An Austrian Re-assement of the Theory of ‘Public Goods’: What Is Left (and Right)?
A Research Agenda for Austrian Economics, edited by Steven Horwitz and Louis Rouanet, Forthcoming
26 Pages Posted: 14 Jun 2021 Last revised: 16 Sep 2021
Date Written: June 3, 2021
This chapter is motivated by the following questions: what are the implications of an Austrian reassessment of the theory of public goods? What would be left to say that’s right about public goods? The implicit assumption in the theory of public goods being utilized is to frame it in terms of an outcome of its emergence, and neglects to address the process by which so-called “public goods” emerge. By redirecting our focus on this cumulative process, this sheds light on two important points: the non-rivalrous aspect of public goods are a by-product of overcoming rivalry in the first place, via the endogenous formation of excludability mechanisms. Secondly, and therefore, an Austrian reassessment of the theory of public goods completely transcends the inherent distinction between public and private goods, and with it, negates the economic justification of the state.
Keywords: Austrian Economics; Public Goods; Rivalry
JEL Classification: B51; H12; P52
Suggested Citation: Suggested Citation