Public goods are goods that once they are made they can be used by the public at no additional cost (besides occasional maintenance and upkeep), such as: lighthouses, highways, and recreational parks.
Often times public goods become confused with private goods. Take, for example, the landscaping and exterior of your house. People who go by your house will probably enjoy looking at your lovely property, but it’s at your expense. You most likely aren’t charging the people for looking at your house, so could your house be considered a public good? The same could go for you as a person. You don’t charge people for enjoying your presence, personality, or appearance when you’re shopping at the grocery store or simply interacting with people. Does that make you as a person a public good?
Many people say that public goods are goods that the government needs to provide because if the government didn’t get involved the good would not exist. We can use the same example of you as an enjoyable person: would your existence change (would you be you) if the government didn’t get involved in the making of your life? Well, you are in this world and as far as I know the government didn’t have anything to do with you being made, so no, the government had no effect on your life, yet you are still enjoyed by the public.
Back to public goods and government involvement, if the government didn’t get involved by taxing individuals in order to create those public goods there would be more money for individuals to invest into capital goods which would enable them to make more money that could then go into building a park for their children and the community’s children. By taxing and taking away less the standard of living can be improved as well.
When people are freely able to invest more of their money into capital goods they are increasing their standard of living. When the government is involved it is making your chances of investing and growing successfully less likely. When you invest in a capital good, a good that makes the process of producing more common commodities much easier on humans (for example, a machine), you are making the producing job easier and therefore you will be able to lower the price of the commodity that you are producing because it is now cheaper for you to produce. When prices lower more people are able to invest in other things like capital goods, public goods, and charities. When the government gets involved (most likely by taxing you) you don’t have as much remaining to invest in other areas where you would want your money to go. (For more information on the redistribution of wealth by the state see my essay here)
The free market economy is a wonderful system to live by. Unfortunately, many governments don’t like the free market even though the free market would make its nation much wealthier. I believe that governments who aren’t in favor of the free market economy know what positive effects the free market has but they simply would rather have control and power over their nation than wealth for it.
Picture Credit: Me. The above picture is of Pepper, Mercy’s sister, and I think Mercy’s twin brother (they look very similar) is the puppy face in the background. They almost look like stuffed animals…. 🙂