30.12.04

PAID YOUR TELEVISION TAX? Professor Althouse discovers that the price of freedom from commercials on the BBC is a slightly greater exposure to visits from the Television Police. (No, this is not a Monty Python skit.)
That's awfully oppressive. And why deter the poorest people from having TVs? What a terrible system. Why not just support the BBC from general tax funds if you love the BBC so much? You're already operating on the assumption that everyone wants to have a TV.
(I will refrain from a riff on the culture war guaranteed whenever government funds are used for the creative arts. The Superintendent's position on such matters is that government sponsored art, or government sponsored broadcasts, are censorship per se.)

The television signal is an illustration of a local pure public good. Every receiver within range of the transmitter (hence local) is able to receive the signal (hence nonexclusive use, provided the receiver is tuned to receive the signal) without impinging on any other receiver's ability to decode the signal (hence nonrivalrous consumption.) The existence of television networks and television commercials present counterexamples to the vulgar Welfare Economics Paradigm perspective (which infects the Wikipedia definition I used, although its observation of the rent-seeking-in-provision phenomenon called the military-industrial complex is notable) in which any outcome other than textbook "perfect competition" are market "failures" that "warrant" some sort of government corrective. (This summary of general equilibrium and welfare economics is more careful. Read and understand it. I may have just identified some online resources for my upcoming public policy class. The one I called "vulgar" has more fumbles than UCLA at the 1993-1994 Rose Bowl. I haven't mentioned my other team much but they will be playing on Saturday. How many other academicians have both their alma mater and their employer in different bowls?)

The article Professor Althouse links to illustrates a couple of problems with the idea that a public good requires government provision. The Television Police have a serious problem with free riders.
It is a criminal offense for anyone with a television set not to pay it, whether they watch the BBC or not. Fee-evasion cases make up 12 percent of the caseload in magistrates' courts. Although most evaders are fined, 20 people were imprisoned for nonpayment last year.
The problem the British face is that viewers now have choices.
BBC television has now been joined by hundreds of commercial stations that compete for advertising and viewers but do not receive a share of the license fee. The government has pledged to keep the current system in place when the BBC's charter is renewed in 2006.
Big mistake. Why should viewers have to pay their television tax for the support of official programming they never watch, and be exposed to the commercials that pay for the provision of other network programming? Let the Beeb have a pledge drive. The Wikipedia analysis gets it about half right.
However, since in some cases, most of the benefit of a lighthouse accrues to ships using particular ports, lighthouse maintenance fees can profitably be bundled with port fees. This has been been sufficient to fund some actual lighthouses as private goods. However, since port fees themselves are much like taxes, this argument does not go against the theory of public goods completely.
Port fees, I suppose, function like television taxes. But the trick is to bundle the provision of the public good with the use of something else in a low-transaction-cost way. There may be no cheaper way to pay for lighthouses than by docking docking ships. Commercials strike me as less intrusive than the Television Police.

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