Econoclasm: Lesson four

I will interrupt myself here to note that yes, there are people who are pursuing economics as an empirical science, and they have indeed demonstrated that the so-called neo-classical economic theory as taught to first-year college students is not a description of the real world. My point in this presentation is that many people, including journalists and politicians, believe that it is. This pernicious falsehood horribly contaminates public discourse. So yes, it does require debunking. There are a couple of additional problems with the concept of the free market that don ’t stem directly from the faulty assumptions. One is called “public goods.” These are goods that are “non-excludable,” which means that nobody owns them and you can’t require people to pay to use them; and non-rivalrous, which means that one person’s use of them does not deplete them f or others. An example is the oxygen in the air, but many public goods are created or protected by public policy. Straightforward examples are national defense and law enforcement, although obviously we can disagree about how much and what kinds of these goods we should be buying, and how to allocate the cost. Many public goods are created because they are thought to have positive externalities, that is they benefit all or most people beyond their direct recipients. Examples are public education and national parks. (Even if there are admission fees, they amount to far less than the actual cost of maintain...
Source: Stayin' Alive - Category: American Health Source Type: blogs