Aug 23 2010

From public to private – what’s next, lighthouses?

Published by at 5:24 pm under Market failure,Public goods

In both IB and AP Economics, students will learn in their Market Failure unit about a particular type of good that private companies have never found it profitable to produce, and which therefore would not be provided to consumers if it were not for the government. A public good is one that is non-rivalrous in consumption and non-exclusive in production. In other words, if one person enjoys the benefits of such a good, this does not exclude others from enjoying it as well. Additionally, once such a good is produced, the producer finds it impossible to exclude particular people from enjoying its benefits.
Examples of public goods include sidewalks, streetlights, public art, light houses and, up until now at least, park benches. I’ve always used park benches as an example of a typical good that is both non-rivalrous and non-exclusive. If you sit on a park bench for ten or fifteen minutes and then get up and walk away, the bench is still there for whoever comes along next to enjoy! Also, once a city or state or national government has placed a bench in a park, it is nearly impossible to exclude anyone from using it. These characteristics make park benches a pretty good example of a public good, they are both non-rivalrous in consumption and non-excludable in production.  Because of this, this is a common sight in many cities’ parks:
Well, I have some bad news for bums and sleepy park visitors the world over. The era of lazy naps on park benches may be coming to an end.  The video below shows the invention of a German designer that may soon be coming to a park near you. The funny thing is, I used to joke in my classes that even park benches could be made into private goods if someone could devise a mechanism  by which metal spikes would prevent passersby from using the bench unless they inserted a coin into a slot, causing the spike to retract and the bench to become usable. Well, my humorous image has come to life!
[vimeo width=”600″ height=”450″]http://vimeo.com/1665301[/vimeo]
Discussion questions:
  1. How does the device turn a park bench, which is traditionally a public good, into a private good?
  2. Can you think of other means by which a private firm may be willing to provide park benches without resorting to metal spikes?
  3. Would you be willing to pay 50 cents to use a park bench for 10 minutes if there were no more public benches in city parks? If not, is there any place you would be willing to pay to sit down?
  4. Identify an example of another good or service that traditionally was provided by government but you now must pay for in some places. Is there anything wrong with making people pay to use goods and services that they truly enjoy the benefit of? Are there some things that should never be privatized? Discuss.

About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

15 responses so far

15 Responses to “From public to private – what’s next, lighthouses?”

  1. Andyon 24 Aug 2010 at 5:58 am

    Apparently this was a German art project, there were several articles about it actually being used in China.

    http://web.orange.co.uk/article/quirkies/New_benc

    Do you think that's for real? I didn't do enough research to confirm

  2. Sam Baronon 25 Aug 2010 at 5:17 am

    1. I Believe that public goods defined are goods that have been payed for by the government using taxpayers money and the people of that country have the right to use it whenever they want, if someone decides to pay for a bench for themselves, then they decide to who gets to use it; in this case it is anyone who pays for the privilege of the spikes being let down and so the spikes determine who uses it.

    2.One way that a private firm could provide a park bench without having to charge for use is if they sold advertising rights for the bench or used the bench to advertise themselves, then there would be a worthwhile use for paying money to produce the bench i.e. profit is turned.

    3.Personally I would not pay for a park bench because I don't use the service even when it is available for 'free'. There are places where sitting down is worth money but it comes with a price you have already payed, for example on the bus, if I had to pay a small amount like 10 rappen to sit on the bus then I would but currently sitting down is included in the bus fare.

    4. In some areas the public toilets have been privatised, I would imagine it was because the government didn't want to pay the salary of the attendant or cleaner and handed the rights to a corporation, there are still many public toilets but they are increasingly becoming privatised.

    I wouldn't say that I enjoy any of the services that the government provides as they are all necessities and earlier in the post it said that public goods were non-rivalrous in consumption which means that if any of them were truly enjoyable then they would already be completely privatised because corporations would be able to make a lot of money of something that people enjoy.

    I believe that public benches should never be privatised along with many other useful public services because if we start charging money for all of these relatively cost free services then what are we becoming? Are we forgetting the reason public services were created? To help the people, and if some people can't afford to pay or dont have any money on them then the service isn't helping the people, its helping most people.

  3. Mr. Doubton 30 Aug 2010 at 10:18 am

    Yes. Single Track!

    I rode many uninterrupted kilometres of surprisingly technical single track yesterday (nearly 3 hours of too skinny to pass your buddy single track). Public access to public land is an undervalued commodity. Let the Saskatoon river banks never become private land.

    Kids – get to work!

  4. Julia Harrisonon 26 Sep 2010 at 11:49 pm

    1. How does the device turn a park bench, which is traditionally a public good, into a private good?

    The device turns the park bench into a private property by making it something that you have to pay for. The benches are now owned by they are private company so if you vandalize or disagree with the new technology you will be disobeying the law, therefore committing a crime.

    2. Can you think of other means by which a private firm may be willing to provide park benches without resorting to metal spikes?

    A company could have an attendant who comes by the benches and chargers people for sitting on the bend. An example of this is deck chairs in Hyde Park London and on UK beaches.

    3. Would you be willing to pay 50 cents to use a park bench for 10 minutes if there were no more public benches in city parks? If not, is there any place you would be willing to pay to sit down?

    I would be willing to pay for the bench depending on the condition of the bench such as comfort and if the ground I would not want to sit on the ground.

    If not I would be willing to pay for such things as sitting down in a nice cafés where it is more expensive to sit down than to be served standing at the bar.

    4. Identify an example of another good or service that traditionally was provided by government but you now must pay for in some places. Is there anything wrong with making people pay to use goods and services that they truly enjoy the benefit of? Are there some things that should never be privatized? Discuss.

    An example is the new congestion charge which is applied for non hybrid motorists driving into the center of London. Previously there was no charge for using central London roads. In this particular case there is nothing wrong with charging people to cross the city as it decreases the amount of traffic and pollution. Whereas I believe charging for park common park bench is inappropriate.

    There are many things that should never be privatized such as the public sewage system, street lighting and snow clearing in the winter. These services should never be privatized because they are important to the health and safety of the general public. No one person would be willing to pay for everyone.

  5. LauraLisaMisharion 02 Mar 2011 at 11:16 am

    1. How does the device turn a park bench, which is traditionally a public good, into a private good?

    eliminated positive externalities, not everyone can now afford to sit on the park bench

    2. Can you think of other means by which a private firm may be willing to provide park benches without resorting to metal spikes?

    designated area of benches, pay to enter the assigned area

    3. Would you be willing to pay 50 cents to use a park bench for 10 minutes if there were no more public benches in city parks? If not, is there any place you would be willing to pay to sit down?

    NO. If the surroundings are worth paying to sit around, we'd be willing to pay (like bars, pubs)

    4. Identify an example of another good or service that traditionally was provided by government but you now must pay for in some places. Is there anything wrong with making people pay to use goods and services that they truly enjoy the benefit of? Are there some things that should never be privatized? Discuss.

    Public bathrooms now cost 1 franc, which is bad because people can't even afford to pee anymore. But the good side is that the bathrooms are now cleaner, as they are more exclusive and we pay for cleaning service.

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