Why every state should be a welfare state.

You get standard practice adopted. Anything out of the ordinary raises eyebrows. Even slight deviations in practice and you get tuts! (I've encountered something similar in poverty analysis when I was a little nipper)

 

Yikes! When we see this happen in software development we tend to be concerned about group think.

 

Its not like a publication bias. Its a means to avoid noise in results. It also minimises ad hoc decision making, whilst allowing the researcher to focus on genuinely interesting issues

 

Does God exist merely because he has a definition? Most people throughout history have believed in God. Does that mean any discussion about whether or not God exists is irrational? You simply cannot defend the existence of public goods, so you must find a way to prevent discussion. That reflects poorly on you, not me.

Yes, and fairies have certain characteristics. That does not mean they exist. The counter claim is blatantly obvious, as I have specifically made it numerous times. Public goods do not exist, hence I am saying goods with the characteristics you are describing do not exist. There are three essential characteristics to public goods, as you yourself have stated.
1. Nonrivalrous (to a degree)
2. Nonexclusive (to a degree)
3. Result in market failure.

I am saying characteristics 1 and 2 will never lead to characteristic 3, thus no good can ever have all three characteristics. Therefore, public goods, by my argument, cannot exist. Such a claim is completely valid to make. You can debate whether such a claim is true, not whether such a claim can be made. Now stop wasting my time, and debate my claim.

I do not dispute that goods may be nonexclusive and nonrivalrous. I dispute that they will ever lead to market failure if they are nonexclusive and nonrivalrous. I previously stated that public goods will never lead to market failure, but you said that public goods lead to market failure by definition. So I merely put forth the notion that public goods do not exist, if they must result in market failure by definition.

Your refusal to engage in any of my reasons explaining why this is the case only strengthens my position. If it is so obviously false, you should easily be able to refute it, yet you dont even address it.

 

Repetition of naff all. Here's the request (which I assume will be dodged):

We know that there are thousands of economic papers studying the nature of public goods. This is a decidedly diverse literature that includes- for example- definition issues, the history of economic thought, interaction of public goods with economic development, determination of optimal provision, voting models, experimental economics and rent seeking (And that's the tip of the iceberg). In comparison, you've come out with low brow statements alien to the economic research. Perhaps you can inform us of one economic source that supports your position? Your choice (or dodge) will be revealing

 

What to defend. I got you to admit they exist below.

Odd, then why below to you freely admit that goods can have these characteristics? A good with those characteristics is a public good just as a rodent with a black stripe down it's back is a skunk. It's merely a categorization, nothing more.

Fine, don't even care about 3 anymore. The first two are the only one's required to be a public good.

The first two were the only requirements. I and ... every other economist I've read outside of Rothbard, believe those features lead to market failure, but that's something separate.

If it's a waste of your time feel free not to respond, after all that'd be consistent with your position.

BAM, BINGO! DING DING DING DING DING.... If a good is, it's a public good. Period.

Now that's we've crossed the first bridge. Let's try this one, I need to ask a question first:

Can markets exist in the absence of property rights and competition?

 

To avoid, or to minimize? I don't see how noise is avoidable, you can't hold everything constant.

That sounds reasonable and I openly admit I'm not intimately familiar with the math, I'm just leery of consensus in the social sciences.

 

Take poverty. Someone using 60% of the equivalised median will introduce uninteresting differences in poverty than someone using 50%. Avoiding ad hoc decisions is jolly dandy unless a reason can be presented (e.g. evidence that the 60% decision is based on consistency with a subjective poverty definition).

 

So you have changed your definition then. Because you said by definition public goods lead to market failure. Now you say by definition they don't. You just change your position to whatever is more convenient. Pure sophistry.

Then my argument is what is was all along before you said it was impossible "by definition". That is: A public good will never lead to market failure. All of my arguments as to why this is the case are just as relevant as before, and still waiting to be addressed. And if the nature of a public good does not lead to market failure, there is little use to having a term to describe it. It is simply just a good.

I define the free market as the whole of all voluntary interactions. I would say property rights must exist, but whether property is best individual or collective is something people can decide. If I produce something with my own labor from nature, it becomes my property. I can choose to make the property collectively own or common if I wish. As for competition, you will have to clarify exactly what you mean by that.

