The Ranting Kraut

19.3.2006 – 27.9.2010

Did Paxman really mean this?

Posted by rantingkraut on August 25, 2007

In his recent MacTaggart lecture, Jeremy Paxman raised a highly pertinent question:

The idea of a tax on the ownership of a television belongs in the 1950’s. Why not tax people for owning a washing machine to fund the manufacture of Persil?” (source)

That almost sounds like a rejection of the license fee racket. Did Paxman mean it? Apparently not. Those who listened to his subsequent exchange with John Humphreys will know that he is all for the license fee, so long as it is used for the kind of high quality output which the stupid masses are not enlightened enough to demand on their own. Naturally, he sees his own program, Newsnight, as one such product.

What strikes me as odd is the incomplete argument that appears to be going completely unchallenged: if the market can’t provide it, then the state must. Why?

There are many public goods the market doesn’t provide. Few English towns have a 200 ft statue of Lenin or Kim Jong Il on their Market square. These fulfill the conditions for the definition of a public good: There is a substantial fixed cost involved in their production additional ‘units’ can be consumed at zero marginal cost and it is impractical to exclude non-payers from consumption.

If the Paxman-Humphreys paradigm applies, then these public goods should be provided. Alternatively, one could remember that a clear need for the state provision of public goods exists if and only if the good in question is essential for the functioning of society, as well as not being provided by the market. National defense is such a good, television and theatre are not.

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