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Dear colleagues, 
 
The debate over the provision of public goods is often wasteful with one 
side making sounds like a chicken and the other making sounds like a duck.  
Communication is not always successful. 
 
Consider these two statements: 
 
Statement 1:  In a market system there are methods for producing and  
financing a public good and here are three historical examples, 
lighthouses,  
volunteer fire depts,  education.    (Political argument:  Since public 
goods  
exist without government intervention this proves that the free market can 
do  
it and the "public goods" argument for state intervention is a fallacy). 
 
  
Statement 2: In a market system there will be an undersupply of public 
goods  
because those who finance their construction and maintenance will on the  
margin not be able to capture enough of the extra benefit an additional 
unit  
of supply helps produce.  (Political argument:   Since the marginal  
conditions for optimal resource allocation are not likely to be met in a  
market system, the government is needed to provide additional financial  
incentives so that self-interest produces the optimal allocation of  
resources.)   
 
These two statements are quite different.   From the historian's point of  
view, I am not certain what we should look for in the past to identify a  
public goods argument.  
 
If I had to nominate one economist/philosopher as having presented a 
seminal  
and early argument about the provision of public goods, I would nominate  
Thomas Hobbes.  If you buy into the view that what allows a market system 
to  
function is its infrastructure of institutions (rule of law, property 
rights  
and methods of legitimate transfer, etc., etc.) then it was Hobbes who  
explained why a central authority is needed for the provision of public  
goods.  In order to escape the poverty and depravation of the state of 
nature  
and permit the development of what Hobbes called the "commodious life" a  
strong central power is needed to keep all men and woman in awe!  According 
to Hobbes, the sovereign made contracts possible and without contracts it 
is  
difficult indeed quite impossible to "contract" for the construction and  
provision of public goods.  In Hobbes's time, map making would have been a  
"public type" good and yet it was provided (as art collectors know so well) 
in ample and beautiful formats.  Hobbes is quite specific about how without 
a  
strong central authority, the making of maps (navigation), the development 
of  
agriculture would be impossible.    
 
Laurence S. Moss 
 
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