In standard economics, the production of public goods is a real problem. Because public goods are nonrivalrous, they create value for people beside the producer; because they are nonexcludable, the producer has no way of charging for this extra value. Consequently, people won’t create as much value through public goods as they ought to. The standard solution that most economists arrive at is to compel the production of public goods through taxation and government production.
Why I should blog more
Why I should blog more
Why I should blog more
In standard economics, the production of public goods is a real problem. Because public goods are nonrivalrous, they create value for people beside the producer; because they are nonexcludable, the producer has no way of charging for this extra value. Consequently, people won’t create as much value through public goods as they ought to. The standard solution that most economists arrive at is to compel the production of public goods through taxation and government production.