There’s an excellent bakery in a little strip mall down the interstate from where I live. The jumbo donut holes melt in your mouth. I’m not sure if it is the glaze on the golden globes, but the texture and flavor and softness is memorable. The store front is small. A twelve foot display counter full of long johns, and bear claws and jelly donuts (my husbands favorite) reveals the day’s offering as you walk through the door.
A middle aged guy runs the place and when he plans the baking for the next day, I’ll bet he’s trying for that ultimate mix of filling the expectations of the steady stream of regulars who filter in, yet not having any pastries left at 11 am when he flips the ‘closed’ sign on the glass door and locks up.
The point is that nothing really bad happens if he doesn’t get it quite right. He might have to take a dozen treats home or give them to the food shelf. Or he may have lost out on some sales if he was too conservative and didn’t bake enough. A few dollars either way, but no one dies because he miscounted his jumbo cinnamon rolls.
That’s why bakery goods are an ideal private good. Their production and consumption are individualized. Everyone can have their favorite. Products that tend to be well suited to public good, by contrast, usually involve groups, either because they service groups, like infrastructure, or because they require a group consensus on their production, like education standards.
To further complicate things, group opinions vary by region and demographic. In order to accommodate these features, the fine tuning of say the reopening of schools, is pushed all the way down to the school district level. The standard for how a community agrees to educate their K12 population during a pandemic is placed into, let’s call it, a first tier group. Not the county, or the state, or the region, or the country.
Unlike the provision of apple strudels, errors involving health and safety can result in physical harm. There’s more at stake than a few bills in a till. And there is often no unique measure to dictate exactly how to proceed—which is exactly why it’s been delegated to a public good. How safe is safe enough; how much school is school enough; how much protection is protection enough? And as a group we are both anonymous and participatory in the decision process.
And as this is a big messy political endeavor, it is much more difficult to ascertain whether errors of commissions, or errors of omissions occur in taking a run at the most efficient social outcome.
Home Economics 