There is a common idea of there being two types of goods; private goods, such as a house or car, and public goods, such as fireworks displays, lighthouses, and national defense. I believe we all know the definition of a private good, but here is the definition of a public good; a good that cannot someone cannot be excluded from, meaning that there would be little profit made from such a good, and is thus provided by the government so that there wouldn’t be a lack of that particular good. Now that we have our definition, I would like to argue that public goods do not have to be provided by the government in order for them to exist.
As our first example, a lighthouse. Imagine a rocky coastline, with powerful breakers crashing upon it, capable of dashing any ship that came too close to pieces. Now imagine that there is a fishing town near that dangerous coastline, and the fishermen going out into the ocean to, well, fish, were in danger of being sunk. It would obviously be in the fishermen’s interest to be able to safely bring man and cargo back to the harbor as much as possible, since every time a ship went down, they lost not only the ship, but the cargo and potentially many if not all of their skilled workers that had manned the vessel. So, the fishermen would build a lighthouse to warn them of the fatal wall of rock so that they could avoid it in future. Thus, the losses of the fishermen are reduced, as well as the danger to their lives. They benefited from the lighthouse, and so they built it. A lighthouse, even though its a non-excludable, “public” good, as fishermen from another village can benefit from it as well, it did not have to be provided by the state, or the civil government.
Now how about a fireworks display. Can someone stop me from viewing it from my back porch? No. Thus, it doesn’t make too much sense for someone to charge money to let me sit on the green field with the perfect view of the display, since I can watch it pretty well from anywhere. So, it doesn’t look like the person hosting the display can make a profit from this colorfully explosive event. So, of course, this means fireworks displays will be non-existent? Not in the least! Most people enjoy fireworks, and, so, they would take time to sit out at night in some field and watch them go off. Now, just imagine that, in any free economy, there would be lots of businesses just dying to serve you. They would be thrilled to give towards a local fireworks display so long as their name was put up on some sign somewhere on that big grassy field and in a list of sponsors! There is a chance that you’ll need a service and then remember their name from when you watched that display. So, fireworks displays would be provided quite well by private businesses looking to make a profit later on. So, fireworks simply do not need to be provided by the government. In fact, companies and corporations actually do sponsor such events, as well as more publicly seen events such as NASCAR races or baseball games.
So, we’ve given two examples of public goods that have been used to support government supply of such goods, and they have been, I hope, proven to be just as easily provided by the private sector. If its in the best interest of those people around, some one will figure out how best to implement it.