Abstract
In economics, the concepts of public goods and private goods are different from those of public property rights and private property rights. The latter concepts refer to legal rights, while the former refers to goods that have some kinds of natural feature which makes them more suitable to certain arrangements of property rights. This chapter discusses the influences of harvesting costs and exclusiveness costs on the public or private nature of an economic good, and what kind of property rights institutions suits different goods. When harvesting and exclusiveness costs or their combinations change, related institutions may have to change as well. This approach shows that choices of property rights institution are best made not on the basis of ideological inclination but based on costs which affect the public or private nature of goods.
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- 1.
This apparently can be a theme of another work.
- 2.
In the real world, things are not that simple. People often use other natural resources in order to obtain some natural resource. For example, people first occupied waterside land so as to access to water resources. We can still use the above methods to analyze whether the land is “a non-scarce natural resource” or “a scarce public resource,” as well as whether it is proper for establishing personal property. But more importantly, we can use the method of “which is scarcer” for making judgment. More generally, suppose there is a natural resource A, if the scarcity of the resource to obtain resource A is higher than the scarcity of the resource A itself, the natural resource A generally belongs to the owner of the resource which can obtain resource A, no matter this obtaining resource is labor or other natural resources. Therefore, in traditional societies, water rights belong to investors of the water diversion project, or as the cum-rights of riparian land rights (i.e., riparian rights). Certainly, this tends to arouse people’s illusions—they think the constraint on resource supply caused by the scarcity of resources to obtain that resource is caused by the scarcity of the resource itself. They mistakenly take the rights to resources obtaining the resource for the rights to own the resource itself, just as they call the right to water from a headwater channel “water right.” But this “water right” has nothing to do with the scarcity of water resources itself. Similarly, with the decline in the cost of water engineering, water resources become scarce, at this point, the rule of “he who invests owns water rights,” or “he who occupies the river bank owns water rights” is no longer efficient.
- 3.
Here, the harvesting cost does not include the cost of obtaining resources from others, thus the holding cost does not include the cost of preventing others. For simplicity, we remove the factor of pillage in this article.
- 4.
As for this judgment, the author asked Professor Wang Hao, a water resource expert, and received positive reply.
References
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(Translated from The Review of New Political Economy (《新政治经济学评论》), Volume 1, Zhejiang University Press, 2005).
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Hong, S. (2020). When Public Goods Become Private Goods. In: Vision and Calculation. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-15-2898-9_3
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DOI: https://doi.org/10.1007/978-981-15-2898-9_3
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