Saturday, August 16, 2014

Non-Excludability, Externalities, and Entrepreneurship – An Overview of the Austrian Theory of Common Goods

According to the neoclassical economic theory, common goods would be underproduced by the market in the absence of a monopoly of force capable of coercing every able member of society to contribute to their provision. By applying both the methodological tools developed by the Austrian School of Economics and the tools used to investigate the institutional robustness of various systems of political economy, I shall argue, first, that the neoclassical characteristics of common goods are based on a number of false assumptions or unacceptable oversimplifications, and second, that even if they were correct as stated, they would not establish the desirability of the existence of a monopoly of force.

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