We\’ve this musing on public or private provision of public goods.
For some reason I was musing on this earlier this morning when well before dawn I was out walking with my dogs and a simple question occurred to me, which was who pays for street lights in the right wing libertarian model of society?
It’s not such a daft question. After all, street lights are a near perfect example of a property which will always be subject to free riding if paid for privately. Suppose for a moment a private supply model was created. So suppose, when I left home this morning I had to put 20p in a meter on a street lamp for a limited period of lighting, and repeat the process every time I turned a corner. Even if I’d done that there would have been no way I could have stopped the couple of other early risers I met this morning enjoying the benefit of the lighting I had paid for. Nor the occasional car that went by doing so either, come to that. It would be inevitable that in this case positive externalities would arise. But in that case resentment would (in neoliberal eyes) likely follow and as a result each and every person might opt for darkness rather than share the light. And that would mean that the street lighting might then not ‘pay’ and so would be removed, and we’d all be worse off.
Who knows where this could lead, or how grossly inefficient such a model would be in terms of massive admin cost and failure to supply an effective service. It’s hardly surprising is it that we came up wiuth a model of local government to do such things? And yet there is no doubt that the model of local government deeply offends neoliberal thinkers. This collectivism is an affront to market perfection.
Someone who had bothered to pay attention beyond the first term of university economics would have met an interesting discussion of just this.
Ronald Coase on lighthouses. They\’re obviously non rivalrous and non excludable, they\’re a public good. But UK lighthouses have been privately supplied for centuries. How could this be?
Ships that enter a UK harbour pay \”light dues\” over and on top of their ports dues. Such lights dues go to Trinity House who run the lighthouses. We accept that there will be free riding but it will be free riding of only those ships that don\’t use British ports. A small enough problem that we can simply ignore.
The other delight about his musings is that the UK does in fact have private streets (some 40,000 I believe, and some 2/3 of all of Sweden\’s roads) and the local authority may or may not provide street lighting on those private roads, the housing association or mutual that deals with road maintenance itself may or may not provide the street lighting.
BTW, the Swedish private roads associations are said to be twice as efficient as the government in their road maintenance.