mises.ca / By David Howden / Wednesday, October 13th, 2013
Being proud of and enjoying the subway does not imply that,
1) it should be publicly provided for by tax dollars, and
2) the federal government should be funding it.
Both of these tenets are relevant at the moment as the Toronto subway expansion gets closer to approval and the Harper administration pledges funding for the project.
In standard microeconomic analysis, publicly-provided goods are one solution to a two-faced problem. First, when goods are non-excludable, in the sense that providers cannot stop users from enjoying their services, producers must resort to alternative measures to ration their usage. Second, when goods are non-rivalled, in the sense that one person enjoying a good does not interfere with another person’s enjoyment of the same, it becomes questionable why we should stop some people from enjoying the services provided.
Thanks to BrotherJohnF