The Privatization of Roads and Highways - Ludwig von Mises Institute

Public Goods and Externalities: The Case of Roads 123
no worse off; yet this does not imply that broadcasting should,
in a normative sense, be a public good. . . . The difference
between defense and broadcasting is subtle but important. In
both cases there is a problem of determining the optimal level
of outputs and the corresponding level of benefits taxes. In the
broadcasting case, however, A may be quite willing to pay more
taxes than B, even if both have the same “ability to pay”
(assuming that the benefits are determinate). Defense is another
question. Here A is not content that B should pay less. A makes
the social judgment that B’s preference should be the same. A’s
preference, expressed as an annual defense expenditure such as
$42.7 billion and representing the majority view, thus determines
the level of defense. Here the A’s may feel that the B’s
should pay the same amount of benefits tax. 36
Troubling and puzzling is the importation of value judgments
into the analysis. It would appear that the concept of “public
good” was offered in a scientific, not a normative sense. What,
then, are we to make of the statement, “Broadcasting should, in a
normative sense, be a public good”? In the spirit of the definitions
offered, one would have thought that broadcasting (or any
other service or good) either is or is not a public good, and that
normative judgments were beside the point. This is not the case,
however, for later in the quote we learn that A’s “social judgment”
is all that is necessary to justify that B “should pay” for
national defense. But what is a “social judgment” as opposed to,
for example, a “private judgment”? And by what authority can
A, a mere individual, make a “social judgment,” whatever that
is? Suppose that it is A’s considered “social judgment” that B
should, through taxes, pay for can openers. Does that judgment
automatically convert these implements into collective goods?
Moreover, why need we assume that A is content that B pay less
taxes for radio, but not for defense? May we not reverse this and
assume that although A is willing that B pay less for defense, he is
not so inclined when it comes to radio? Is there anything intrinsic
36Tiebout, “A Pure Theory of Local Expenditures,” p. 417; emphasis
added.