Wednesday, July 05, 2017

Perhaps News Is a Public Good

When I teach about public goods, I tell my students, "You have to get out of the mindset that 'public good' means 'government-provided good,' because it does not." In economics, a public good is any good which is non-rival and non-excludable.

If a good is non-rival, it means one party's use of the good does not diminish the user experience of any other party. A good is non-rival if it makes sense for you to ask, "Since you're already doing X, can I do it, too?" Of course you don't say to your friend, "Since you're already eating that sandwich, can I do it, too?" But you might say, "Since you're already watching that TV show, can I do it, too?"

A good is non-excludable if my provision of the good to one party is tantamount to providing it to all parties. I can't turn on the lights for just one person in a room; if I turn on the lights for one, the lights are on for all.

Many textbooks present a two-by-two matrix of possible classifications of goods based on whether or not they are excludable and rival. Like this:

To help reinforce my Prime Directive (Learn, Don't Memorize), I often tell students that I will constantly present the matrix to them one way but then on the exam have it the opposite way. However, that would involve remembering to always present it the same way in class, and I can't be bothered to remember crap like that.

Notice this analysis doesn't ask who provides what. Government can give away clothing and that does not move clothing from the "private goods" box to the "public goods" box. Nevertheless, there's a healthy percentage of my students who, when asked to identify the public good, select "a government-provided t-shirt." When economists call something a "public good," they don't mean that government is providing it, only that, without government provision, the amount provided will be inefficient (perhaps even zero).

The reason I mention all this is because Thomas Snyder writes in On Tyranny:

We find it natural that we pay for a plumber or a mechanic, but demand our news for free. If we did not pay for plumbing or auto repair, we would not expect to drink water or drive cars. Why then should we form our political judgment on the basis of zero investment? We get what we pay for. [p. 77]
Snyder isn't understanding excludability and rivalness. Plumbing and auto repair are private goods: when I pay for a mechanic, I am not necessarily providing one to everyone, and someone using a mechanic I've paid for leaves me with a worse service. But news isn't this way. That's why we think it natural to get our news for free.

Most solutions to the market failure associated with the under-provision of public goods involve government provision. When fire department protection was under-subscribed, fire departments became branches of local governments. So does this mean that news organizations should be paid for by government?

I started a new paragraph so that you'd have a split-second delay, and in that split-second delay, I think you probably thought of a million reasons this is a Very Bad Idea. (I've been reading A.A. Milne's Winnie-the-Pooh books to my youngest--he's actually waiting the end of this blog post typing so we can read a chapter of The House at Pooh Corner--and I see I've picked up Milne's habit of capitalizing Important Concepts and Terms.) It would destroy the First Amendment. Yet news seems to be a public good, and if we are concerned about under-informed voters (or--what's even worse in my book--what could be called uninformed-but-smugly-confident-they-are-actually-hyper-informed voters), we're not going to get a market solution to this problem.

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