Economics Govt. question!?

Question

A frequent argument in support of government-produced goods is that they are vital to social welfare and therefore their provision cannot safely be left to the "whims" of the marketplace. Does this explain why parks and libraries are usually municipal services, whereas food and medical care are usually secured through the market?

Answer 1

Probably not in total, as in the short run you can survive without parks, and realistically, a book rental service could be run affordably at a relatively low cost per unit.   Yes, libraries are important public institutions, but private sector social welfare organizations could run them without a lot of trouble if they didn't exist.   I think the better argument for public parks and libraries is the notion of a public good, where it is difficult as a society to exclude poor people from the use of the facility based on inability to pay.  With libraries we have the added value of it being an investment by the public that should pay dividends in terms of greater tax revenue from the patrons who use it to improve their economic circumstances by self directed education.

The government produced goods that come to mind in your example are roads and water systems and other vital infrastructure that citizens cannot tolerate the loss of, even for one day.   In the past, they seemed to lend themselves to monopoly ownership as the most efficient delivery model, so it became a natural thing to have the government produce them through tax revenue, and you get the added benefit, as with libraries, in offering their unfettered "free" use as a point of economic opportunity.

I think the core values of freedom of movement and economic opportunity helped drive our decisions on public goods.