A lot of people want to make an argument in favor of government or in particular, in favor of taxation, on the basis of public goods. Public goods, you might recall, are non-rival, non-exclusive goods, the production of which benefits everyone, but since the benefits cannot be excluded, many people presume that such goods will be underprovided in a free market. Typically, what they mean is that these goods may be provided in a smaller quantity than they’d prefer.
For the casual reader, an example of public goods are parks and roads. Without resorting to a childish absurdum (i.e., but my garden is a public good for my neighbors…), we can see some problems with the public goods foundation, from the get-go. Private roads exist in probably every county in the Union. Private parks do exist: Ski resorts, private beaches, dog parks, etc. The largest trade artery between the U.S. and Canada is privately owned, maintained, secured, and operated, and has been for 80 years. All of these maintain some degree of exclusivity, and they are able to do so based on well-defined property rights. (I like to think in terms of Coase’s discussion of the Lighthouse Problem.)
Slightly more sophisticated cases are often made for insurability problems, like protection from forest fires, or neighborhood fire departments which have been privately provided in the past, by people even dumber and less technologically-equipped than we are, today. The plain fact of the matter is that survivor and life insurance programs under the guise of Social Insurance Programs, the forced subsidization of risk via taxation, actually encourages more risky behavior. It’s called moral hazard.
But the point of this post was not to belittle the public goods argument on economic grounds, although for what it’s worth, I’m not convinced that the argument holds much water. Even if we grant that certain goods are non-rival and impossible to exclude, even if we accept the premise that these goods will be provided in suboptimal quantities if the market is left to fend for itself, we’ve still got one hell of an is-ought gap to bridge.
Assuming: Schools are public goods. Roads are public goods. Security is a public good. So what?
That a good happens to be “public” in nature says nothing about whether that good ought to be produced, or in what quantities it should be produced (if at all). The “public” nature of certain goods is not enough, in its own right to justify as a moral imperative, the taxes used to provide for their production, since, by virtue of the good’s “public”-ness, we can’t deduce that it must be provided, we cannot justify taxing people in order to provide these goods on account of their “public”-ness.
The proper response to the public goods argument is: So what?
