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Kevin Quinn wrote:
"Why don't private resources devoted to creating excludability, when public
provision is feasible, constitute pure deadweight costs? It is not
desirable that *that* sort of discovery process go on, and taking care that
it doesn't shifts resources into worthwhile discovery processes?"
Kevin, I will try to answer your question briefly. In my view, the new
approach to public goods gives us a framework for comparing different means
of dealing with particular cases. These are cases in which we have good
reason to believe that, because of non-exclusion and jointness,
entrepreneurs would not identify resources and/or guide them into channels
of goods production even though the collective benefits are greater than
the costs of doing so. There is an additional proviso, however. It is that
a property system of some sort already exists. Otherwise, only one reason
for the entrepreneurial failure would dominate -- that there is no property
system. This, I believe, was the scene with which Larry Moss was concerned
in a recent post in which he referred to Hobbes as a source for insight
into the history of public goods.
Turning to your question, I am not sure what you mean by using the term
"private" to modify the term "resources." So let me disregard this
modifier. What we have to do is to assume some kind of property system,
presumably one that reflects reality but at the same time is analytically
manageable. Then we try to compare the consequences of non-intervention
with the consequences of various forms of intervention (we might call these
"institutional arrangements"). In making the comparison, we must account
for all of the costs and benefits that we can realistically assume would
exist under the alternative institutional arrangements. From this point of
view, the costs to entrepreneurship of producing exclusion mechanisms ought
to be taken into account. So also should the costs associated with
alternative arrangements, as well as the benefits.
So I think that my answer to your question is yes, although I would not
phrase the question in the way that you did.
Cheers
--
Pat Gunning, American University of Sharjah, United Arab Emirates;
Web pages on Praxeological Economics, Democracy, Taiwan,
Ludwig von Mises, Austrian Economics, and my University Classes;
http://www.gunning.cafeprogressive.com/welcome.htm
http://www.fortunecity.com/meltingpot/barclay/212/welcome.htm
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