An Austrian Re-assement of the Theory of ‘Public Goods’: What Is Left (and Right)?

This chapter is motivated by the following questions: what are the implications of an Austrian reassessment of the theory of public goods? What would be left to say that’s right about public goods? The implicit assumption in the theory of public goods being utilized is to frame it in terms of an outcome of its emergence, and neglects to address the process by which so-called “public goods” emerge. By redirecting our focus on this cumulative process, this sheds light on two important points: the non-rivalrous aspect of public goods are a by-product of overcoming rivalry in the first place, via the endogenous formation of excludability mechanisms. Secondly, and therefore, an Austrian reassessment of the theory of public goods completely transcends the inherent distinction between public and private goods, and with it, negates the economic justification of the state.