Why aren’t we talking about public goods? A proposed research agenda

May 12th, 2013

Published on Real-World Economics Review Blog RWER, by June Sekera, May 9, 2013.

Public goods pervade the lives of citizens in all advanced democracies.  Yet virtually no one talks about public goods: we rarely hear the term outside of economics classrooms.

In Samuelson’s sixty-year-old formulation, public goods are “non-rivalrous” and “non-excludable and are born of market failure.  In this market-fundamentalist world, public goods are inherently a “problem.”  

In the real world, public goods are what governments produce on behalf of their citizens. “The history of civilization,” writes Martin Wolf of the Financial Times, “is a history of public goods”. In the real world, public goods include clean air, clean water, street lights, emergency call service, disaster relief, food and drug safety, public parks and beaches, education, and dozens more, all of which citizens make use of every day and enjoy unthinkingly. Over 90 percent of U S citizens who deny ever receiving benefits from a  government program actually participated in one or more government programs (Social Security, college loans, the child care tax credit and the like), as admirably documented by Suzanne Mettler of Cornell in her research on “the submerged state”.

Awareness of public goods, and their utility and value, is sorely lacking in public discourse.  Instead, we hear about “free markets”, “free enterprise” and “free trade” and  are told that “government is the problem, not the solution,” or that “government should be run like a business”.  Such neoliberal vocabulary, derived from neoclassical economics, dominates public dialog and policy-making, suppresses the recognition of the ubiquity and value of public goods, undermines effective governance and ultimately reduces the supply of public goods.

Public goods are produced in a non-market environment, an environment inadequately addressed by mainstream economics. In the neoclassical model there is essentially no vocabulary for talking about the production of public goods, no theory of effective or efficient non-market production.

We need to revive and reframe the concept of public goods.  This issue is not merely rhetorical. A concept of public goods is immensely important.

The absence of a widely-held, constructive idea of public goods in public discourse denies citizens the ability to have an informed conversation, or to make informed decisions, about things that matter mightily to the quality of their lives and their communities.

Its absence robs public policy makers, leaders and managers of the concept that is most central to their reason for being.

In the real world, public goods derive from collective choice. Yet we lack a coherent theory of collective demand (consider Stewart Ranson and John Stewart, “Citizenship and Government: The Challenge for Management in the Public Domain”, 1989).  We lack as well a theory of the management of rationing, although in the real world of non-market production, services are “rationed according to criteria of need rather than supplied according to demand.”

Pluralist and progressive economists are beginning to shed light on the damage that has been done by neoclassical economics and neoliberal dogmas.  But I have yet to discover anyone who is specifically and directly challenging the Samuelson definition of public goods (except libertarians who contend that it opens the door for too much government). The usual approach is to invent another category, such as “collective goods”, “club goods”, and so forth.

I have initiated a project to develop a progressive and “instrumental” definition of public goods because the prevailing neoclassical definition is at once dismissive of non-market production and of public governance.

This project has grown out of my 25+ years of work in leadership and management positions in agencies at all levels of U.S. government (federal, state, and local) as well as my training in economics and public management at Harvard and MIT.  Over the years, I gradually developed an understanding and practice of “non-market production” in the public domain.  But the lack of a theoretical grounding is a major hindrance to establishing and promoting a more effective and efficient practice of governance … //

… (full text and comments).

Links:

Who Owns Gender? on Trouble and Strife, by Delilah Campbell, May 9, 2013: reflections on the deeper meaning of recent conflicts between feminists and transgender activists;

Guardian Sustainable Business Awards honouring blacklist company, on Socialist Unity, by Andy Newman, May 9, 2013;

North London Rally for the People’s Assembly Against Austerity, on Socialist Unity, by SU Editorial Team, May 9, 2013;

Margaret Thatcher, Then and Now, on Trouble and Strife, by Emma Wallace, April 27, 2013.

Comments are closed.