He wrote a long response in the comments that is so off-base to what I am saying it just doesn't fucking make any sense at all to me. He seems to be assuming government involvement as a function of these definitions, but still doesn't make sense. Alan, please read this carefully.
Again, from an economic perspective, public goods are non-excludable by their nature, not by political or legal decisions. I will address politics and legality later, so please stay with me.
The examples I have used are national defense and flood protection, and you offer counter-examples to try and disprove them that have nothing to do with it.
"we can, say, provide flood protection for some areas along the Mississippi River and not others"
This is not the issue. If we limit it to my discussion of a single valley, then you have a better idea of the factors at play. Farmers in the same valley all have an incentive to build a dam. However, they all know that the others have the same incentive to build the same dam. So, they wait for somebody else to build it, i.e. free ride. The next valley is irrelevant to them. Their farms aren't in the next valley. The farmers in the next valley have the same factors amongst themselves.
It's similar for the Mississippi. The City of St. Louis probably has the same factors in flood protection, assuming a geographic similarity throughout the city, but whether New Orleans builds it is isn't really relevant to citizens of St. Louis. And people in New York could care less about the whole thing.
I realize that New Yorkers might have to pay to help clean up after floods through tax dollars, so they should or could care. Or that they should care for moral reasons, but again let's leave those aside for now. Strictly speaking, absent government involvement, New Yorkers don't give a shit and St. Louis cares about it's own flood protection, but not New Orleans'. This is the fundamental nature of the problem absent moral or political considerations or national flood policy.
"we can leave parts of our coast unguarded"
This is, quite frankly, a stupid rebuttal. Modern national defense is not about the equal geographic distribution of military forces. We learned that from the Maginot Line. We leave our border with Canada largely unguarded not because we won't defend it, but because we don't have to. But this is getting off the point.
The point here is that when the US Navy buys another aircraft carrier or the Air Force another jet or the Army trains another soldier every citizen benefits, and furthermore each benefits more or less equally from that protection. But most importantly, we can't exclude people from benefiting.
Health care and education, which many people call public goods, are not public goods in the economic sense. You can not educate a specific child or not treat a specific person. Granted, society benefits when people are educated and healthy. Therefore, it is a private good with positive externalities.
Alan contended that health care ought not be excludable, presumably for moral reasons, and therefore it should be considered a public good. This is a common mistake.
Even if we decide through the political process that health care is a right and that nobody should be denied, that doesn't change the fundamental nature of health care as a private good with positive externalities.
First, the person who gets a triple bipass benefits far more than anybody else. Yes, we all benefit from that person returning to work and being part of society rather than dying, but nobody can deny that the recipient benefits far more.
Second, paying for that one triple bipass doesn't give us all a triple bipass.
Same thing applies to vaccinations, an example Alan mentioned, if the vaccination is safe and effective, then the person receiving it benefits the most because they are immune to the disease. We as society benefit because they won't pass it along, but that is a positive externality, not a public good.
This is in stark contrast to the purchase of an aircraft carrier or dam for a valley prone to flooding. The benefits go to everybody more or less equally and it is physically, not just morally or legally, impossible to exclude anybody.
So, let's say that we make it morally or legally impossible to exclude people from health care, as Alan argues, then does health care become public good in the economic sense? No. If it did, then there would be zero concern about rationing.
Even if we say that health care is a right, both politically and legally, it is still possible that the government refuses to pay for a pacemaker for somebody in their 100s or 90s because of the cost. It is still possible to exclude people because politics and laws can change and nobody, even the Democrats, is arguing that we are going to offer all the health care everybody wants to consume regardless of cost. Some procedures will be excluded.
Now, there's a whole thing about how the populace can protect their right to health care through lobbying and activism or whatever, but a political or legal guarantee does not change the fundamental nature of health care as a good or service.
One does not just buy "health care" and it magically applies to the whole relevant populace equally. Specific procedures are provided to specific individuals, and it is entirely possible that those procedures be denied to specific individuals for certain reasons. This is impossible with a public good. Again, I'm talking about the economic definition.
"although my reading last night noted that air is not a good example as it is not sold--fireworks displays were offered)"
Clean air is what I should have written. Or fighting global warming would be another one. If I want to fight global warming or clean up the air, and pay for it I cannot exclude you from the benefits.
It is common that people refer to private goods with positive externalities, again like health care and education, as public goods. But this is not the case in an economic sense. It is possible to exclude people from the good. No amount of political or legal protections change the fundamental nature of the underlying good.
Just because something isn't a public good in the economic sense does not mean it isn't good for the public.
Friday, August 21, 2009
Subscribe to:
Post Comments (Atom)

0 comments:
Post a Comment