Hearing all the attacks on Obama recently for being a socialist got me thinking. I wonder if any of the attackers ever drive to work on a public road or went to public school? I recently spent time in Belize where few of the city services work very well. The garbage piles up, the roads are full of potholes, the city water is questionable, and sewage flows straight into the river. We take our excellent municipal services for granted. We have socialist roads, socialist schools, socialist water supply, socialist sewage treatment, socialist parks, socialist libraries, socialist trash pickup, socialist solid waste management, and here in Burlington we even have socialist electricity and socialist telecom. Yes, government runs all of them. Why? Because in most cases they are natural monopolies and it doesn't make sense for business to run them.
At the federal level we have socialist parks, socialist forests, socialist congressional health care, socialist military. My theory on why the military hates communism is because they live in a communist system: Authoritarian dictatorship, combined with guaranteed jobs, and cradle-to-grave health care sounds just like Soviet communism to me. A dictatorship fighting for democracy? No wonder it doesn't work.
At the state level we have socialist parks, colleges, resource management, etc.
The market will not provide anything that cannot be commodified. The things it does produce are only available to those who can afford to pay. George Bernard Shaw once said that if the air could be bottled people would die for lack of oxygen. There is a very simple framework to explain what should be privatized and what should not. click on table for bigger image:
rival-excludable
Rival means that if I use it there is less for you.
Excludable means I have property rights that can prevent you from using it without paying.
The market provides only those goods that are rival AND excludable. It does a great job with those, but provides nothing else. The problem of open access is well known and was explained in a famous essay by Garret Hardin called the Tragedy of the Commons where too many people graze their cows on an open field and destroy it through overconsumption. This is the subject of Elinor Ostrom's work on local management of the commons. Another solution is to establish quotas and issue permits for sustainable use such as hunting or fishing permits. More socialist (government) meddling with the "free" market. In this case creating a regulated market.
AS for non-rival but excludable goods we have things like patented, trademarked, or copyrighted information. When property rights are extended to information we have a limitation on the transfer of information. Information is essentially free and patents result in underconsumption by limiting use to those who can pay. This has perverse outcomes like eflornithane a cure for sleeping sickness that was only developed when it was discovered to also work as a hair remover. The poor developing world people couldn't afford to pay so the cure wasn't produced. Limitations on information would make the internet essentially impossible as much of it is based on free flow of information. IN this case welfare is enhanced by removing these items from the market.
As for public goods the market doesn't provide them at all. Only democracy does. Private companies dumped waste straight into rivers before government prohibited it. Cleaning up waste is a cost of doing business and no business will ever voluntary impose costs on itself. Libertarian fantasies of solving the problem by suing companies for damages run into the reality of differential power. Try suing a company with deep pockets and see how far you get before they bankrupt you. Look at Dow Chemical and Union Carbide's handling of the Bhopal incident. They paid very little in damages and thousands of people died.
Free enterprise and entrepreneurs are the engine of economic progress, but we are all socialists too.
What the critics of Obama are diverting attention from is the real problem. In communism government runs business. No one is proposing that. In capitalism business runs government. That is the real problem. When the bankster, military, pharmaceutical, media industrial complex runs the government, that is called a corporate state or fascism. That is what we have now. The right-wing media hate-mongers like things just the way they are. The socialist attacks are just a distraction. The hijacking of government by banks is the real problem. Time to secede.