Now I get to ask a question. You previously said no "pure" public good exists. So then my question to you is what degree of the characteristics "nonexcludeable" and "nonrivalrous" make a good a public one?

 

Nope, even posted the definition. So why lie?

I said that public goods leads to market failure, but that's a separate argument and doesn't change the definition of public goods.

Yes, market failure is caused by public goods, by definition. Again, doesn't change the definition of either term, which I again posted from the very beginning.

Perfect! I would define it in much the same way.

Ok, excellent. From where they're derived and who protects them is irrelevant to the point I'm building towards.

What I don't mean is perfect competition. What I do mean is essentially, not monopoly control.

So, prior to answering your query I'll make my point. Market Failure is terminology used to describe a condition, where there is either no competition or an absence of property rights and as a result the market doesn't do the near perfect job it does with virtually every other good. Maybe the term isn't fair, since it occurs in the absence of the things that we agree make markets work, but nonetheless it's what professional economists use to describe the scenario.

It doesn't imply that government is the solution, it means that it might be, but then we get to tackle government failure. A topic I'm speculating you'd be more comfortable with.

[/quote]Now I get to ask a question. You previously said no "pure" public good exists. So then my question to you is what degree of the characteristics "nonexcludeable" and "nonrivalrous" make a good a public one?[/QUOTE]
Any degree. That a good exhibits any degree of both characteristics would qualify it, but let's be clear; It stops there, just because I've identified something as a public good does not mean I think government is best equipped to fix it. In some scenarios I do, we may disagree on that, but that's a MUCH better conversation to have and very much look forward to it =)

 

Let me remind you of your own words.

You said it, we all know it, so stop pretending you didn't.

The definition of market failure is not "failure caused by public goods."

Great!

Sounds good.

You will have to be clearer about what "monopoly control" is.

I said property rights must exist for markets to exist. If property rights do not exist, there is no market, and thus no market failure.

No, that is a topic you are more comfortable with, which is why you keep refusing to discuss whether or not public goods lead to market failure. You take it for granted without addressing counter arguments to the contrary.

If public goods do not lead to market failure, it makes little sense to find out what should be done to correct a problem that does not exist. Before the conversation you want to have can happen, it must be established that public goods lead to market failure. That has not been established.

You have a very broad notion of a public good. There is a beautiful tower across the main street in my town. People often take pictures of it. People benefit because of how good it looks, and there is no way to stop them from looking at it (nonexcludeable) one person looking at it does not detract from anyone else looking at it (nonrivalrous). Therefore, by your definition, the tower and all aesthetically pleasing buildings are public goods. Can you explain to me how this is a market failure?

 

Yes, I still stand by my statement that public goods lead to market failure. That however does not change what public goods are, goods that are nonrivaled and nonexcludable.

It sort of is since my contention is that market failure occurs in the absence of the mechanisms that make markets work. Strictly speaking it's when the market solution is not efficient. Another definition I also provided.

A price setter, a firm that doesn't has to respond to demand, price is utterly inelastic.

Then we're at least making one similar argument. The term is a poor one, how is it market failure if the rules for a market are absent?

BUT again, it's the term used within the profession.

I did address it! I agree it's a poor term to describe the scenario, but acknowledge that it's the standard amongst economists. The latter part of the sentence is essentially the crux of our argument, one I don't think is terribly important.

This frustrated me a bit because I gave a great example about why we need to do something. Fishing; no one owns the ocean (property rights issue) and the incentive is to over fish (which leads to a negative outcome for every single actor involved) -- This must be addressed, unless you don't want to eat fish... A solution might be to have fishers bid on portions of the ocean over which they could fish and they could sell the rights to these plots. This solves both the problems, it's a market based solution, but is in fact a solution for a problem which economist call market failure.

The only possible way the tower could be considered a public good is if it did nothing, whatsoever other than sit there and look pretty. The other required assumption is that there was demand for this tower.

If, despite the demand for it, and the markets willingness to pay for it, it never gets made then and only then is there market failure.

Supply and demand tells us that market will produce goods to meet demand and will offer them at a price the market is willing to pay. This never occurs and is why we apply the term. It certainly doesn't mean that any third party ought to step in and build this tower.

