The publicly bad concept of ‘Public Goods’

Daniel Pryor April 23, 2013 0

 

According to Investopedia, a public good can be defined as ‘a product that one individual can consume without reducing its availability to another individual and from which no one is excluded’.

You learn something new every day. So, with this in mind, which of the following can be fairly described as a public good?

a.) Street lighting
b.) National defence
c.) Lighthouses
d.) Roads

Okay, it’s a trick question. None of the above answers are correct. In fact, a leaf through the history books and some creative thinking shows that there is no such thing as a ‘public good’. From Nobel laureate Ronald Coase’s analysis of private lighthouses to Hans-Hermann Hoppe’s collection of essays on the myth of national defence, there is a considerable body of literature dedicated to dispelling the pernicious concept of public goods from the collective economic mindset.

In the opening few days of my A Level Economics course, we were introduced to this concept of goods and services that implicitly could not be provided in a free society. According to the various textbooks accompanying the syllabus, one of the reasons that the world requires statism is due to ‘market failure’: partly characterised by the underprovision of public goods in a purely free market economy.

Indeed, a rejection of the free market is explicitly stated in the title of the very first unit in Edexcel’s A Level Economics course: ‘Competitive Markets – How They Work and Why They Fail [my emphasis]’. From the outset, any student of the course is led to believe that free markets are irrevocably flawed. As they progress, the debate surrounding statism vs. libertarianism is incorrectly portrayed as a lacklustre ‘Clash of the Moderates’, with John Maynard Keynes in the red corner and Milton Friedman in the blue corner. Even when viewing the entirety of economics through this closeted and warped lens, Edexcel (intentionally or not) leans towards the Keynesian interpretation, centering a large proportion of the specification upon the flawed notion of aggregate demand. What little ‘controversy’ exists is over the shape of the Long Run Aggregate Supply Curve, instead of the fundamental basics of economics as a discipline! Why is it that respected alternative viewpoints ̶ Austrian School or Marxist ̶ are not included in any part of the specification?

It is not good enough to reply that A Levels aren’t detailed enough to give all sides of the story – least of all when that neglected side attracts support from a growing body of academics and politicians. Statist viewpoints may be held by the majority, but there is by no means a general consensus. Economics is not a static subject, and the debate rages on. For those students of economics who also harbour feelings of scepticism towards their exam board, I would recommend reading Robert Murphy’s excellent textbook ‘Lessons for the Young Economist’ (available to read online for free here).

To paraphrase the author and education activist John Taylor Gatto, the metaphor of ‘schooling’ reveals the true function of schools. The only other use of ‘schooling’ in the English language can be found when referring to fish. When one fish moves, thousands of other fish automatically follow. As a general rule; don’t be the fish that reacts to what the rest of the shoal is doing. The state of A Level economics education in the UK could just as easily be applied to a host of other subjects, and a healthy air of scepticism should be extended to those too. Question everything.

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