Markets and Public Goods

Filed under:Random — posted by jbs on April 3, 2005 @ 9:44 am

Market forces are often not good at providing public goods. For example, Infrastructure (roads, public transport,etc) and research (would Hubble have come about if market forces dictated astronomy?).

But why is that? Markets are good at controlling economic activity, but not so good at controlling non-economic activity. Part of the problem is that infrastructure and reasearch activities are 2nd and 3rd order (if not more) activities associated with economic activity. They are also, as public goods, not useful for providing advantage in 1st order activity.

So, given that they (public goods) are Nth order aspects of 1st order economic markets, can spending and allocation toward public goods be determined by an Nth order market? And, can alloations at the Nth level of economic systems be used as
indicators and predictors of 1st order economic markets.

My wording here is somewhat clumsy, still trying to work it out, I guess.

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