Lecture 8 POLS 207Outline of Last Lecture: Constitutional Amendments and the Commerce ClauseI. The Seventeenth AmendmentA. Undercuts Federalist argumentB. Introduces disconnect between state governments and the peopleC. Article 1:8 – “Congress shall have the power to…”II. The Nineteenth AmendmentA. Political gender gapB. Diversified electorateIII. The Power to Regulate Commerce (Commerce Clause)A. Great Depression/New DealB. United States v. LopezOutline of Current Lecture: Why Governments Provide Goods and Services to CitizensI. “Public goods”A. “Non-exclusion”B. “Non-exhaustion”C. Collective benefitsD. Redistributive goodsE. Regulatory goodsCurrent Lecture:See Halter chapter 10:199-200 for elaboration on “why do governments provide some goods/services to citizens?”Halter attempts to explain what governments do without relying on a “political” or “process” explanation.Instead you can explain what governments do by focusing on the characteristics of those goods and services that governments commonly provide.Halter uses the concept of “public goods” as a primary explanation for why governments rather than the “market” provide some goods and services.Unusual “properties” of some goods and services dictate who they can be provided to or withheld from. The government usually provides certain “public goods” because they fall into one of two categories: “(non)-exclusion” – goods/services from which you can’t exclude “non-payers.”o Ex. Police force/military protection – there would be no way to have some people“subscribe” to police or military protection and others not. The police and Armedforces protect everyone because it’s not practical to try to exclude “non-payers.” o Government typically provides these kinds of services (“public goods”) because they can be paid for with tax dollars collected from the general population. That way there are no “non-payers” and everyone has an equal right to protection. “non-exhaustion” – use does not reduce “supply” of the good. o Any number of people can consume the good/service at once without reducing the amount of good/service available to others. Ex. Fire protection – One person being protected from fire outbreaks does not keep someone else from being protected at the same time. “Demand” + “supply” + ability to “price” in a “voluntary exchange”Note the difficulty for a market-provided “flood-control” project (i.e. a dam or levee) to exclude “non-payers” (i.e. “free riders”) from the benefits of the project. This is one advantage of providing certain goods through the public sector because the government can tax everyone. In sum, the government provides a good or service when it’s not practical to separate payers from non-payers and exclude the non-payers, and the use of the service doesn’t diminish someone else’s ability to use the service as well.POSTSCRIPTS: Beyond some obvious examples, concept of “public goods” does NOT explain verymuch of what governments do. Most public entities can still exclude non-payers (i.e. universities, electric companies, etc.).“We can start by applying what I call ‘The Google Test:’ If you can find a good or service on the Internet, then the federal government probably doesn’t need to be doing it. The post office — the government printing office — Amtrak — Fannie and Freddie – were all built for a different time in our country. When the private sector did not adequately provide those services. That’s no longer the case.” ~Quote from Tim Pawlenty, June 7, 2011 (former governor of MN & former Republican candidate for the 2012 Republican presidential nomination)Implication of “public goods” analysis: Many say that modern American governments on all levels are bigger than they “ought” to be because governments are providing lots of goods the “market” could and does adequately provide (thus, we have less than an “optimal” allocation of society’s resources)  Why does thegovernment do this? Because of influence of “politics” (i.e. elections, partisanship, politicians, special interests, legislative “logrolling” (and “pork”), etc. Politicians promise things to their constituents and special interest groups and government just keeps growing! Personal agendas of politicians come into play as well. They try and allocate money to projects that are important to them.Final postscript on “public goods” as an explanation for what governments do: Modern American governments typically provide several types of goods and services. There’s only a handful of “pure” “public goods.”A larger number of goods/services having some “public good-ness” quality to them…(similar to Halter’s collective benefits goods and services)Benefits/costs of a good/service are not limited to immediate beneficiaries**Don’t confuse what governments provide as a practical and political matter with what they must provide because of the inherent nature of some goods and services.** Some other kinds of public goods that the government provides that don’t fall into the “non-exclusion” or “non-exhaustion” categories:- “ Collective benefits” (aka “externalities” in economics) – benefits (or costs) of a good/service are not limited to immediate “beneficiaries.” o Halter definition: “Goods that are provided with no charge because there is a broader public benefit associated with the good.” Example: public education (It benefits an entire society, not just the individuals being educated)- “ Redistributive goods” – transferring “resources” from one set of individuals to another seto Halter definition: “Those goods where government takes money from one groupof citizens and gives it to other citizens.” Example: Welfare- “ Regulatory goods” – rationing of scarce resourceso Halter definition: “Public goods where the government regulates the use of resources to prevent overuse.” Example: Water