|
Why does the government do what it
does? Governments in the United States, build and run
schools, libraries, and parks, but not gas stations,
clothing stores, or grocery stores? Why some things and not
other things? Does it make sense or is it just random?
We have learned that competitve
markets achieve efficiency, both allocative and productive.
And we learned that compeititve markets have a limited role
for government. So why does the government do schools,
libraries, and parks, and we could add roads, bridges,
airports, football stadiums, and vaccinations. Why these
things and not other things? Why not let private businesses
do these things like they do gas stations, clothing stores,
and grocery stores?
If markets are efficient, then, if
the government is doing something rather than the market, WE
SHOULD ASK, WHY?
In this lesson you will learn two
reasons that explain much of why the government does what it
does: POSITIVE EXTERNALITIES and PUBLIC GOODS.
One other interesting question:
public schools, public libraries, and public parks
ARE NOT PUBLIC GOODS. Why not?
|
