A note on the evolution of public goods

Ambrogio Lorenzetti painted this fresco on Good Government in Palazzo Pubblico, Siena. It’s a famous landmark in Western painting, argued by some to herald the Renaissance. Interesting that it should be so preoccupied by public goods.

I’ve been touring Europe with my son for the last couple of weeks. It’s been fun. I don’t have much time but thought I’d put down this marker. It’s nothing really new, but one of my objections to the way in which much of the right develop their ideas on governments’ provision of public goods is that they’re somehow a fixed set of duties – and of course ones that are terribly susceptible to ‘creep’. This means that new departures in government activity are always looked on askance. We must be vigilant against this creeping extension of government functions. Of course they have a point. Governments immediately rushing to the rescue with soundbites, and often a ‘plan’ whenever something nasty turns up on the news is not a pretty sight.

Nevertheless the implication is usually that the role of the state should be largely frozen in time. It’s a night watchman. It enforces laws, might do some redistribution or at least poor relief, but elsewhere governments venture at their (or perhaps our) peril.

Yet with social and technological change the nature of public goods is always evolving – as is the nature of private goods. Two of the sights we’ve seen mark the evolution of public goods which was such a crucial part of the development of our modern economy. We visited the Bank of England on Threadneedle St (I thought it had a museum of monetary history, which I was happy to take Alex to, but alas it turned out to be a museum of the Bank of England which was not so suitable for a 14 year old) and Greenwich. Both were sites were new public goods evolved. Harrison’s clocks delivered a means of measuring longitude at sea (am I the only one who’s gone through his whole life pronouncing longitude as longDitude? How did that happen?). And the Bank of England evolved from a private consortium lending funding the public debt to a central bank.

And today we are evolving new publc goods – many, as with the Bank of England initially – via private endeavour. And governments and those in private endeavour will need to continue experimenting to develop the public goods of the future.

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6 Responses to A note on the evolution of public goods

  1. Paul Frijters says:

    More fundamentally, the whole image of the night-watchman idea is one of government ‘interference’ with an otherwise perfectly good system. One of the real eye-openers for me as a PhD student in economics was to learn that a lot of business regulation happened at the request and, indeed, furious lobbying of business. I learned that it was a myth to think of government as somehow removed from the rest of society but rather that if it wouldn’t come in on its own volition on issues, then it would be dragged in kicking and screaming anyway.
    Happy holidays!

    • Tel says:

      Which business and where and why?

      Of course the established incumbents will lobby for regulation that protects the status quo. You would hardly expect a business to encourage competitors.

  2. Patrick says:

    As someone ‘of the right’ and who is superficially quite fond of the night-watchman idea, I actually agree with you.

    My main focus is not so much limiting the scope of what government regulates, nor even the scope of what it pays for, but the scope of what it does.

  3. Nicholas Gruen says:

    Yes, a pretty fair point. I suspect that the way the public sector is now configured – as the most secure and (therefore?) timeserving workforce in our society – it’s useful for a smaller proportion of activities as a share of all activities than ever. I wonder if it will ever change. That’s a genuine question, as while I disagree with the degree of job security in the public sector, just giving more power to those who’ve managed to claw their way to the top of the sector may not be a big step forward.

    • Pedro says:

      My first mother in law worked for the Australia Post and Telecom Promotions Appeal Board. I thought that said quite a lot about the public service.

      • Nicholas Gruen says:

        Yes, fair point. It’s a good idea, or a ‘good thought’ as it were I guess, but rapidly degraded by the careerism and legalism of the system.

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