I remember being intrigued by the idea of “Public Goods” in my high school economics class.
Public Goods are products or services provided by governments—usually because there is little to no economic incentive for the private sector to offer them.
Street lights are a great example. Their existence reduces the rate of road accidents—especially for pedestrians. However, despite clearly being a benefit to the public, it’d be almost impossible to find a private company willing to invest in and maintain a portfolio of street lights if they had to collect payment from private citizens. So the government collects taxes to pay for them—they’re a Public Good for the public good.
Which brings me to my musing for the day.
Pre-corona, I’d sometimes sit in the London Underground and think about what proportion of the cost of my travel was 1) paid by my fare, and 2) paid by taxes, grants, or subsidies. (I’m also aware how weird this sounds; but it happens).
I never cared enough to get the data and figure it out, but this article about the closures and re-openings of the New York Subway gave me a little insight into what this split may be, and reminded me why I love Public Goods.
40% of the New York Transit Agency’s operating budget come from fares, and this revenue stream has been decimated by COVID. At the peak of New York City lockdowns, 90% of users stopped using the subway. And even now, usage has only returned to 20% of pre-COVID levels.
It got me thinking. If the New York Transit Agency was a private company, it’d need a helluva lot of cash to survive this pandemic.
However, a government, on the other hand, has the ability to collect taxes and take on debt to see its nation and people through a crisis. It made me grateful for the systems and structures in place to help us all weather this pandemic, from street lights, to subways, to education, to healthcare, and beyond.