Losing and Gaining Public Goods


K.Sabeel Rahman in Boston Review:

The clash over health care is the most glaring example of a more widespread battle over the meaning and importance of public goods: what they are, how they ought to be provided—and to whom. The question of whether to privatize and deregulate, or to restore—and even expand—public provision is at the heart of many contemporary political, economic, and moral debates. At the federal level, the question over public provision manifests in disputes over privatizing education or slashing funds for affordable housing. On a more local level, the poisonous water of Flint, Michigan, exemplifies the toll of the larger trend of budget-cutting and privatizing vital public services.

In economic terms, public goods are defined as being nonrivalrous and nonexcludable—meaning that one person’s consumption does not preclude another’s, and that it is difficult (or impossible) to prevent people from consuming the good without paying for it. Classic examples are light and air. A second, more conventional understanding of public goods focuses on the economics of production. Goods that have high sunk costs and increasing returns to scale are likely to be underprovided by ordinary market competition. Think cable TV and landlines: the massive expense involved in laying down wiring on a national scale discourages private investment, but the benefits of a national network increase as the network grows. These conventional public goods are therefore seen as a proper domain for governmental provision.

But the battles over health care, education, and other goods underway today express a very different view of public goods, one grounded not in economic terms of efficiency and production, but rather in moral and political concepts.

More here. Also see responses from Jacob Levy, Joshua Cohen, Lauren Jacobs and others.