Public Goods
This is a nice point from Mark Kleiman, something he allegedly gleaned from a Tom Friedman column:
But there is an important insight hidden in Friedman’s breathless prose: you can’t much improve the quality of life of currently prosperous Americans (let’s say, folks above twice the median family income where they live) by giving them more of the things that money can buy. A safe neighborhood, walkable cities, fast, comfortable inter-city transport, excellent public schools and universities, scientific discovery, medical progress, clean air to breathe, an economy that is sustainable into the lives of one’s children and grandchildren, a vibrant high culture: these are primarily public goods, and need public expenditure to bring them about.
At the same time, we have reason to believe that in an affluent society such as ours a lot of the problems that people at the bottom suffer from have a lot to do with relative rather than absolute deprivation. In other words, a reduction in the volume of wealth in the hands of the wealthiest aimed at increasing the quantity and quality of public goods could make very wide swathes of the public better off.
35 Responses to “Public Goods”
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December 26th, 2008 at 1:32 pm
I don’t know–buying the lower classes off with access to comparatively-cheap consumer goods has worked pretty well for the last twenty-eight years. No reason to imagine it won’t continue to work for the foreseeable future.
December 26th, 2008 at 1:48 pm
Great post. Yay public goods!!
December 26th, 2008 at 2:02 pm
we have reason to believe that in an affluent society such as ours a lot of the problems that people at the bottom suffer from have a lot to do with relative rather than absolute deprivation.
Can you go into more detail on what you mean by this? Which problems of the unaffluent are primarily relative?
December 26th, 2008 at 2:08 pm
I second Noah.
You can visit the richest citizens of any number of third world countries to get a sense of what things are like when people have lots of personal wealth but enjoy the benefit of no public goods.
December 26th, 2008 at 2:48 pm
The public good is about to be globally redefined as the greater good.
All of the 20th century economic paradigms collapse without the perception of cheap energy going forward and the acceptance of the externalized costs of business by the public sector. The former isn’t possible without the latter and the public sector cannot subsidize short sighted and environmentally devastating behavior any longer.
December 26th, 2008 at 2:54 pm
Can you go into more detail on what you mean by this? Which problems of the unaffluent are primarily relative?
Well, for myself, I would say something like the cost of cell phones, or clothing. Luxury items are primarily markers of status, and to those trying to escape poverty will often attempt to do so via superficial as well as substantive means. So a lot of money that could be spent on essential goods winds up going to items designed to hide one’s poverty.
In the context of Matt’s post, let’s talk about something like cars. If you live someplace like LA, you need a car. But no one wants to drive a beater, so a lot of money goes to leases you can’t afford, stereo systems and rims to dress up your middling ride, etc. By contrast, if you live in NYC, you can ride the subway, and forgo car ownership without stigma.
A public good which allows the rich and poor to benefit equally helps reduce not only the material, but mental burdens of poverty.
And, if you look at studies of urban poverty, historically speaking poverty’s only become generationally endemic when the rich stratify away from the poor. When you take steps to ensure economic diversity, especially on a geographical level, a lot of goods the rich possess (clean, safe neighborhoods; access to banks and grocery stores) get shared across the socioeconmic spectrum.
December 26th, 2008 at 3:18 pm
A safe neighborhood, walkable cities, excellent public schools and universities, and a vibrant high culture are cheap depending on who lives in the neighborhood and attends the school. Scientific discovery and medical progress are primarily made and funded by the private sector (Tang and teflon notwithstanding). Clean air to breathe is the product of incentives and taxes, not spending. That leaves inter-city transport, which does depend on public spending, there being no demand otherwise.
December 26th, 2008 at 3:25 pm
Mainstreet: Hellz yeah!
I can just feel the new liberal economic philosophy coalescing around the idea of public goods. Which is awesome. I wonder if we’ll point to Krugman as the guy who started the movement…which to some degree he was, but it was also just a bunch of people reading their Econ 101 textbooks and saying “Hey, wait a minute…”
December 26th, 2008 at 3:32 pm
Riiiiiiight. Funding sources like the NSF, NIST, DARPA, etc funnel plenty of public money to those private interests. That’s the “privatize the profits” part of the equation.
December 26th, 2008 at 3:42 pm
NIST and NSF budgets total $7 billion. DARPA is defense and doesn’t count. Microsoft spends about that much per year on R&D. NIH spends $28 billion per year, which is considerable, but total biomedical research is over $100 billion.
