SHOE Archives

Societies for the History of Economics

SHOE@YORKU.CA

Options: Use Forum View

Use Monospaced Font
Show Text Part by Default
Show All Mail Headers

Message: [<< First] [< Prev] [Next >] [Last >>]
Topic: [<< First] [< Prev] [Next >] [Last >>]
Author: [<< First] [< Prev] [Next >] [Last >>]

Print Reply
Subject:
From:
[log in to unmask] (Patrick Gunning)
Date:
Fri Mar 31 17:18:26 2006
Content-Type:
text/plain
Parts/Attachments:
text/plain (67 lines)
----------------- HES POSTING ----------------- 
 
Thanks, J. Barkley, for your post. I went back and looked at the Head 
paper, 
which discusses the section in the Samuelson article to which you refer. I 
also 
looked at the Samuelson paper. Head acknowledges that Samuelson associates 
collective consumption goods with "external effects," which gives rise to a 
free rider problem. Samuelson wrote that "external effects" are "basic to 
the 
very notion of collective consumption goods."(389) 
 
Head goes on to point out that in the earlier econ literature (he refers to 
Sidgwick and Ellis and Fellner), external effects were associated with 
a "divorce of scarcity from effective ownership." Then he introduces the 
term "nonappropriability" to refer the impossibility of private firms or 
individuals "to appropriate the full benefits...arising directly from their 
production and/or consumption of certain goods." He goes on to 
discuss "ownership difficulties."(203-4) 
 
Head points out that Samuelson's public goods exhibit this characteristic. 
But 
in my reading, Head's exercise is not simply a repeat of Samuelson. On the 
contrary it is an insightful interpretation that Samuelson did not himself 
make. 
 
I would argue that it is precisely this interpretation that opened the door 
to 
the developments in the theory of property rights that have led to the 
current 
textbook definition. Had we followed Samuelson, we would be defining public 
goods mathematically and technically instead of asking questions about the 
optimal set of institutions and rights to control resources. 
 
I stand by my original "humble" description of the history. But let me 
change 
hats to that of a not-so-humble historian of thought (or what the grumblers 
would call a "whig" historian). In my view, Coase, while not focussing on 
public goods to any great degree, is the giant in this field because he 
initiated the revolution in thinking that led at least some economists to 
couch 
all market failure problems in terms of the obstacles individuals face in 
reaching the optimal solution through exchanging rights to control actions. 
Looked at in this way, the prospective interventionist must ask how the 
intervention will affect (1) the existing configuration of (a) rights to 
control actions and (b) rights to exchange control over actions and (2) 
actions 
that will be taken under the various configurations. 
 
I see nothing in Samuelson that even hints of this. On the contrary, one 
who 
follows Samuelson would seem more likely to pigeonhole public goods 
problems 
and proposed interventionist solutions into mathematically-defined classes. 
 
 
Samuelson, Paul, "A Note on the Pure Theory of Consumer's Behavior," 
Economica, 
1938. 
 
Head, J. G., "Public Goods and Public Policy," Public Finance, Vol. 17, 
1962. 
 
------------ FOOTER TO HES POSTING ------------ 
For information, send the message "info HES" to [log in to unmask] 
 

ATOM RSS1 RSS2