Public Goods: a definition

IMG_20180703_020406.jpgIt seems like there could be a lot more constructive conversation around town if we at least got everyone on the same page as to what exactly constitutes a public good.

Let’s start with what public goods are not:

They are not tied exclusively to government provision as many private parties and non-profits make goods available to those in need (pro bono legal work or food shelves) and people in general (Rockefeller Libraries). They are not non-excludable — in fact we have managed to cultivate ugly, unshakable sentiments around this issue, as certain groups were very much excluded from these non-excludables. And the use of public goods by some, very much affects the ability of others to gain access, no matter the deep and genuine wish to disbelieve this constraint and live in an ideal world; the reality of limited resources rules in all economic realms.

Also public goods are not necessarily the outcome of some difficult moral struggle.  A  community decision to provide a bridge spanning a river, more than likely came about out of sheer practicality.  From 1847-1869 the crossing of the Mississippi above the St. Anthony Falls was provided by a business man, Mr. Steele, and eventually the Mississippi Bridge Company.  From ferrying across the first setters to constructing a bridge for which there was a toll, the crossing was a fee for service venture.  Eventually the county bought out the charter in order to serve the rising populations on each of its shores.

In fact, public goods are just as easily commercial goods. They differ notably because a group has decided to collaborate and offer them with no pecuniary transaction costs.  For the purposes of measuring, tracking, producing and comparing, we need to think of these goods as any that are produced in commerce, except, that they are given freely to be consumed by a designated group. The scope, designation or classification of this body is vital for understanding the capacity and intent of social commerce. For this reason, the definition of a public good is but a frivolity unless it is accompanied by an understanding of group membership.

Take for instance the present immigration dilemma.  One voice, A, in the public square argues to receive any individual who arrives at our borders and provide them with access to all the public services that US citizens enjoy. Their ‘public’ group is far larger and encompassing than the one envisioned by an opposing voice, B, who is fearful that our wealth is not great enough to provide public education, public housing, medical coverage, law enforcement, and so on to all those who crowd into A’s vision.  This is a result of the most fundamental fact that public goods are funded on specified budgets, and individuals using the services do in fact consume and exhaust them.

The first voice is correct by the academically accepted definition: collective consumption goods are ‘goods that are non-rival and non-excludable.’ Americans believes in public education for all. So, the logic goes, there simply must be a way to make it all work.  The second voice is right by pragmatics. Perhaps having sat on a school board she has grown into the actuality that budgeting additional enrichment for one set of kids does take away from the instruction of others. And having faced this difficult task of trade-offs, may get a little edgy at voice A’s expansion of the group.

There are other aspects to the production of public goods unique and different from commercial goods, that do affect the capacity of a neighborhood- like volunteers within the community coming in and reading with the kids or local businesses donating laptops and computer services to bulk up technology in the classroom. But as can be imagined these opportunities vary greatly from a farming community in southern Minnesota, to the border town of Brownsville Texas to a rejuvenating Detroit. And for that reason, further conversation about the assimilation of refugee immigrants is dependent upon securing a more specific designation of the receiving public, and an appreciation of their typical public services.

Know thy group.  Define thy group. It will save some ill will.

As part of the Hoi Polloi, I’d find it useful to advance this conversation. I hope others do as well. If we all take a run at the ideas with sharp needling objections, who knows what we could sculpt into being- perhaps a beautiful and intricately detailed pièce de résistance.

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