Difference between public and private goods and services

In economics, goods and services are called the set of human processes and efforts that have the ultimate goal of satisfying the needs of an individual, a community or the entire species.

They are usually managed as a joint category in macroeconomic or social planning terms, but they represent two distinct but not disconnected segments of human endeavor in societies.

See also: What are public companies?

Difference between public and private goods and services

The public goods and services are those that do not belong to any particular entity or organization of society, but can be enjoyed by all citizens and are therefore administered by the State , as part of the res public.

In this they are mainly distinguished from private goods and services , which are the property of private entities and associations or individuals , or, in the case of services, are offered by them.

In fact, public goods are not disposable, except for political decisions agreed by state agencies ( privatization ). And even then it is usually something of difficult acceptance by the people.

It is normal for public services, for example, to have social or established access rates not based on the accumulation of capital ( profit ), but on the mere sustainability of the service, to make it more accessible to everyone. In some countries such services are even free. Instead, private services aim to be economically profitable : enrich those who exercise them and allow them to accumulate individual capital.

Types of public services

A distinction is made between two types of public goods and services, namely:

  • Divisible . Those that can be distributed among the population, that is, that each individual or group can consume a certain and measurable amount, for example, income taxes.
  • Indivisible . Those services that are provided to the entire population equally and that their consumption does not exhaust the available stock of it. An example of this is consular services.

Examples of public goods

  1. The road infrastructure . The roads, highways and other public infrastructure that connects the different corners of a country are usually the property of the State, even when the administration and maintenance is transferred to a private company. But being real estate, which cannot be removed, they are public property and there are usually ministries in charge of it.
  2. The radio spectrum . The radio spectrum of a country, through which the various radio and television waves are broadcast, is an irrevocably public asset, the exploitation of which occurs when the State grants concessions to private companies to transmit their respective schedules.
  3. The war material . Vehicles, weapons of war, uniforms and other supplies required by the military institution, in charge of defending territorial sovereignty, are inalienable assets of the State.
  4. Police patrols and fire vehicles . Just as these agencies are normally part of the public services, their work implements and special vehicles are part of the state’s assets.
  5. National airspace. No one in any country can buy air or skies, which are goods, to call them in some way, belonging solely to the State. So when an airplane enters the skies of another country, it is subject to the laws of that territory.
  6. Public spaces . The memorial sites, the squares, the presidential house, the public parks and all the assets of the national community are public property.
  7. Nature reserves . Forest reserves and large protected forests, National Parks and all its land are owned by the State and are never usually for sale, as in many cases they are even a World Heritage Site.
  8. The heritage of public companies . Anything that is the patrimony of any State company will necessarily be public property as well. Thus, all the desks of a Ministry are usually of the State and do not belong to any isolated individual.
  9. Public funds . The money (the physical notes and coins) of a country, although it represents public and private wealth without distinction, is the material property of the exclusive State. That is why one cannot issue their own tickets, since they do not belong only to us but to the entire community of the country.
  10. Copyright . Once a certain period of time has elapsed, the extent of which varies according to the legislation of the countries, the copyrights of works of art, literature, music or of any genre become part of the national heritage and, by extension, of humanity.

Examples of public services

  1. Electricity . In many countries it is normal for the electricity company to be wholly or exclusively owned by the state. Thus, more friendly electricity rates can be offered to the population and this basic service essential for contemporary life can be politically controlled.
  2. Identification and immigration . The issuance of passports, identity tickets, cards and all kinds of identification documents for nationals or foreigners residing or in transit in the territory of a country, is an exclusively public service that is handled by the appropriate state offices.
  3. Consular representation . All the citizens of a country that live in a foreign nation are represented legally and logistically by an embassy, ​​a consulate and various diplomatic entities that offer bureaucratic, legal public services, and even help in a national emergency.
  4. Documentation legalization . The certification of the originality of certain legal documents, such as contracts, academic degrees, etc., take place under the gaze of the State. Various public entities are responsible for attesting in writing to the originality of said documents or certifying their signature, acting as guarantor of fairness.
  5. Judicial tasks . Both civil, criminal, constitutional or any other type of judicial proceedings are the exclusive responsibility of the State, which is why it is a service that provides its citizens, safeguarding the fulfillment of their rights and duties, to ensure the legal framework and the legal rules of the game.
  6. Running water . This service is also usually public in many countries, except those that have suffered privatization waves. This is because the essential services for urban life, such as electricity or water, directly affect the minimum well-being of the population and their human rights, so they should not be in the hands of private organizations.
  7. Postal mail . All countries have a postal mail in the hands of the State, that is, public, as well as private post offices that compete with it. State mail, despite being in disuse, is also often considered a staple service.
  8. Public health . A hot topic in some countries, as it is often debated whether state resources are sufficient to attend to all inhabitants who have a health emergency without charging them or charging them social fees. In any case, this service is activated when there are public health emergencies, such as epidemics, and is part of the State’s mechanisms to contain it.
  9. Police . Watchmen for public safety are almost never part of private companies, although there are also some dedicated to the field. But the state police forces are part of a service provided to the population to guarantee their safety.
  10. Firefighters . Like the police, firefighters are part of the public emergency and fire fighting service that every nation requires to ensure the lives of its citizens.
by Abdullah Sam
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