The Tragedy of Public Goods: Insights from the Theory of Action

Undoubtedly, all main terms of the theory of public goods are well-grounded in the actions of humans. Therefore, in this paper, an attempt is made to conceptualize public goods from the philosophical theory of action, which can be seen as an advancement of Mises’ theory of action. We found that not a single building block of the standard theory of public goods is entirely grounded in the logic of human action. As a consequence, public goods, as defined in the standard theory, cannot exist at all due to reasons of action theory. This does not mean the end of collective consumption. Instead, our results can be used to develop the theory of public goods further, which rests firmly on the analytical basis of human action.