The city of South Fulton in Obion County, Tennessee, offers fire protection to households living outside of the city limits for a fee of $75 per year. If you pay the fee, then if your house catches on fire, the fire department comes and puts it out. If you don’t pay the fee, they don’t. This sounds reasonable. People living in the city limits pay city taxes for city services. The city offers those services to people living outside the city limits when they can, but asks them to pay a share for them. Some choose to pay the fee and others don’t.
…problems with voluntary provision of a public good. If you ask people to voluntarily contribute toward a good like having a fire department or an army, the rational person says to himself “if everybody else pays, and I get protected even if I don’t pay, then why should I pay?”
A public good is not a good provided to the public. It is not even something good which is provided to the public. It is something which is non-rivalrous and non-excludable.
The entire point of this story is that while fire protection is good for the public, is a good supplied to the public, it is in fact excludable and is therefore not a public good.
That was your economic pendantry note of the day.