Compare the feasibility and efficiency of producing public goods by tax dollars versus producing them jointly with private funds. Support your argument with specific examples.
Public good may not be 100% funded by tax funds but could well be underwritten and funded by private organizations as well. It is not feasible to produce public goods using private funding. The reason for this is that there is no way to prevent free riders. Public goods, or collective consumption goods, exhibit two properties; non-rivalry and non-excludability. Something is non-rivaled if one person’s consumption of it does not deprive another person. A firework display is non-rivaled – since one person watching a firework display does not prevent another person from doing so. A public good is non-excludable. Its use cannot be limited to a certain group of people. The private groups may find it non-profitable to manufacture or create public good if they don’t get tax dollars from government in addition to their own private funds as they would want to maximize their profit as much as possible. An example of this would be the train industry. Amtrak is a private group that provides some funds and runs the system while receiving federal tax dollars in order to operate efficiently and at a profit. Without tax funding in addition to revenue generated from the train usage, Amtrak would not be successful and most likely be bankrupt. On the other hand, the disadvantage of producing public goods with 100 percent tax dollars is that the project or good being produced is being produced for a political purpose regardless of its economic purpose. An example of a public good produced for political purposes is the Metro Train system in Washington DC. The system loses money every year yet it is being expanded for political purposes. When public goods are produced with public and private funds then the project has a higher chance of being economically sound. An example of this would be the sports stadiums and arenas that are built around the country from contributions from both sports franchises and local governments. The local government gets to keep the team and the tax revenue it generates in the local vicinity while the sports franchise gets to enjoy a publically financed state of the art facility at a fraction of the full market cost.
Speculate about why people in higher income groups vote for reasons that are borne out of a sense of duty rather than from economic interests.
People in higher income groups vote to acquire political knowledge that is completely unrelated to the act of voting itself. That is simply the desire to be able to participate effectively in the discussions and activities of the group. Once the groups comes to view politics as important, and politics emerges as a recurrent topic of discussion, knowledge about politics and willingness to act in the collectively defined interest become a marker for the relative standing of individuals in the group. Peoples’ welfare – in the very tangible sense of how much others respect and value them – is therefore partly defined by their knowledge and participation in politics. From this perspective, participation and acquisition of political knowledge can clearly be seen as perfectly rational investments by people. They also perceive this as a sense of duty towards the society and the voting exercise gives them a sense of working for the society well being. If the goal is esteem and standing in the group then acquisition of relevant information, as well as participation in group-sanctioned activities, are means by which to accomplish that goal.