----------------- HES POSTING ----------------- OK, I am going to respond to three people at once in this message. To Rod Hay. I don't see why you say that it is only utility that matters. Surely supply conditions are important as well. After all, I might get great utility from going faster than the speed of light. But, I can't. Now, extending this to also respond to Sam Bostaph's remarks, let me add several further points with regard to this food example. First, I think it is useful to distinguish merely eating from "eating out." Presumably the specific example of Sam's pregnant wife becoming nauseated from watching others eat is mostly relevant to the "eating out" case. Presumably she does not become nauseated from contemplating somebody else eating in their own home, although there may still be a negative externality from watching Sam eat in their home, just as Rod may get positive externalities from smelling the cookies his grandmother made be eaten by somebody else. In terms of "eating out," certainly we know that atmospherics, etc. are important as well as just the ingestion of food. But, in fact, the nature of the good is important as it does allow for the possibility of exclusion or not. If someone in a public place is eating and makes Sam's wife nauseated, Sam can pay that person to eat elsewhere. Or, perhaps Sam can demand that the person compensate his wife for her nausea, although I suspect he would not get too far with that one (because the law, another public good, would not side with him). Or, he can remove his wife from the public place and keep her at home. If it is his own eating or someone else's in their home, they can be asked or ordered to eat in another room from her. It is not her eating what they are eating that is the problem. It is a pure externality of watching them eat, a problem that can be pretty easily dealt with through private market arrangements, or even just sensible private actions without any money changing hands. No such easy arrangements for removing someone from experiencing or not experiencing being defended against nuclear attack can be conceived of. It is in the nature of the good itself, not in its utility characteristic, that the problem of non-excudability arises and the distinction between mere externalities and collective consumption goods. I can imagine that perhaps one might organize a survivalist group that could build super well stocked, very deep fallout shelters. But, this is a high cost activity. So, let me provide yet another example of an absolutely pure collective consumption good, one about which there is serious discussion now, preventing an asteroid from striking the earth. Anybody want to argue with that one? BTW, for the anarcho-capitalist crowd, what about law that defends contracts and property rights? Or is this itself a potentially private property right? That kind of argument can lead to a Marxist position that property is merely a device to exploit those who have no property.... In response to Greg Ransom, in principle you are right that philosophical/methodological issues are issues that should not be palmed off into separate categories. The real question here is relevance to the issue at hand. I believe I used those labels in connection with two issues, one relevant, one irrelevant. The relevant one (IMHO) involves the very existence of collective consumption goods. I recognize (again) that it may be a valid philosophical position to deny the existence of such goods on some kind of methodologically individualist grounds. I do not happen to accept that argument, as I have tried to make clear with various examples. I note that Samuelson was aware of this argument in his original paper, and thus attempted to ground his argument in individual utility considerations. The other issue has to do with the use of mathematics. Let me be very clear that I consider this to be irrelevant to the issue at hand. I mentioned it in this way because it seemed that Patrick Gunning was making a big deal out of this with his claim that Samuelson was somehow using math to define his categories, a claim that I reject. I suspect that what lies behind this remark of Patrick's, although I may be wrong, is in fact a questioning of the use of math in economics on methodological grounds. I accept that there is a valid methodological debate about this. But, I consider it irrelevant to the existence or nonexistence of collective consumption goods, and what anybody should do about them, presuming they do exist (which I think they do). Certainly Samuelson's result became famous, indeed pervasive in textbooks despite the dismissal that is a "dark ages" argument, partly because of the neatness of his mathematical formulation of it along with the straightforward graphical interpretation of a vertical summation of demand curves to contrast with the horizontal summation one carries out for pure private goods. But, even if one disallowed him from using the mathematical formulation, the essence of the argument would still be valid. The only real response is to simply reject the existence on whatever grounds, philosophical, empirical, or whatever, of such collective consumption goods. It seems that this is Patrick's position, and I can respect it, although I am not entirely clear exactly on which grounds his rejection is based. Finally, let me return to a broader issue regarding what this is all about and the uses of some of the terminology involved. I think it has been unfortunate that this term "public goods" has been used because it obscures what is involved, the collective consumption nature of the goods that implies the impossibility of excluding someone from consuming them, which in turn implies the free rider problem of their general private provision. But, it is almost certainly the case that out of the several papers that Samuelson wrote on this, he was trying to explain an empirical reality, why do certain goods seem to much more frequently provided by the public sector while others seem to be much more frequently provided by the private sector? And, I think he must be given credit for having come up with an important explanation, that the closer a good is to being a pure collective consumption good, the more likely it is to be publicly provided and the closer it is to being a pure private good, the more likely it is to be privately provided across different societies. Indeed, the national defense and food examples are excellent ones. Even if it is not an absolutely pure collective consumption good, national defense is pretty clearly way over toward that end of the spectrum and, big surprise, is almost always publicly provided, even when what is happening is the state hiring a mercenary army. Although there may be some (fairly minor, frankly) externalities issues regarding food consumption (I think there are much more serious ones with food production), food consumption is way over at the other end of the spectrum, and agriculture is one of the sectors most frequently in the private sector. I note that even in pretty rigid command socialist economies, one is likely to find markets for privately produced agricultural commodities, such as fruits, vegetables, and dairy products, to be the most likely candidates for a private market that is allowed to operate by the government and does so. In short, I think that Samuelson fully deserves the praise and recognition that he has received for his work in clarifying the nature of collective consumption goods. As a final note, the original article by him on this matter is "The Pure Theory of Public Expenditure," Review of Economics and Statistics, November 1954, pp. 387-389. Barkley Rosser ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]