----------------- HES POSTING ----------------- 
 
J. Barkley, I also am growing weary of the discussion. Your recent post 
asserts that Samuelson points the profession in the direction of an 
analysis 
of local public goods or club goods (gated communities) on the grounds that 
Samuelson admits that there are few examples of pure public goods, by his 
definition. Your post also points out that Samuelson compares the 
bureaucrat's 
optimal solution with the decentralized market solution. 
 
It should have been evident to Samuelson that (1) a bureaucrat are unlikely 
to 
be able to acquire the knowledge needed to identify which goods are public, 
local, or club; (2) even if he could, his incentive in a democracy to 
acquire 
the knowledge and afterwards to produce the efficient quantity in the 
efficient 
way would be dull if it exists at all; and (3) the whole idea of an optimal 
solution assumes a static world, thereby disregarding changes in 
technology, 
both external and internal to the industry, and other changes  that would 
alter 
the optimal solution and, as a result, render some initial optimal solution 
non 
optimal over time. But Samuelson did not stress any of these points. All he 
did, in general, was compare some optimal bureaucrat's solution with an 
optimal 
market solution. So I will simply restate my argument that the Samuelson 
approach is irrelevant from a policy perspective and that it leads policy 
economists to approach the subject of government intervention from a "I can 
find out what's best"  perspective rather than from "free entry and 
competition 
among private firms and local governments is a discovery process that I 
must 
recognize is more subtle than it at first appears" perspective. 
 
Samuelson's analysis leads us to the first perspective; Coase's leads us to 
the 
second. If recent history had been characterized by an increasing awareness 
by 
local governments of free rider problems and by national government 
bureaucrats 
of the limited relevance of pure public goods theory, Samuelson's analysis 
would be more relevant, at least from the standpoint of describing history. 
What has really happened, however, are (1) a series of technological 
changes in 
the private sector that have altered economist's views of how to best cause 
the 
supply services that at one time seemed to be characterized by jointness 
and 
non-exclusion characteristics and (2) "government failures." The Coasean 
approach enables us to understand and explain the market economy changes as 
well as to appreciate the importance of free entry and competition in 
facilitating them. The public choice approach to politics helps us 
understand 
the government failures. The Samuelson approach does not suggest, to me at 
least, either of these directions. That's why I see it as a dead end. 
 
Pat Gunning 
 
------------ FOOTER TO HES POSTING ------------ 
For information, send the message "info HES" to [log in to unmask]