy the firework show doesn’t inhibit anyone else’s ability to enjoy the show.  National defense is another example.

With public goods, one tends to get the free rider problem.  People can benefit from the good/service without paying (think, for example, a person who watches the fireworks show from his porch rather than buying a ticket to the field).  This can cause too few of the public good to be produced even if there is ample demand.  Government can step up to provide the good (and, in many cases, this is a legitimate function of government.  Police and national defense come readily to mind).

So, why don’t other things, like medical care or education fit this bill?  Simply because they are not public goods.  Medical care is both rival and excludable (one person’s “consumption” of a doctor’s time prevents another from consuming it) and excludable (a doctor can turn away patients).  Education is similar, although it is just excludable.

In conclusion, there may be other arguments for medical care and education to be supplied by government, but public good analysis isn’t one of them.

9 thoughts on “What is a Public Good?

  1. In conclusion, there may be other arguments for medical care and education to be supplied by government…

    Anything’s possible, I’m just not aware of any that don’t require theft.

    Thanks for this refresher, and your excellent discussion at the cafe. If a soup kitchen can be considered a public good, then ANY restaurant can be considered a public good, as they both feed hungry people. Both are rival and excludable, the only difference being the method and amount paid by the customer.

    If someone thinks soup kitchens don’t exclude, they might imagine stepping out of their chauffeur driven Bentley in their $4000 suit and $2000 shoes and getting in line for a free meal.

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  2. It is important to avoid the temptation to argue with bad guys you invent. The left aren’t Marxists. They want just a bit of coercion. It gets complicated when the good or service that is to be socialized or in this case whatever the past tense of fascism is…. is insurance. The part of Obamacare that’s coercive is the part that all of us have to buy insurance. No one can be a free loader when it comes to paying premiums.
    Obamacare patches up the unforeseen negative consequence to forcing private hospitals to take care of those that want to free load. Or in their eyes, can’t help but freeload.

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    • Obamacare patches up the unforeseen negative consequence to forcing private hospitals to take care of those that want to free load. Or in their eyes, can’t help but freeload.

      So this use of force is an attempt to compensate for a previous use of force that has negative consequences?

      Not sure why you think forcing a provider of a good or service to serve those who can’t pay would have *unforeseen* negative consequences. It’s easy to understand what would happen if restaurants were forced to feed those who couldn’t pay, or if clothing stores were forced to clothe those who couldn’t pay.

      Would your recommended solution be to force everyone to carry some type of food payment coverage or clothing insurance?

      Would you then be surprised it the cost of food and clothing skyrocketed?

      – Perhaps “To be fascisized” ?.-

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