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In our modern, Western world, many justify the state and its policies because of the presupposition that the state—and the state uniquely—is an indispensable service-provider of essential services that could not or would not be provided by the free market or which would be underprovided were it not for the state’s collective provision. This is the public goods argument.

It has become a cliche for defenders of the state to ask critics, especially libertarians, “But without the government, who would build the roads?” It is astounding that it has been easier to convince people to send their children to kill and die in wars, pay exorbitant taxes, see their purchasing power evaporate through inflation, and passively observe general criminal behavior from political elites than to convince people that roads could be built without the state.

While roads and other public infrastructure are considered “public goods,” there are also certain services that have become inextricably linked to the state, such that to not have the state is to not have those services—national defense, collective security, police, courts, etc.

Public goods theory is presented as scientific, value-free economic theory, however, it implicitly smuggles in normative presuppositions that lead to the conclusion that the modern nation-state, and the state alone, must provide certain essential goods and services, which legitimates the state and its actions as necessary and legitimate. Historically, many applications of public goods theory emerged less as neutral demonstrations of state necessity than as retrospective justifications for functions governments had already monopolized.

Hobbesian Theory + Social Contract Theory/Tacit Consent Assumptions + Neoclassical Presuppositions = A Legitimating Myth for the State

Public goods theory—and various arguments made for the state because of assuming it—is a dangerous combination of several fallacious ideas. These errors include 1) Hobbes’s theory of the modern nation-state which argued the necessity and legitimacy of the state because of insecurity; 2) various social contract theories and tacit consent assumptions that argued that people not only need the state but agree with it; and, 3) neoclassical economic assumptions regarding equilibrium as a realistic and normative goal, market failure, and perfect competition. When these fallacious theories are combined, public goods theory becomes apologetic for the state.

Due to the prior assumptions it is even argued that, because someone used public goods—for which he was required to pay through taxation—whatever he successfully produces in such a system comes under some form of collective ownership and the control of the state. Therefore, since the state claims credit for success, the results of success may be legitimately expropriated by the state.

For example, according to Barack Obama and Elizabeth Warren, respectively,

If you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, “Well, it must be because I was so smart,” there are a lot of smart people out there. “It must be because I worked harder than everybody else,” let me tell you something, there are a whole bunch of hard-working people out there. If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The internet didn’t get invented on its own. (emphasis added)

There is nobody in this country who got rich on his own. Nobody. You built a factory out there, good for you. But I want to be clear, you moved your goods to market on the roads the rest of us paid for, you hired workers the rest of us paid to educate, you were safe in your factory because of police forces and fire forces that the rest of us paid for, you didn’t have to worry that marauding bands would come and seize everything that your factory and hire someone to protect against this because of the work the rest of us did. Now, you built a factory and it turned into something terrific or a great idea, God bless! Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along [via the state]. (emphasis added)

Doubtless, many critiques could be made regarding the statements above, however, this article focuses on the argument that the collective provision of public goods is the independent variable in any success. If public goods theory is accepted, then the state is no longer viewed merely as one institution among many within society, but as the indispensable precondition for society itself, the necessary provider of essential collective goods, and the institutional framework upon which production, exchange, order, and security ultimately depend. Combined with social contract and tacit-consent theories, the continued use of state-provided services is then treated as evidence of public consent, political obligation, and the legitimacy of the state’s ongoing interventions.

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