Are Public Goods Really Public? Cover Image

Czy dobra publiczne są naprawdę publiczne?
Are Public Goods Really Public?

Author(s): Jan M. Fijor
Subject(s): Economy
Published by: Instytut Nauk Ekonomicznych Polskiej Akademii Nauk
Keywords: public goods theory; welfare economics; interventionism; Austrian school of Economics; efficiency; free market; political market; regulations; welfare state crisis

Summary/Abstract: There has been compelling evidence that the financial crisis originated in the USA in late summer 2008 resulted from growing interventionism and government involvment in the economies of the developed countries of the EU and the United States. A theoretical foundation of interventionism is the economic theory known as a welfare economics and/or public goods theory. Its principal thesis says that - since the free market fails - in order to correct that failure, a political (governmental) intervention (action) is needed. This paper criticizes scuh an approach and shows that although market is not perfect, any political (nonmarket) correction or/and substitution of the private sector by the state sector is an even bigger mistake. The reason is that public goods theory is based on arbitral, political, biased judgments rather than on pure, value-nautral, scientific assumptions. We support that point with exapmles of such basic public goods: education, security and national defence. The paper is a part of a bigger study on efficiancy of three similar enterprises working in three different sectors: state, cooperative and private. In conclusion interventionism, substituing private sector with the state sector and basing economic development on the welfare state concept, could jeopardize existing standard of living.

  • Issue Year: 2011
  • Issue No: 1
  • Page Range: 87-100
  • Page Count: 13
  • Language: Polish