Public goods: An ideal concept

Abstract

I see the concept of ‘a public good’ as an ideal concept defined by a pair of related characteristics: an opportunity for gain for a collectivity because of nonrivalness in consumption, where the opportunity for gain is difficult to finance because of the nonexclusion possibility. Even at that ideal level, it is impossible to present a solution able to fully realize the opportunity for gain. Given the difficulty of finding a satisfactory solution even at the ideal level, it would be surprising if an analysis of concrete instantiations of public goods would be simple. I will show that economists use at least thirteen concepts to point to economic problems related to public goods. This is more than opponents of the concept ‘public good,’ Malkin and Wildavsky, accuse the economic profession of using. I will reject the conclusion of Malkin and Wildavsky that the concept of a public good is a social construct and thus a purely culturally relative concept. I will concede, nevertheless, that in trying to realize some of the gains presented by goods having public goods aspects, social and cultural preferences play an important role. My conclusion, which justifies the ideal concept ‘public good’, implies that there is potentially a legitimate governmental role in dealing with public goods. Recognizing the socio-political dimension of economics means that one recognizes that the economic reality is complex. It does not justify, however, scepticism about concepts.