Sept. 28 – Private vs. Public Goods

ryanBell Ringers, Economics(BR)

Sept. 28 – Private vs. Public Goods



On Sept. 28, 2008, SpaceX launched the first private spacecraft.



Exploration has always been a risky business. Things that are good for the public, but where the risk, or the benefit is not easily calculated or maintained, are often funded by the government. These are called public goods.

Space travel had been a public good since it commenced with the launch of Sputnik by the Soviet Union in 1957. While governments are good at raising massive amounts of money for risky projects (after all, they simply raise it as taxes or borrow it as debt), they are rarely good at efficient use of resources.

Entrepreneurs, by contrast, excel at measuring costs against benefits, and creating efficient ways of doing something. Many companies thrive not because they invented something new, but rather because they created a lower-cost way of doing something commonplace.

Space travel is rapidly moving in this direction. SpaceX is competing with governments to launch satellites into space at a much lower cost, with greater reliability. It may be that a private company is the first to go to Mars, ahead of any government!


Questions:
  1. How should we decide when to allow a good or service to be provided by the government, as opposed to allowing entrepreneurs and the private market to provide it?
  2. Do you think space travel will be commercialized? Would you like to ride into space in your lifetime?

Image Citation:

20, Sept. 2018, Spacex Wallpaper [Digital image].  Retrieved from <google.com>.