Public Goods Theory

In General

Ideology Is Infrastructure
by Will Wilkinson
"At bottom of both well-functioning markets and states are norms of behavior that dispose people to cooperate, to keep agreements, and to recognize and respect claims to property and a certain degree of personal autonomy. These norms are the ultimate public goods, and constitute the moral infrastructure of society. The moral infrastructure, and the system of norms it comprises, is largely a consequence of systems of widely shared belief. To this extent, ideology is infrastructure. A community that shares the belief that property is morally illegitimate, that profit is odious, that the state is primarily a mechanism for conferring special benefits on whatever tribe can dominate it, or that some groups but not others have legitimate claims to peace and prosperity cannot sustain a moral infrastructure -- in which case other questions about public goods are moot."

The Tragedy of the Commons
June 12, 1994
by David J. Theroux
"Those close to the land—whether in a commercial sense or even in terms of a cause—are far better stewards than bureaucrats, whose management of the “commons” ensures abuse since they possess few incentives to protect the land. Since their revenues are extracted from the citizenry by the force of taxation, bureaucratic managers have no way of telling whether they administrate resources in ways beneficial to the public or not."

Free Riders

The Common Good And The Free Rider
by Mack Tanner
"Even the most committed supporters of the democratic welfare state are beginning to recognize that something has gone wrong, that the money that was supposed to take care of the poor, the sick, the unemployed, and the helpless is instead being sopped up by politicians, government employees, the most successful farmers, the rich businessmen who are protected by subsidies and tariffs, much of the legal profession, and the well-fixed retired."

Free Riders and Collective Action Revisited
by Richard L. Stroup
"The imperfections of government are increasingly recognized across the political spectrum, but seldom are they explicitly traced to the problem of “free riders.” Yet the free-rider problem is inherent in all politically directed activity, as can be seen from a fresh look at the classic cases of public goods provided by government."

Suckers, Free Riders, and Public Goods
by Robert Sugden
A review of Anthony de Jasay's Social Contract, Free Ride.

Justification of Government

Can the State Improve a Hobbesian World?
by Edward Stringham
"Perhaps the Hobbesian dilemma is a real threat. Whatever the case may be, government does not seem to offer a solution. Either Leviathan is part of the problem or Leviathan is superfluous. Under either scenario, anarchy might be the best choice after all."

How would anarchists handle the "public goods" problem?
by Bryan Caplan

Public Goods and the Justification for the State
by Dan Garrett
A review of David Schmidt's The Limits of Government: An Essay on the Public Goods Argument.

Public Goods Fallacies: False Justifications for Government
by Francois-Rene Rideau
This article exposes economic and moral fallacies used to justify state intervention in the market.

The Stateless Society: An Examination of Alternatives
by Stephan Molyneux
This article deals with the allegations that the state in necessary to (1) settle disputes, (2) provide public goods, and (3) fight pollution.

Land Use

Beyond the Wit of Man to Force: Voluntaryism and Land Use Controls
by Carl Watner
A history of zoning and land-use controls in the USA. "In a free society, land use controls and building codes would exist under the framework of private covenants and insurance company standards (to be met as a precondition to obtaining insurance coverage)."

Externalities, Conflict, and Offshore Lands: Resolution Through the Institutions of Private Property
by John Brätland
"Oil leaks and spills are the most visible externality associated with offshore development, but public policy must also take into account another type of negative externality: cost-shifting through the political process (such as when environmentalists successfully lobby to ban offshore oil drilling). Fortunately, both environmental and political externalities can be resolved through the often-neglected institution of private-property rights."

Law, Courts, and Police

Anarchism and the Public Goods Issue: Law, Courts, and the Police
by David Osterfeld

Fallacies of Public Goods Theory and the Production of Security
by Hans-Hermann Hoppe

Networks, Anarcho-Capitalism, and the Paradox of Cooperation
by Bryan Caplan and Edward Stringham
This paper provides reasons to believe that a cartel of free-market defense firms would not be likely to form or undermine an anarcho-capitalist society.