 

Vertical aggregation of individual demand curves, rather than horizontal aggregation

 

Can you simplify? EILI5 (explain it like I'm 5) =)

It's getting late and I'm two drinks in.

 

Have a look at this summary. And think yourself lucky. Haven't slept in 24 hours and me dog is looking like an unicorn

 

Thanks, I always found the graph drawing dull, probably why it hasn't stuck with me since I've left the university.

Or maybe I just had a poor teacher.

HA! I live the capitalists dream, short hours and a cushy salary. I never miss my winks.

 

I would argue that natural monopolies do not exist, but that gets into another topic altogether.

Market failure is a term used to describe what happens when goods in a market are not allocated as efficiently as they could be. It still requires there to be a market, by definition. If markets are absent, there can be no market failure. Such a statement is impossible to refute in a rational way.

Something cannot fail if it does not exist in the first place. If a girl is an orphan and she grows up to be a criminal, you cannot blame her nonexistent parents for failing to raise her properly.

In order to fish in the ocean, you must obtain a license from the government. Governments virtually own the ocean in that they regulate the waters, determine who can use the waters, and the like. What you call a market failure is a government failure. If an area of ocean were owned, and if that area only made money by selling privileges/licenses for fishing, the owner would have every incentive to make sure his waters always had enough fish to be sustainable. Otherwise, nobody would fish in his waters, and he would lose money.

You are making the tower a public good by requiring it to be a pure public good. If a public good is simply nonexcludeable and nonrivalrous, and the tower exhibits those traits, how is it not a public good? Every good may have a host benefits and uses depending on the user (hence the subjective nature of wealth and value).

If something is not purchased, then the individuals in the market are not willing to pay for it, because the opportunity costs are too high in their own opinions. Demand can only be known after the exchange has occurred.

The only way to supply the tower would be to harm someone else (taking their money against their already chosen voluntary uses of it). Pareto efficiency requires that people benefit without anyone else being harmed. So the market is more efficient without the tower if people have chosen not to build one. If they have not chosen to build it, they value other things more. They may need both the tower and the other things, but they can't have both, so they must choose what they value more. What is needed most is relative to the people making the choices, not a third party.

 

My backward bending labour supply curve never kicked in. Bleedin textbooks give you false hope!

 

IIRC aluminum is one such example. It can only be extracted from very specific locations so competition is difficult/impossible.

It's a strange term to describe what occurs. But that's what is typically used.

I'm not an expert on oceanic fishing, I don't know what is required anymore. Government was the solution that was chosen. In the absence of government we have a problem though, it's a tragedy of the commons.

In other words, artificial property rights are created to correct for the problem that exists. Governments are often evoked in these scenarios because they also typically have a monopoly on violence to enforce the property rights they create.

Government failure is a different phenomenon. Certainly one that exists though.

If it did anything other than sit and look pretty, it wouldn't be a public good and the metaphor wouldn't matter.

Yup, too high for any individual to take action. If we could somehow bring them together however they'd pay less than they would. As a result, they get something they demanded and paid a lower price than what it's worth to them.

Weren't you the same fellow that also said demand is limitless?

Correct, but if i'm using it correctly it only concerns an analysis of their monetary outcomes. So you can steal something from someone as long as you pay them back at least the full value of what they took.

If it's something "everyone" wants and is willing to pay for and is never delivered or is delivered at a price above equilibrium a supoptimal outcome has been achieved.

Most importantly for me, that doesn't mean anyone needs to show up and build it. Just that it's not the best possible outcome.

 

I'm living the American Dream!

Or rather, picked the right industry during enrollment. Probably smart I didn't choose economics!

 

The American Dream? Empty promises of a bright future in return for misery today? Better to just say that you're a lucky git

 

Overton window - a slight deviations recenter the window over time.

 

?!?. How many internet servers run Apache?

Why?

 

1. Nonrivalrous - goods may be consumed by many at the same time at no additional cost
2. Nonexclusive - available to all

That fits over the air television, radio, and street lights - with in their range. Is TV and radio a public good? Or, a commercial (pun intended) enterprise that serves the public?

I can't think of a single thing the government provides that is a public good. Military and police are rivalrous - a common good, not a public one.

 

No, you can't think of a single thing that is a "pure" public good. That notion is really used just to help textbook analysis