----------------- HES POSTING ----------------- 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 ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]