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Course: Wireless Philosophy > Unit 3
Lesson 2: Political- Political: Original Position
- Political: Race and the Carceral State
- Political: Race and Racist Institutions
- Political: Government and Marriage (Government's Role)
- Political: The Prisoner's Dilemma
- Political: Tragedy of the Commons
- Political: Collective Action Problems
- Political: What are Public Goods?
- Political: Government and Marriage (Minimal Marriage)
- Political: Government and Marriage (Friends with Legal Benefits)
- Political: Government and Marriage (Polyamory)
- Political: Government and Marriage (Just Care)
- Political: Why Vote? Reasons to Vote
- Political: Should We Have Children?
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Political: What are Public Goods?
In this video, Professor Jonathan Anomaly (Duke and UNC – Chapel Hill) discusses public goods, which are goods that are jointly consumed, so that they are available to everyone if they are available to anyone. Public goods often lead to unexploited gains from trade, and are frequently invoked to justify why we have a state to perform basic functions like defense, property adjudication, and the regulation of pollution.
Speaker: Dr. Jonathan Anomaly, Lecturer/Research Assistant Professor, Duke University and University of North Carolina at Chapel Hill.
Speaker: Dr. Jonathan Anomaly, Lecturer/Research Assistant Professor, Duke University and University of North Carolina at Chapel Hill.
Want to join the conversation?
- at4:45, the question was asked, if wi-fi is a public good, why is it privately provided?
i think it is because wifi as a product, per se, is easily made a private good: it is in essence excludable (in the sense that underlying any access by nonpaying consumers is the assumption that one has been given the right to access the service which can be revoked at low cost by the account owner), and therefore not really public in nature. This is even more the case if the wifi access is via a password which assumes that each individual user would need to know the password to access it, hence making it rival.
But more importantly, if the 'product' is conceptualised as 'a society which can access information easily via wifi', then this is a public good, as the fact that a society can access information easily is good for all society (nonrival) and does not incur cost to enjoy it (nonexcludable). If this is what society wants, its provision privately (as this product is implemented via wifi) represents an economic inefficiency.
Although this touches so far on whether wifi is a public good, I have not really answered the question of why public goods are provided privately.
Firstly, the answer is that it is perfectly acceptable for public goods to be PROVIDED privately. It happens all the time. This is because often a public good is disguised in or provided via a vehicle of a private good, and so incentivising the latter's production by private providers.
Take healthcare for instance.
If the good is a 'healthy society' the good is public. Everyone can enjoy the benefits of such a society (nonrival), and it does not cost to enjoy it (nonexcludable). Conceptualised in this way, it makes sense that public funds are then used to purchase *or* finance this product as private funds would not incentivise its production (why would drs and other providers provide healthcare if they are not paid?) .
But if the 'good' is conceptualised narrowly as healthcare per se, it can be viewed as a private good. Only one person can be treated by a particular provider at any one time (rival). Typically one needs to pay to access a healthcare service (excludable).
Hence the first conceptualisation of this good is provided via what is apparently a private good. One can readily observe that healthcare is provided by private providers quite commonly worldwide, even if the notion that a healthy society is a public good is commonly held in societies.
If you asked then why are public goods still FUNDED privately, then you can see that it is related to the extent that societies recognise and/or accepts whether a 'good' (healthy societies, for instance) really is a public good. If the society does not, then one can see how it easily translates that the payment of the private good (healthcare: that is the vehicle for the overarching public good), will mainly be provided by private funds (and so not being enough to purchase the wider public good of 'a healthy society').(2 votes)
Video transcript
(intro music) Hi! My name's Jonny Anomaly, and I teach
at Duke University and UNC Chapel Hill. Today, I'm going to talk
about public goods. Consider the following case. In representative governments around the
world, citizens are periodically called on to vote for parties or candidates. In large elections, many people choose
not to vote. But among those who do vote, each faces the choice of how much time
to spend gathering and processing information about the candidates. Since each person's vote is unlikely
to make a difference to the outcome of an election, and everyone knows this, there's little
benefit to voters of trying to overcome bias or increase general knowledge
about the relevant issues. The expected benefits of gathering and
processing information are diffuse, but the cost is concentrated on the individual who has forego other
way of spending his time. In other words, informed voting is a
public good in democratic societies. Goods are public when they
exhibit two properties: nonrivalry and nonexcludability. Nonrivalry exists when one person's
consumption of a good doesn't diminish other people's opportunities
for consumption, and nonexcludability exists when nobody can be excluded from consuming
a good once it is produced. Ordinary goods that we
purchase in a market are private, in the sense that once we own
them, we can do what please with them, within the limits of the law. For example, when i buy a surfboard, I could choose to ride it, keep
it stored in my closet, or sell it to the highest bidder. But since public goods are available
for everyone to consume, it is difficult to get people to
voluntarily provide them or conserve them once they've been provided. When I cast an informed
vote for a candidate, I make that candidate just a
tiny bit more likely to win, but the legislative consequences of the candidate's victory are
shared by all citizens and potentially people in other
countries and future generations. Because, for many people, it is
psychologically costly to invest energy engaging in serious research rather than
idle gossip about the candidates and issues at stake in an election, the public good of informed,
unbiased voters is undersupplied. They are two separate impediments to the
voluntary provision of public goods: the free rider problem and
the assurance problem. Free riders are people who
seek the benefits of a good, but who try to avoid paying for it. Other people face the assurance problem, which occurs when people are willing to
pay for a public good but are unsure that enough others will contribute
to make their effort worthwhile. one way to solve the assurance
problem is by introducing altruistic punishment, which occurs when people are permitted to
punish free riders. The prospect of altruistic punishment
can help increase contributions to public goods especially well for small
groups in which people can bear retribution for being identified
as a free rider. Assurance contracts are another way
of producing local public goods. Consider Kickstarter, an internet company
that allows people to contribute to an outcome that everybody in a group wants, but which doesn't collect contributions
until enough people donate to reach the threshold needed to fund the good. For example, we might use Kickstarter to
fund a tennis court at a park that many people in a neighborhood visit. Public goods that are global and
intergenerational, though, are much more difficult
to provide or preserve. Antibiotics are an example
of a powerful drug whose efficacy declines as their use increases, especially when they're used
at subtherapeutic doses or misused to treat infections that
they lack the power to cure. Preserving the power of antibiotics
to cure infections is a public good because effective antibiotics are a
nonrival, nonexcludable resource whose benefits spill across borders
and across generations. Assurance contracts are
useless for cases like this, because the transaction costs associated with bargaining between billions
of people are too high. So we need more subtle ways of preserving
public goods like antibiotics. One way to approach the problem is to
convert public goods into private goods by increasing the extent to which each consumer internalizes the benefits
and costs of using antibiotics. For example, someone suggested that user fees should be applied to the
consumption of antibiotics, with the revenue being used to fund
basic science research that will stimulate the development
of new vaccines, new kinds of antibiotics, and technology
for diagnosing infections. It is worth distinguishing a
related set of principles. The problems of producing public goods,
solving collective action problems, and avoiding commons tragedies
are often similar in structure, and many introductory textbooks diagram
all three problems as prisoner's dilemmas. But this isn't quite right. In a true prisoner's dilemma, the
non-cooperative action is always taken, since a prisoner's dilemma is defined
as a non-cooperative game with a unique Pareto dominated
Nash equilibrium. In other words, in a true
prisoner's dilemma, cooperation is never
the rational move. But in public goods games, rational
people often contribute. I want to end with a question: if wifi is a public good, why is
it being privately provided? Subtitles by the Amara.org community