NPR’s Planet Money recently did a story about the debate to cut federal funding of public radio. I know what you might be thinking that’s gotta be biased. I thought the same but nonetheless, NPR being the reputed source that it is, I thought I’d hear them out.
The key question they point out is whether or not NPR is a public good. Government spending goes to public goods which by definition are things that everyone benefits from that the private sector may not afford at the moment. So fundamentally we ask ourselves if everyone benefits from NPR. Now this question isn’t as subjective as it might seem in that it’s not really about if you like NPR as much as if it’s available to you and anyone else. And in this aspect there little dispute. Even if you don’t contribute to public radio’s fundraisers and hate it to your very core, you still have the option to at any time to turn on your radio and tune in. Furthermore, it is a non-rival commodity in that usage and external factors don’t make it more or less available to any one person or group.
So NPR is a public good but that isn’t by any means a case closed for funding. There are a lot of things that technically fall under the category of public good such as that fart that nobody paid you for but yet you so graciously released for everyone’s smelling pleasure. This is when the real question of whether that public good is worth it comes into play; would people actually potentially be willing to pay for it. This is the far more difficult question to answer. Unlike normal things, public goods receive little in the way of market feedback which is the essence of assessing demand. When people buy a car they are endorsing its value over its cost but how do you know if the same holds true for NPR?
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