Market Failure

The Failure of Market Failure: Part I. The Problem of Contract Enforcement, Part II. The Public Goods Dilemma
by Anthony de Jasay
"In this two-part essay, I claim that at least some, if not the whole, of the market failure argument fails to prove its case. In Part I, I look at the problem of contract enforcement and in Part II at the provision of public goods. There have been other writings using related arguments to the same effect, but one more such will not be too many."

The Limits of Market Organization edited by Richard R. Nelson
reviewed by Robert Murphy
"Besides the monotony of the content, the book has a more frustrating feature—namely, the antiseptic euphemisms used for policy recommendations. Just as one who reads large excerpts from the Pentagon Papers might find himself being sucked into the worldview of the war planners, so too does the reader of this book find himself numbed by the very language used by Nelson’s contributors. Needless to say, no one ever explicitly suggests that men with guns take certain amounts of money away from citizens and spend that money. Rather, we are treated to pleas for “public responsibility” and “government investment.” After reading chapter after chapter of such claims, they sound more and more reasonable and indeed moderate."

The Theory Of Market Failure Edited by Tyler Cowen
reviewed by Jeffrey A. Tucker
"As a caveat, most of the contributors to this volume are neo-classical economists and therefore assume the postulates of “perfect competition” and utility scales that are interpersonally measurable, both of which are untenable in a world of action. For a more fundamental critique of market failure, one that takes into account the insights of subjectivism, readers must look toward economists writing within the tradition of Austrian economics.
Cowen’s volume is nonetheless an outstanding research tool. Many economists will continue attempting to justify government intervention by pointing to “market failures.” But this collection puts them on the defensive. Their claims will not be regarded as self-evidently true, as they were only a few years ago."

Why Market Failure Fails
by Michael S. Rozeff
"There is a logical standard for the proper amount of government interference. That standard is none, no interference whatsoever."

National Defense

Is Cybersecurity a Public Good? Evidence from the Financial Services Industry
March 14, 2005
by Benjamin Powell
"This paper examines the economics of cybersecurity. The economics of externalities, public goods, market failure, and government failure are all explored as they relate to cybersecurity. The financial services industry is clearly an area of critical infrastructure in our economy. This industry provides a case study to examine whether the market is providing the efficient level of cybersecurity or whether government intervention is required."

Privateering and National Defense: Naval Warfare for Private Profit
by Larry J. Sechrest
"Almost all economists declare that national defense is a “public good” that will be provided in sub-optimal quantities—or not provided at all—by private, profit-seeking firms. The purpose of this paper is to challenge just that sort of statement. The attack on national defense as a public good which must be provided by the state will be two-pronged. One part, the briefer of the two, will raise theoretical questions about public goods in general and national defense in particular. The second part will be devoted to a detailed survey of privateering, a form of naval warfare conducted by privately-owned ships which lasted from the twelfth century to the nineteenth century. What privateers were, how they operated, the legal customs that grew up around them, how effective they were, how profitable they were, and why they disappeared will all be addressed. The common employment of privateers during wartime will be offered as empirical evidence that defense need not be monopolized by the state."

Private Provision of Public Goods: Theoretical Issues and Some Examples from Maritime History
by Larry J. Sechrest

Public Goods and Private Solutions in Maritime History
by Larry J. Sechrest

Roads

Public Goods and Externalities: The Case of Roads
by Walter Block

A Short History of Highway and Vehicle Regulations
by Carl Watner
"The development of the automobile, in contrast to the history of the socialized roads upon which it runs, was largely a free market phenomenon.

Social Services

The 'Public Good' Rationale For the Welfare State: A Critique
by Nicholas Elliott

Public Goods and Private Communities: The Market Provision of Social Services by Fred Foldvary
reviewed by Roy E. Cordato
"Fred Foldvary has made a valuable contribution to the economic literature on public goods and public finance. If it is fully appreciated by the economics profession it could revolutionize and dramatically improve the study of urban economics specifically and public economics in general. Unfortunately it is not in the interest of individual economists to buck the system as it currently exists. In this sense maybe Dr. Foldvary's book, itself, should be the subject of some public goods analysis."

(to the LNF Home Page)

Back to the list of topics
This page was last updated on May 3, 2007.