Public goods and private profit

As I prepare my lecture notes for the coming semester, covering the typology of types of goods and market failures, it has become ever clearer that a lot of new digital goods and services have all the features of public goods and then some. This article in The Awl (courtesy of Azeem Azhar’s The Exponential View) about Uber/Lyft as a privatized public transport system¬† – for the affluent –¬† seems to fit into the theme, albeit not as pure an example as a search engine, say. Anyway, it seem to me that the traditional 4-way classification of goods along the rivalry/excludability axes needs to be expanded – it would have a super-rivalrous line for positional goods, and a super-non-rivalrous line for network goods.

The article cites an excellent book, Martin Gilens’ [amazon_link id=”0691162425″ target=”_blank” ]Affluence and Influence: Economic Inequality and Political Power in America[/amazon_link], which is an empirical study of the way political decisions have come to be shaped in the interests of the rich. However, Azeem tweeted me:

@diane1859 Uber might be the only way America gets anything resembling broad based ‘public transport’, with Uber collecting the tax…
30/08/2015 13:42

Of course there is also government failure, and America has plenty of it. And certainly the private sector can provide some public goods; but of course under-provides them and rarely cares about universality, the characteristic that ties together different people in a single political and cultural community. Universality is too often under-valued, especially by those for whom economic efficiency is everything.

[amazon_image id=”B008AU9LZM” link=”true” target=”_blank” size=”medium” ]Affluence and Influence: Economic Inequality and Political Power in America[/amazon_image]

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