My cup spilleth over
Posted by Daniel Hall on October 27, 2007
Ezra Klein is in awe of the technological wonders that Google hath wrought:
Google’s like the brain I never had, the knowledge I never acquired. Its continued existence seems utterly implausible. But so long as it’s around, I don’t need to really read anything. I just need to catalogue the existence of things I might one day read.
Free Exchange picks up this thought and brings it round to one of this blog’s favorite topics, public goods:
It is… clear that vast amounts of information are available cheaply and easily to anyone with an internet connection. …
All of this general, outsourced, readily-accessible knowledge is a public good. It’s non-rival and, with a few exceptions, non-excludable. It may be hard to feel sorry for Google these days, but it seems certain that the vast majority of the surplus created by the tech giant is uncapturable. …
Of course, one of the common features of public goods is that they’re underproduced by the market.
I have two comments. The first is rabid agreement about the spillovers generated by Google. My latest exhibit is Google Reader, which just in the last couple weeks is revolutionizing the way I interact with the web. I highly recommend trying it out. It creates your own personal inbox for the web, bringing everything you’re interested in to you, without all that tedious mucking about in hyperspace.* It’s astounding that something so mind-bogglingly useful is available for free.
The second comment concerns Free Exchange’s observation that public goods are underproduced by the market, and the subsequent implications for technology policy. As noted on this blog previously:
… the social return from R&D is around 4 times greater than the private return, suggesting that there are large under-incentives for private firms to invest in the socially optimal level of R&D.
This has big implications for long-term global problems like climate change. While we need a price on emissions (cough, cough), both to start reducing emissions now and to spur some technology development and deployment, there is also significant scope for technology policy to help achieve the socially optimal level of R&D. We should have significant support for climate technology R&D — the positive spillovers generated by such support will amply justify the costs.
*Special prize to the first commenter to name that reference — without using Google.