Hey Folks,Curious if you have any examples of "Public Goods" provided by Private Enterprise. By this, I mean a good or service that is funded and managed privately, but available to the public for free. Public access, private ownership.Examples I can think of is a parking lot at a mall, or the Getty Musuem in Los Angeles.I am mainly trying to cite examples against this claim:"Although the external benefits of a public good are often very significant, consumers realize that they are able to access the goods for free and thus, there is little market demand for the goods and services. Again, this is an example where the free-rider issue impacts the profitability of public goods in a market economy. Since there is little market demand but the services are often required, we typically see government subsidies for public goods in market economies."Thanks,VS
I think that you're taking the wrong approach. The question should be, if consumers were not able to access the goods for free, would there be any market demand? Would this demand be sufficient to provide opportunities to profit by serving it? If so, then the private market could supply these goods or services. If not, then the cost to the good or service is not justified.
Interesting approach.
Do you have any concrete examples of goods which would fall into such category?
Anecdotal: There are plenty of apartment complexes here in South Korea with large lavish playgrounds (the kind that aren't allowed in the US because of liability) and gardens. The idea is that these contracting companies come in, buy up land, build a couple or more apartment high-rises and keep a large wooded area with a park/walkways/drinking fountains/statues/etc because it attracts significantly more renters willing to pay a little more to live there rather than in a building that doesn't have this. The public is not by any means restricted in having access to these parks/playgrounds/walkways btw, and they are very well maintained.
Somebody might say: yes but the public gets to enjoy it for free. But this is advertising, brings up the prestige (or other psychic benefits) of people living there, and raises the real estate value of the area. So even though some of the public is free-riding this, the benefits are clearly sufficiently high that the practice is continued.
Off the top of my head ... perfume and cologne-
People buy them exclusively for the positive externalities they provide.
If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH
UPS?
private bus transportation (charter bus), cars dat u can drive urself
the state provides pubic transportation, but the why do most americans own cars that they can drive themselves? if public transportation is so essential, then why do most people buy cars?
because iits for the poor.
If the poor didnt get taxed for their public transportation, then they would have money to buy tickets for private transportation or even their own car.
cleaning services (maids)
“Since people are concerned that ‘X’ will not be provided, ‘X’ will naturally be provided by those who are concerned by its absence.""The sweetest of minds can harbor the harshest of men.”
http://voluntaryistreader.wordpress.org
I literally just heard Tom Woods mention deoderant as something that could be classified as a "public good" on the Peter Schiff show a few hours ago. (It was the April 10 episode, though.)
Are those "public goods" in the sense of nonexcludability/nonrivalry?
I got it from Hoppe, but, yeah, it's a good example. Hoppe's essay on public goods is pretty devastating to the public goods argument. What's telling is the inconsistancy between economists on what is a public (as opinions differ from good to good from economist to economist) good. Ultimately, Menger comes to mind regarding the value of goods and how they don't have "intrinsic" values. In that respect, economists who make the public goods argument are grappling with a fallacy that was shattered -or so we thought- by Menger (perhaps Cantillon, but Menger's arguments are more obvious) in the 19th century. However, in the same vein (if I'm interpreting the argument correctly), how can one distinguish what is a consumption/capital/inferior/normal good as an economist?
ThatOldGuy:Ultimately, Menger comes to mind regarding the value of goods and how they don't have "intrinsic" values. In that respect, economists who make the public goods argument are grappling with a fallacy that was shattered -or so we thought- by Menger (perhaps Cantillon, but Menger's arguments are more obvious) in the 19th century.
Sounds like somebody's been boning up on their history of economic thought.
Just as a nice link reference in case anyone missed it, there was a great TED talk posted in the low content thread related to this.
However, in the same vein (if I'm interpreting the argument correctly), how can one distinguish what is a consumption/capital/inferior/normal good as an economist?
Maybe I'm misreading this, but I don't think those terms operate in the same framing. Calling something a "public good" means to differentiate it from other goods in terms of the nature of the good itself. It is in this framework that the attempt is made to treat these goods differently from others. Terms like "consumption" "capital" and the like are only meant to imply and give a name for goods that are utilized in a certain way. In other words, "public good" is a term given to goods that implies how they should be treated...whereas terms like "consumption good" are simply descriptive terms that can only really apply after the good is used...because of course, it is on the good owner himself to determine why it is we wants the good (i.e. what exactly he wants it for). For most people, a wrench is a capital good...something used to make other goods. But I know a couple of guys who have wrench collections...as in, entire sections of a wall that are simply used to display antique wrenches like artwork.
John James:Sounds like somebody's been boning up on their history of economic thought.
John James:Maybe I'm misreading this, but I don't think those terms operate in the same framing. Calling something a "public good" means to differentiate it from other goods in terms of the nature of the good itself. It is in this framework that the attempt is made to treat these goods differently from others. Terms like "consumption" "capital" and the like are only meant to imply and give a name for goods that are utilized in a certain way. And of course, it is on the good owner himself to determine why it is we wants the good (i.e. what exactly he wants it for).
No, you read right. That's somewhat what I was thinking- regarding your argument then, the dichotomy as to what constitutes a inferior/normal good (this is what I thought) is ill-founded because it is subjective (mainstream econ argues that an inferior good is a good that is consumed less when one's income rises; when one consumes a good in greater abundance after a rise in income it is a normal good)?
ThatOldGuy:No, you read right. That's somewhat what I was thinking- regarding your argument then, the dichotomy as to what constitutes a inferior/normal good (this is what I thought) is ill-founded because it is subjective (mainstream econ argues that an inferior good is a good that is consumed less when one's income rises; when one consumes a good in greater abundance after a rise in income it is a normal good)?
In a way. I think a poster "Len Budney" captures it quite well here.
Len Budney: You're right, though, that there's no such thing as undemonstrated preference.
You're right, though, that there's no such thing as undemonstrated preference.
Awesome.
That's an old thread!