4
$\begingroup$

Common goods, (not public) are so because they are non-excludable and rival. Often this reflects the impracticality of excluding some users, rather than an absolute impossibility. For example, a park is public because it's impractical to be charging everybody that derives a benefit from using it. However, if it becomes easy to track who uses the park, for how long, who looks at the parks, etc. then the park could be financed privately!

Gadgets that track people's use of different goods could change which ones we deem to be excludable and which ones non-excludable....

A basic example is toll roads. If we mount GPS's on all cars and figure out how much tim they spend on the road, we could charge people for their use of streets directly. No more publicly financed road construction!

$\endgroup$
  • 1
    $\begingroup$ Making it excludable would make it a club good not a private good. $\endgroup$ – HRSE May 2 '16 at 1:54
  • $\begingroup$ The normal definition of a public good is one which is both non-rival and non-excludable. $\endgroup$ – Adam Bailey May 2 '16 at 12:03
  • $\begingroup$ Thank you for the correction. I'll correct the question to reflect this. $\endgroup$ – Fix.B. May 2 '16 at 14:20
2
$\begingroup$

Many obstacles to converting common goods into private goods are legal or normative rather than technological. For example, the technology necessary for congestion pricing of traffic is long established and indeed in use since the 1970's in Singapore. The existence of electronic transmitters or plate readers (London) may make for finer gradations of pricing and simpler administration but haven't made for widespread adoption. In fact, many notably congested larger cities like New York and Hong Kong have had failed congestion charge proposals. Or take a crowded national park. If ticket prices at Yellowstone were \$115 per person like Disney World instead of the nominal \$30 per car they actually charge it wouldn't be nearly as crowded. Prices are well below the market clearing rate as a matter of public policy, not because there is a technological obstacle to charging more.

$\endgroup$
0
$\begingroup$

A public good by definition is non excludable and does not create conflict among consumers. Nowhere it says that public good is always provided by government. It is the characteristic of the good itself not the provider. In your example of the park setting, one can actually exclude people, however, one still cannot exclude people from the positive externalities of the park.

Same way, think of highways. They appear to be public good but think of the toll booths. These highways may be operated and maintained under a public private partnership and those private or public players may collect toll from you. They are not public good in the pure sense. As mentioned in one comment they could be called club good.

National defense is one typical example of pure public good. You provide it to one individual and you end up providing it to all. Hence, it is provided by the government as government only has the unique authority to collect taxes for all such services. Now, even if you develop technologies to exclude people from national security you cannot achieve it. A private player cannot collect something like 'national security surcharge' and cannot throw citizens who don't pay it, out of the nation .

$\endgroup$
  • $\begingroup$ Thank you for the clarification. So, what is your answer to the question0 $\endgroup$ – Fix.B. May 2 '16 at 14:26
  • $\begingroup$ Thank you for your clarification. So what is your answer to the question? $\endgroup$ – Fix.B. May 2 '16 at 14:27
  • $\begingroup$ Yes. It can be financed privately and so can be many other goods. $\endgroup$ – Sub-Optimal May 2 '16 at 17:16
  • $\begingroup$ Yes, I know it can be financed privately. That´s what I state in the question. The question itself is whether we should expect most common goods in the economy to slowly become private goods or not. Which ones will become so? Which ones won't? What are the arguments to think that our ability to measure consumption will have a big impact on the nature of some goods? $\endgroup$ – Fix.B. May 2 '16 at 19:51
  • $\begingroup$ What I feel is what is to become private good practically does not depend only on the capability of measurement and hence exclusion but the structural framework also. Government will not allow any private player to collect 'tax' like payments. Suppose a private player develops a technology to measure the consumption of clean air. Now what ? Will it be allowed to own the air it produces and charge each citizen who consumes it and then take action against someone who refuses to pay. I will say that technology will make most goods capable of being private goods but I don't see that happening. $\endgroup$ – Sub-Optimal May 3 '16 at 5:46

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.