An 'Existence Proof' of Public Goods

Abstract

It is often asserted that public goods either do not ‘exist’, or that goods exist on some kind of vague spectrum between “purely public” and “purely private” goods. This is because of a conceptual muddling between public goods and private goods. I present a new conceptual framework for distinguishing between public goods and private goods, preserving the original definitions but clarifying why a public good is fundamentally different than a private good. Namely, I introduce the concept of a mass function, and the import the Law of Conservation of Mass from physics, to demonstrate that a public good must have zero mass. In other words, public goods are immaterial. Thus, not only do pure public goods ‘exist’ (in the sense that they are a distinct concept with a real-world analog), but are fairly easy to identify. I then discuss why, under this new understanding, the standard treatments of public goods are misguided—specifically, how public goods can be and often are provided without government intervention.

Keywords: public goods, private goods, econophysics, reification

JEL Classification: H410, Z100, Z180