In standard economics, the production of public goods is a real problem. Because public goods are nonrivalrous, they create value for people beside the producer; because they are nonexcludable, the producer has no way of charging for this extra value. Consequently, people won’t create as much value through public goods as they ought to. The standard solution that most economists arrive at is to compel the production of public goods through taxation and government production.
Economists are frequently ridiculed for their failure to understand the alleged “human” factor in human behavior. Humans are not rational automatons, we are told, but evolved social beings with confounding foibles that make a strict rational actor model incomplete. But it’s striking that amid all of this ridicule and condescension from the rest of society, the public goods problem has emerged relatively unscathed. People still think that the public goods problem is a problem.
The naïve view of public goods is often at odds with reality, however. This is especially so when one considers the things we might care most about: our jobs and relationships. In modern society, better jobs and relationships are often the reward for the production of positive externalities. As it turns out, people like to work and socialize with those who create value for others.
This effect is pretty strong. Can you name a person who ended up poor and unhappy because they devoted too many resources to the voluntary production of public goods of actual value to the rest of society? I can’t, at least not off the top of my head.
My standard advice for those few younger people who ask me for it is simply to produce a lot of external value. Don’t worry about being compensated for it right away. If you succeed in producing things that are of value to others, they will want you around, and you will have plenty of rewarding opportunities you would not have had otherwise.
So I resolve to follow my own advice. I’m not claiming that my blog posts are revolutionary, but some people seem to enjoy them, and I like making people happy. Therefore I am planning to blog more. Check back soon, and in the meantime feel free to consider this a request for requests.