Public sector/Rawls: has two aspects: 1. the first relates to the ownership of means of production. Thus, for example, the public sector in socialism is larger than in capitalism. It is smaller in privately organised systems and mainly affects public institutions and transport.
2. characteristic: relates to the proportion of resources spent on public goods (infrastructure, etc.).
Public goods/Rawls: are above all indivisible and open to the public. (See J. M. Buchananan, The Demand and Supply of Public Goods, Chicago, 1968, ch. IX) If citizens want to benefit from this, it must be set up in such a way that everyone benefits to the same extent. National defense, for example.
This means that public goods have to be steered by the political process and not by the market.
Problems: special problems arise for public goods:
1. the free-rider problem: (Buchanan, ch. V; Mancur Olson, The Logic of Collective Action, Cambridge, MA, 1965, Chs. I, II.) There is a temptation not to do one's own part of the duties, because this amount does not have a noticeable effect on the overall result. For the individual, the contribution of others always appears to have already been made. Therefore, the state must take over the regulation of the corresponding public goods. (See W. J. Baumol, Welfare Economics and the Theory oft he State, London, 1952, ch. I, VII-IX, XII.)
2. Characteristic of public goods: Externality. The production of these goods is also at the expense of those who never profit from them. Not all wishes are taken into account. For example, someone who gets vaccinated helps others as well as himself/herself, even if he/she will never be exposed to this infection. For example, environmental damage is not normally regulated by the market. For example, raw materials may be produced at a much lower cost than their marginal social costs. Here there is a difference between private and social accounting that the market does not register.
In this case, the indivisibility of public goods (e. g. infrastructure, freedoms, etc.) requires the state to take over the regulation. Problem: even in a society of fair people, the isolation of individual decisions does not lead to the fulfilment of the general interest._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
A Theory of Justice: Original Edition Oxford 2005