A Stitch in Haste

Compare and contrast these two passages:

David Brooks in NYT Magazine:

Socialism has stopped its march. Now almost every leading politician accepts that government should not interfere with the basic mechanisms of the market system. On the other hand, almost every leading official acknowledges that we should have as much of a welfare state as we can afford. Now the debate over the role of the state takes place within much narrower parameters.

PolicyGuy:

The Village of Bolingbrook, a distant suburb of Chicago, now has its own, village-run golf course. It sure looks nice, and at $65 a round (a discounted rate for village residents), it flunks the "affordability" test, at least for hackers like me. So what was the rationalization offered here? The municipal government needs to build a luxury golf course to distinguish its city from everyone else.

If the "parameters" within which Democrats and Republicans debate don't include whether public luxury golf courses are appropriate, then a third major party -- a small-l libertarian third major party, is inevitable.

To review: The government has no business providing any goods other than public goods. A public good is one that is neither excludable (I can withhold a cheeseburger from you if you do not pay for it) nor rivalrous (a cheeseburger cannot be consumed simultaneously by more than one person).

One instance where this seemingly obvious distinction between public and private goods gets conveniently befuddled is where a good is excludable but is not strictly rivalrous -- so-called club goods. Two separate people can each be excluded from a 200-seat movie theater, but they can also both watch the movie non-rivalrously (though 201 people cannot).

There is a robust economic science to club goods: how to price, when to expand, whether to price uniformly or engage in price discrimination. But one underlying truth remains: Club goods are not public goods. There is consequently no basis, none whatsoever, for the government to provide club goods. At most, the poor (and only the poor) can be subsidized to enable them to "join the club." But the line between welfare finance and outright public provision should never be crossed.

No one (I hope) would suggest that governments should own and operate movie theaters. Libraries, on the other hand, are also club goods (they're excludable just as movie theaters are), but most people (not most libertarians!) overlook this on dubious "positive externality" grounds (i.e., that a public library is more akin to a public school than a movie theater). On the other other hand, such positive externality arguments completely evaporate when public libraries engage in ancillary operations such a DVD rentals -- who would dare suggest that a Netflix subscription is somehow a public good?

Now, armed with that:

Golfers' wishes outweighed the argument for turning Jackson's [Mississippi] two public golf courses over to a private management company, Mayor Frank Melton said Wednesday.

You remember Frank Melton, right? He's the Hugo Chavez wannabe who seizes children on highways for group hugs and was warned by both the federal Justice Department and the state attorney general to stop impersonating a police officer (complete with firearms).

Melton later said he decided not to approve privatization of the Sonny Guy and Grove Park courses because he was not sure the city actually was losing money operating the courses.

"This is not a decision that needs to be made from City Hall. It needs to be made by the customers," Melton said. "I have asked them to come up with a list of things that need to be done (at the courses)."

Strange, I always thought the "customers" of government were the population generally and taxpayers specifically. Apparently not -- apparently city government now works strictly for golfers.

Grove Park and Sonny Guy golf courses lose about $300,000 annually.

Apparently Melton didn't get that memo. In any case, every taxpayer who does not use the golf course is subsidizing every person, taxpayer or otherwise, who does. All in the name of providing a supposedly "public good."

The only reason golf courses seem to get a waiver from the basic proposition that club goods should be strictly privately provided is of course because it is mostly a middle class pastime. If doctors, lawyers and stockbrokers played hopscotch (and if hopscotch were an expensive hobby), then we would no doubt see many municipal hopscotch parks -- on the grounds that hopscotch was, somehow, a "public good."

Perhaps class warriors like John Edwards ought to spend less time asking whether the rich can pay ever more taxes and instead ask mayors like Frank Melton (a Democrat, incidentally) why the poor are taxed so the not-poor can save on their greens fees and cart rentals.

(Via Out of Control.)

Recently I tried to explain that club goods are not public goods and therefore are inappropriate uses of taxpayer money. I chose as my illustration municipal golf courses and submitted the hardly controversial thesis that those who use a golf course — and only those who use it — should be the ones who actually pay for it.

It surprised me to learn that golf might not have been the best example for my predominantly male, educated, middle-class (or higher) audience. Too many commenters just couldn't divest themselves of the false notion that golf is somehow "different." Some invoked the expense of the sport; others the popularity.

I stick to my guns: municipal golf courses are an entirely improper government function. Demand creates its own supply. If there is a demand for a golf course (and no unduly burdensome government restrictions such as oppressive zoning), then private entrepreneurs will build one. The poor, meanwhile, can be given vouchers (the propriety of which would be a whole other blogpost).

But for those who need a less personally relevant example than golf, might I suggest instead the impropriety of — municipal water parks?

Everyone, it seems, wants a local water park.
...
Water parks are fun and a positive way for kids and families to spend time together.

Water parks, once built, are always a hit. Waseca's new outdoor water park has had higher use than expected. The same has been true of most parks opened in any city.

They are also expensive. The private sector can, in some cases, justify building a water park — particularly as part of a hotel project. But there are few cases where a large publicly available water park can be built and operated as a profitable private venture.

The proposed solution, you can easily foresee, is taxpayer subsidization. The pesky fact that some taxpayers might not actually want or be able to use a water park is blanked out (the sly difference, incidentally, between "everyone" and "everyone, it seems").

Soak yourself in that very wet reasoning: Water parks are "always a hit," but no so much a hit that enough people are actually willing to pay enough money to actually visit them? Water parks are such a "hit" — that we need to tax people against their will to provide them?

Could you imagine a politician or bureaucrat suggesting that Justin Timberlake concerts should be taxpayer-subsidized, because he's "always a hit"? Of course not — indeed it's usually the opposite argument: we supposedly need to subsidize the arts precisely because they're not "always a hit" (i.e., we need to give taxpayer money to crappy artists precisely because they're crappy; that too would be a whole other blogpost).

Water traps or water parks, it makes no difference: Those who partake of club goods should be the ones who pay for them. Leave the unwilling taxpayer out of it.

(Via Market Power.)