Do markets optimally provide public goods? Why or why not?
Do markets optimally provide public goods? Why or why not?
Answer:
A public good is basically defined as something the market does not provide. The best writer on why the state historically also often fails to provide them adequately is Galbraith, in "The Affluent Society", where the term "Private Affluence, Public Squalor" was coined.
markets don't optimally provide public goods, and indeed often don't provide them at all. If consumers need not pay for access to goods, there will be consumers who'll be "free riders" and let "someone else" pay for the provision. If suppliers aren't required to provide goods to all, they will "cherry-pick" their clientele, and provide only to the affluent, and let "someone else" try to provide to those who can't (or won't) pay. Regulation and legal mandate is required.
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Answer:
A public good is basically defined as something the market does not provide. The best writer on why the state historically also often fails to provide them adequately is Galbraith, in "The Affluent Society", where the term "Private Affluence, Public Squalor" was coined.
markets don't optimally provide public goods, and indeed often don't provide them at all. If consumers need not pay for access to goods, there will be consumers who'll be "free riders" and let "someone else" pay for the provision. If suppliers aren't required to provide goods to all, they will "cherry-pick" their clientele, and provide only to the affluent, and let "someone else" try to provide to those who can't (or won't) pay. Regulation and legal mandate is required.
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