Physical Goods, Immaterial Goods, and Public Goods

Public goods in economics have been a contentious theoretical issue since Paul Samuelson introduced the concept in 1954. The main sources of contention are what real world things are public goods, and who should provide them. In this post I propose a new way of looking at goods that will shed light on why public goods have posed such a problem. In particular, I propose that there is an important distinction between physical goods and immaterial goods; that public goods can only be immaterial goods; and that this unique feature of public goods does not preclude the market to provide the “socially optimal level.


Economists define a public good as something that is “non-rival” (meaning that one person’s consumption does not affect another person’s), and “non-excludable” (meaning that one person cannot stop another person from consuming the good.) Public goods are often contrasted with private goods, which are rival and excludable.

The implications are that public goods cannot be provided by a free market, because no one would have to pay for such a good, and so there would be so incentive to produce it. Therefore, the argument goes, the government ought to provide public goods.


An example of a private good is an apple. Imagine a world with just you, me, and an apple. If I take a bite out of the apple, there is now less apple for you to consume. That means it’s rival. If I put the apple in a locker to which only I know the combination, then again you are prevented from consuming the apple. This makes it excludable.  Continue reading


BC’s weekend reads

  1. The dangers of football safety equipment
  2. Want less pollution? Privatize the roads (just ask the bicyclists)
  3. Octopuses Are ‘the Closest We Will Come to Meeting an Intelligent Alien’
  4. Are Humans the Real Ancient Aliens?
  5. Tennessee Whiskey

BC’s weekend reads

  1. Freedom of the Athenians (book review)
  2. The Myth of the Myth of Barter
  3. Trade Liberalization and Growth: New Evidence (pdf)
  4. From West Philly to Gulshan e Iqbal and Back
  5. Obama’s Witness for the Prosecution
  6. When Your Dream Lovers Die

BC’s weekend reads

  1. Introducing… Jesus and Mo
  2. On private property and the commons
  3. Why Merkel’s Kindness to Asylum Seekers Could Reflect a German Soft Spot for Islam
  4. Why I find the Mthwakazi monarchy restoration unjustified
  5. September (a song about me)
  6. From the Far Right to the Far Left
  7. Beyond Neoliberalism (book review)

BC’s weekend reads

  1. Hongcouver
  2. Making a Case for Bishops’ Authority in the Second and Seventeenth Centuries
  3. Global Warming is not a Crisis
  4. Dondante
  5. From masterpieces to selfies (top link)

American Idiots

The biggest mistake one can make, when on a remote trek, is to not bring a large variety of music. A paucity of music leads to repeating the same albums over and over again, which can have disastrous consequences for one’s mental health. Luckily my choice in music is excellent. I had the Rolling Stones’ “Some Girls” album to accompany me, with such gems as “When the Whip Comes Down,” “Respectable,” “Far Away Eyes” (my personal favorite), and “You Win Again.” Almost as good is my childhood love, Green Day’s American Idiot.

When the album came out ten (10!) years ago, in 2004, I was in 7th grade. That is, I was a complete political incubus. Like an amoeba, my political instincts were reflexive, I loved the gods the city worshipped, and I hated the gods the city did not worship. I hadn’t listened much to the lyrics then or later, but now that I was repeating the album constantly, as an accompanying refrain on my mountain ascents, I had cause to examine what the singer was actually singing about.

The titular song, “American Idiot,” is a triumphalist left wing punk ballad. The singer does not come right out with his political affiliations, but his statement: “well maybe I’m the faggot America/I’m not part of a redneck agenda” seem to put him on the left side of the aisle, right in the middle of the Kulturkampf. He has reason to celebrate, for although the issue of gay acceptance was up in the air until quite recently, it seems to have been decisively settled: gays are accepted now, get over it, it’s only a matter of time until the law catches up.

Perhaps on this issue he may be pleased, but overall, he should be appalled. Behold the following:

“Don’t want to be an American idiot.
One nation controlled by the media.
Information age of hysteria.
It’s calling out to idiot America.”

He meant this to be an indictment of right wing types, idiots who watch Fox News and vote Republican and wave the flag and all that jazz. Such a criticism may, indeed, apply to them. However, it seems to apply much more to the left wing today, than to the right.

Case in point. A scientist lands a rocket on a comet, millions of miles away. Technically this is a stroke of brilliance, and deserves all the hearty praise we can offer. However, instead of focusing on this grand achievement, the moment was hijacked by the social justice warriors. The team leader’s shirt was deemed sexist, and the incident labelled #shirtgate. Gasp! faint! He then recorded a groveling apology for the jackals. When I see Nepalis plowing their fields with the same tools the Sumerians developed, and then consider what some of us in the West consider problems, I almost weep for our decline. I find cackling to be much more appropriate, however.

This sort of model happens all the time. Someone says something that is offensive to the gods the city worships, social media or the MSM whips up a frenzy, and the offending party either capitulates immediately or is attacked until he (almost always a man, it seems) issues some sort of apology. The jackals are satisfied, or more likely, they simply become angrier. This happens so frequently that it is redundant of me to even describe the cycle. Brandon describes it well in his excellent article on the cannibalization of the left.

Green Day caused a big ruckus when their album came out. But now, ten years on, it is interesting to see that the new* American idiots aren’t Bible-thumping, faggot-hating rednecks from Georgia – they’re young millenials, smug in their moral superiority, tearing people down with the virtual power of social media. What’s funnier, or perhaps sadder, is that these same people are, like me, kids who grew up listening to this album. Happy trails!

*A better word, in light of comments.

Around the Web

  1. A Brief History of IRS Political Targeting.
  2. Listen to the fascists sing.
  3. Philosopher Kevin Vallier’s response to a hatchet job on FA Hayek in a stale (and apparently desperate) Left-wing publishing outlet.
  4. Political scientist Samuel Goldman’s response to the same hatchet job.
  5. The aforementioned hatchet job (in The Nation).
  6. Monkey Gone to Heaven.