National defense is the most common example cited as an economic public good. It is certainly the oldest public good, harking back to the times of kings and round tables, and even before. Allegiances were made, city walls built. But let’s see if it always meets the economists’ definition of providing a service that is non-excludable and non-rivalrous.
The name alone gives away that it is already a different something than, say, sunlight. Right off the bat the precursor ‘national’ tags the defense to a nation. So it is a service to one nation, excluding all outsiders. In this case being non-excludable really means the service cannot exclude citizens of the nation in question.
However, there also seems to be all sorts of exceptions to this rule. Take the Japanese Americans that were locked up during WWI. Around sixty-two percent of the internees were US citizens and yet a global conflict thrust them at odds with their nation. Recently Mike Pence criticised the President Obama Administration for not rescuing ISIS hostage Kayla Mueller. The claim being that this US citizen did not receive the protections of national defense that she and her family deserved.
Like any definition it only takes one counter example to throw the statement into question. Let’s consider whether the good is non-rivalrous: that the use of it by one consumer does not diminish the use of it by another. This seems right. Everyone in Philadelphia received the same protections against terrorism when Navy Seals took out Osama Bin Laden, as folks in Albuquerque. This mastermind of evil would do harm to any American which means his demise makes all Americans safer.
Yet, our history is riddle with military involvement in countries in efforts to preserve business interests abroad. In the early part of the twentieth century the US defense forces were repeatedly used in Nicaragua to protect business interests. Declarations against such activities include objecting to the use of a national resource to benefit a sub-group, the business community. (excludable) And since the military is run on a budget, the occupation of Nicaragua from 1912-1933 undoubtedly took away from expenditures on other national defense initiatives. The end goal of defending all citizens is rivalrous as there is always a menu of possible national pursuits that could drain the national purse.
It seems to me that there are no such things as goods that are solely for the public benefit. There are only goods, or rather goods and services. And those goods and services can be used by individuals or groups, for private or public objectives. Some goods, by nature, are more prone to be shared within groups. Some are more productively produced while strongly preserving private property rights. Groups with shared interests decide how to employ goods and services, where the groups can be as large as the human race all the way down to a couple.
Home Economics 