In this publication, I have be playing loose with the term Public Goods. I am writing about the things we hold in common, how valuable they are, and how to protect and amplify them. Let’s be clear about what these terms mean, and where they come from.
Economists have solid, but limiting, definitions for Public Goods and Commons that are widely accepted, so we should start there.
A Public Good is “non-excludable” and “non-rival”. You can’t exclude someone from enjoying the light and warmth of the Sun (“non-excludable”) and no matter how much you enjoy it, everyone else can enjoy it just as much (“non-rival”).
A Commons is “non-excludable” and “rival”. You can’t exclude someone from walking down the street on a sunny day (“non-excludable”), but if too many people try to walk down that same street, it will become crowded and everyone will be slowed down (“rival”).
A Private Good, for contrast, is both “excludable” and “rival”. I can exclude you from taking a walk in my shoes on a sunny day, and if I am walking in my shoes, no one else can walk in them at the same time.
The private default
Taking a step back, there is something self-defeating in the Econ 101 definition of public goods and commons. Non-rival and non-excludable are negative definitions, implying that rival and excludable private goods are the norm from which public goods and commons depart. In fact, the term “goods” was for centuries used to describe only private possessions, implying that most goodness was found in the things that benefit one person over another. It was only in the 1950s that economist Paul Samuelson introduced the concept of Public Goods. This private-normative language hobbles our thinking about public goods.
Public goods are in fact the norm from which private goods depart. Private property is a very useful and powerful social construct. From the moment, eons ago, when a two-year-old, somewhere in Africa’s Great Rift Valley, first snatched a toy from another child and yelled “MINE!”, to the codification of that claim in social norms, laws, state violence, and recently cryptography, private goods have claimed most of our attention. Much of what we want that the natural world does not provide has so far been made possible by private goods. Whether that was inevitable is an interesting question (RIP David Graeber), but it is a fact. Yet, we still overwhelmingly depend on public goods for our welfare and happiness.
Public goods, in aggregate, are more valuable than private goods
Big public goods include the environment (aka “ecosystem services”), knowledge, culture, language, laws, and almost all services provided by governments. These are terribly difficult to value in the same way that discrete private goods are valued (a problem in and of itself), but we will keep trying as the value of public goods is core to what this publication is about. Ecosystem services alone are thought to be worth ~$150T annually. A private asset, like a factory, that generated $150T/year might be worth 10x that much, so we are already in the quadrillions of dollars before taking into account the many other forms of public goods.
A private asset, like a factory, that generated $150T/year might be worth 10x that much, so we are already in the quadrillions of dollars.
The value of private property is easier to approximate by combining listed (“publicly” traded) stock in companies (~$100T) with unlisted business asset value (~$200T), and personal property like homes (~$200T) for a total of around $500T globally. That’s a small fraction of the quadrillions of dollars of public goods, though it’s also an incredible achievement of humanity that we could create even a small fraction of the value of what already exists in the world.
When thinking about private property, I like to think about it in terms of how it is kept exclusive: By literally holding it, by social norms, by state violence, or, in a few recent cases, cryptography.
If you want my shoes, and try to take them, I am going to make it hard for you. If I can’t dissuade you myself, I can appeal to anyone nearby to help me enforce our social norm that one is entitled to their own pair of shoes. And if that fails, I can appeal to the police whom we agree, in our laws, are allowed to use violence to protect my private property.
Among the most valuable of public goods are the laws and norms that protect private property.
So it follows that among the most valuable of public goods are the laws and norms that protect private property. You might even say that the value of just some of our laws which relate to property are the value of the private property they protect. Said differently, without public goods, there are no private goods, and public goods will always incorporate the value of private property by virtue of this dependency.
Having established, firmly, that private goods are just public goods that we accept the exclusivity of for many good reasons (including, crucially, that they might not exist if they weren’t private), we can be a bit more clear in our descriptions:
Most goods, which are all things that people derive some benefit from, anyone can benefit from. These are public goods.
There are some goods that we agree only some people can benefit from. These are private property.
Whether the good is rival (like a commons) is secondary to its exclusivity.
So from here on this publication will talk about public goods and private property.
What about private tech that benefits the public?
In the case of private property that benefits the public, like new technologies or non-profits like universities, the benefits might be public, but the properties that produce those benefits are not. So rather than talk about Wikipedia or Harvard as a public good, we should think of the benefits they produce as positive public externalities, the way you would talk about the impacts, positive or negative, of a private business on the environment or some other public good.
Powerful, new, usually private, technologies can amplify the value of private goods (door locks that protect your private home, AI that automates labor) and of public goods (traffic signals that make streets safer, satellites that monitor the environment). This is a particular interest I will come back to often in this publication.
To wrap, the point of this piece was to be clear on what we mean by public goods (everything valuable except private property) and why public goods, counter-intuitively, are more valuable than and fundamental to private property, and so worth understanding, celebrating, and defending.