December 26th, 2008 at 3:49 pm
I second TW’s question. Maybe I’m just forgetting when and where this was proved, but it’s a pretty bold thing to say without explanation. I think this was why the hyperlink was created.
December 26th, 2008 at 3:57 pm
DARPA is defense and doesn’t count.
This is a stunningly ignorant claim when it comes to talk about who funds our research and development projects in this country.
Public research spending is the backbone of our basic research and — beyond that — the backbone of the training and education of future researchers. To claim that research is primarily a privately-funded venture in this country is an astoundingly ignorant claim.
In any case, where do you think the money to fund the research about the dangers of dirty air and methods of cleaning it up come from? Cripes.
Granted, this is only tangentially related to MattY’s point– that improving the lives of the poor is going to come from public investment in infrastructure and public health measures rather than the hope that “more stuff” via cheap important will close the gap between rich and poor — but at a certain point we have to correct the massive misperceptions of people like bjk.
December 26th, 2008 at 4:01 pm
but at a certain point we have to correct the massive misperceptions of people like bjk.
Well, actually, for the next 24 months…we don’t.
December 26th, 2008 at 4:13 pm
Defense spending will go ahead regardless of it’s indirect benefits. So the indirect benefits of defense research are not an argument for non-defense research funding.
“In any case, where do you think the money to fund the research about the dangers of dirty air and methods of cleaning it up come from? Cripes.”
Well, spending on the methods to clean up the air come from the energy producers that clean up their effluence every day. Ultimately of course it comes from the consumers of energy. The innovations in solar power aren’t coming from DOE, that’s for sure.
December 26th, 2008 at 4:20 pm
The people at the bottom suffer from a lack of affordable health care and existential dread of homelessness and joblessness. The holiday sales figures have made it clear that the cheap goods mean very little to people right now.
On a tangent—the thing about those cheap goods is that you often have to buy them again if you want something that works. And when you can’t repair things, you have to replace them and you have to pay through the nose for something of quality that will last. Planned obsolescence is a boon to consumerism.
December 26th, 2008 at 4:25 pm
Defense spending will go ahead regardless of it’s indirect benefits.
DARPA is a specific kind of defense spending… spending specifically dedicated to basic research. To say that it “doesn’t count” when it comes to the fact that so much of our research infrastructure is built on the backs of public spending is a statement of profound ignorance.
That and the DARPA program managers are generally drawn from a pool of people who believe in public support for basic research. Do you have any idea what DARPA funding is?
That said, if public spending on research is such a tiny drop in the bucket that we hardly spend any money on, I’m sure there will be no problem doubling or tripling it… Heh.
December 26th, 2008 at 4:51 pm
Tyro, you’re dragging this off-topic in order to declare your love to DARPA. I’m familiar with DARPA, in fact I once tried to sell them some software, but the idea that DARPA does fundamental research is laughable, unless your idea of fundamental research includes missiles, bombs, and satellites.
December 26th, 2008 at 5:30 pm
. I’m familiar with DARPA, in fact I once tried to sell them some software,
DARPA is an office of program managers who fund research, not people who buy software. But wow… you’re a mindless ignorant libertarian software developer/engineer. Color me fucking shocked. As an engineer myself, their libertarian dogmatism is a source of constant embarrassment on behalf of my people.
December 26th, 2008 at 5:54 pm
The chief problem with being poor in America in 2008 is not that you can’t afford enough stuff, but that you, and especially your children, have to live around other poor people.
December 26th, 2008 at 6:07 pm
That’s really enlightening Steve. Here I was thinking that my chief problem would be watching my most beloved friend die from lack of medical insurance.
December 26th, 2008 at 8:38 pm
Does anyone really believe that an administration where everyone one sends their children to elite private schools really believes that the public school system is capable of producing an excellent education. Even President-elect knows that one of the keys to a good education is ensuring that everyone in a school want to learn and that the culture encourage learning. Since that requires limiting the number of blacks and Hispanics in any one school, it will be impossible to produce a quality education for most Americans.
December 26th, 2008 at 10:31 pm
Well more precisely, it would be foolish and immoral to give any rich individual enough money to buy a safe, walkable neighborhood, etc.
Money can indeed buy such things, just not on a scale that would be achievable by the rich after Bush cut their taxes.
December 27th, 2008 at 1:58 pm
Some interesting observations on relative/absolute wealth:
http://www.economist.com/science/displaystory.cfm?story_id=12795581
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