Common good (economics) in the context of "Common good"

⭐ In the context of economics, how does contemporary theory differentiate between 'a' common good and 'the' common good?

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⭐ Core Definition: Common good (economics)

Common goods (also called common-pool resources) are defined in economics as goods that are rivalrous and non-excludable. Thus, they constitute one of the four main types based on the criteria:

  • whether the consumption of a good by one person precludes its consumption by another person (rivalrousness)
  • whether it is possible to prevent people (consumers) who have not paid for it from having access to it (excludability)

As common goods are accessible by everybody, they are at risk of being subject to overexploitation which leads to diminished availability if people act to serve their own self-interests.

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👉 Common good (economics) in the context of Common good

In philosophy, economics, and political science, the common good (also commonwealth, common weal, general welfare, or public benefit) is either what is shared and beneficial for all or most members of a given community, or alternatively, what is achieved by citizenship, collective action, and active participation in the realm of politics and public service. The concept of the common good differs significantly among philosophical doctrines. Early conceptions of the common good were set out by Ancient Greek philosophers, including Aristotle and Plato. One understanding of the common good rooted in Aristotle's philosophy remains in common usage today, referring to what one contemporary scholar calls the "good proper to, and attainable only by, the community, yet individually shared by its members."

The concept of common good developed through the work of political theorists, moral philosophers, and public economists, including Thomas Aquinas, Niccolò Machiavelli, John Locke, Jean-Jacques Rousseau, James Madison, Adam Smith, Karl Marx, John Stuart Mill, John Maynard Keynes, John Rawls, and many other thinkers. In contemporary economic theory, a common good is any good which is rivalrous yet non-excludable, while the common good, by contrast, arises in the subfield of welfare economics and refers to the outcome of a social welfare function. Such a social welfare function, in turn, would be rooted in a moral theory of the good (such as utilitarianism). Social choice theory aims to understand processes by which the common good may or may not be realized in societies through the study of collective decision rules. Public choice theory applies microeconomic methodology to the study of political science in order to explain how private interests affect political activities and outcomes.

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Common good (economics) in the context of Public good

In economics, a public good (also referred to as a social good or collective good) is a commodity, product or service that is both non-excludable and non-rivalrous and which is typically provided by a government and paid for through taxation. Use by one person neither prevents access by other people, nor does it reduce availability to others, so the good can be used simultaneously by more than one person. This is in contrast to a common good, such as wild fish stocks in the ocean, which is non-excludable but rivalrous to a certain degree. If too many fish were harvested, the stocks would deplete, limiting the access of fish for others. A public good must be valuable to more than one user, otherwise, its simultaneous availability to more than one person would be economically irrelevant.

Capital goods may be used to produce public goods or services that are "...typically provided on a large scale to many consumers." Similarly, using capital goods to produce public goods may result in the creation of new capital goods. In some cases, public goods or services are considered "...insufficiently profitable to be provided by the private sector.... (and), in the absence of government provision, these goods or services would be produced in relatively small quantities or, perhaps, not at all."

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Common good (economics) in the context of Road space rationing

Road space rationing, also known as alternate-day travel, driving restriction, no-drive days and number coding (Spanish: restricción vehicular; Portuguese: rodízio veicular; French: circulation alternée), is a travel demand management strategy aimed to reduce the negative externalities generated by urban air pollution or peak urban travel demand in excess of available supply or road capacity, through artificially restricting demand (vehicle travel) by rationing the scarce common good road capacity, especially during the peak periods or during peak pollution events. This objective is achieved by restricting traffic access into an urban cordon area, city center (CBD), or district based upon the last digits of the vehicle registration plate on pre-established days and during certain periods, usually, the peak hours.

The practical implementation of this traffic restraint policy is common in Latin America, and in many cases, the road rationing has as a main goal the reduction of air pollution, such as the cases of México City, and Santiago, Chile. São Paulo, with a fleet of 6 million vehicles in 2007, is the largest metropolis in the world with such a travel restriction, implemented first in 1996 as measured to mitigate air pollution, and thereafter made permanent in 1997 to relieve traffic congestion. More recent implementations in Costa Rica and Honduras have had the objective of reducing oil consumption, due to the high impact this import has on the economy of small countries, and considering the steep increases in oil prices that began in 2003. Bogotá, Quito, and La Paz, Bolivia also have similar driving restriction schemes in place.

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