If you're ever trapped in a debate with a glibertarian who insists that The Free Market is always, always, always the bestest way to handle everything ever, and you know he's wrong but you're having trouble saying why, crisply, then read Paul Krugman's post, "What should government do? A Jindal meditation."
Part of it is bashing Bobby Jindal, which is fun, but the other benefit is some clear language, which I've bolded:
What is the appropriate role of government?
Traditionally, the division between conservatives and liberals has been over the role and size of the welfare state: liberals think that the government should play a large role in sanding off the market economy’s rough edges, conservatives believe that time and chance happen to us all, and that’s that.
But both sides, I thought, agreed that the government should provide public goods — goods that are nonrival (they benefit everyone) and nonexcludable (there’s no way to restrict the benefits to people who pay.) The classic examples are things like lighthouses and national defense, but there are many others. For example, knowing when a volcano is likely to erupt can save many lives; but there’s no private incentive to spend money on monitoring, since even people who didn’t contribute to maintaining the monitoring system can still benefit from the warning. So that’s the sort of activity that should be undertaken by government.
h/t: Atrios, who reemphasizes nicely:
... volcano monitoring is a public good, something with a precise definition in the world of economics (as opposed to a publicly provided good, which is just anything the government happens to fund).
Maybe you already knew these terms, but I didn't.
7 comments:
Pardon my passing-through comment, but Dan linked to this in a comment on my site.
I have only this question: Why should I listen to nobel laureate Paul Krugman, when every other nobel laureate economist on the planet thinks he's a complete nutter?
(and I confess that I didn't even read the post...or the statements from Krugman. It just seems a fair question when you start by saying that people should listen to him.)
Now, having read the post, I have only one objection--that there are "many" other undisputed public goods. Of course, this depends on shades of gray--there are virtually no purely public goods...most economists will agree that national defense is about as close as it comes, though some disagree.
The "many" others Krugman refers to are not perfectly nonrival, nor/or are they perfectly nonexcludable...and like all things, the devil is in the details on these others. If you determine that something is sufficiently nonrival, then you give the government your blessing in providing it. But don't expect everyone else to agree that it's sufficiently nonrival to justify intervention in the marketplace.
My question about Krugman remains, however.
I have only one objection--that there are "many" other undisputed public goods.
Scott,
I infer from this comment that you do at least agree that "bashing Bobby Jindal" is fun.
I am glad that all three of us can agree on this important fact.
Why should I listen to nobel laureate Paul Krugman, when every other nobel laureate economist on the planet thinks he's a complete nutter?
What? That isn't enough reason?
Dan
I'm generally a proponent of making fun of people, whether it's Bobby Jindal or someone else.
Doghouse
Maybe for you. For most people, even a bit of agreement among the scientific community is a signal--albeit imperfect--that the individual in question isn't a crackpot.
Everyone defends things like global warming by saying that the overwhelming majority of the scientific community agrees on this. Why shouldn't the same thing apply to other disciplines?
Scott:
Pardon my passing-through comment ...
Not at all. Happy to have you weigh in, early and often.
I have only this question: Why should I listen to nobel laureate Paul Krugman, when every other nobel laureate economist on the planet thinks he's a complete nutter?
There's no way I'm not going to sound like a dork answering this now, since Mr. Riley's earlier comment was FTW, but, what the hell. It's not like I haven't already been outed as a dork.
(a) I don't agree with your assertion that every other "NLEOTP thinks he's a complete nutter." Show me some evidence, and by evidence, I mean more than pull quotes from just a few of them, and especially not from those whose theories have since been discredited.
(b) Lots of other economists, in any case, do not.
(c) If you laid every economist on the planet end to end, you'd reach what?
(d) I know it's fashionable among what passes for comics on the right to say, "Paul Krugman has successfully predicted nine of the last five recessions," so I'll just save you that bit of typing. To my mind, PK has gotten a lot right since I started reading him a decade or so ago, including predictions such as: what a disaster Bush's budgets would be, what a disaster Bush would be, how Greenspan's loss of mind/growth in fealty to the GOP was going to cause big problems, and how the housing bubble spelled Big Trouble, among others. I also find his analysis insightful, while not agreeing with every conclusion he comes to. At the very least, him being happy with Obama's budget is far better than him being unhappy with it.
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As to your quibbling about there being no such thing as a pure public good, meh. In the abstract, I suppose I agree. In real life, I think there are quite a few things that count as public goods, once it is admitted that the only other choice is to let what we laughingly call the private sector and the free market control it.
For example, besides the military, lighthouses, and volcano monitoring, I'd add policework, firefighting, mail delivery, water and sewage treatment, building and maintenance of roadways, defining and enforcing health, safety, and pollution standards, and ensuring a social safety net.
I am starting to believe, after not believing for most of my life (ask Dan), that we should add offering a minimum level of basic health care for everyone.
I am also close to thinking that we ought to add maintenance and building-out of the infrastructure of the Internet to the list.
Probably there are others.
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Answer to (c): No conclusion.
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