Capitalism 1.

0 Make sure you make profits

Capitalism 2.0 Thinking about others
Capitalism 3.0 Thinking about the planet
People: Ego
Profit: Others
Planet: Others ++
UN Sustainable Goals (17)
Public Goods are commodities or services with non-rival and non-excludable benefits that
are provided to all members of a society, either by the government or an organization or a
private individual.
Example : National Defense.

Non-excludability leads to Free Riding problem because there is an incentive not to

pay for the benefits received. (Example: Tax Evaders get benefits of National
Defense)

In comparison with Public Goods, Impure Public Goods are commodities or services
with partially rival and / or partially excludable benefits. Example: efficiently supplied
Satellite Launch Facility.

While Club Goods are commodities or services with partially rival and excludable
benefits. Example: undersupplied treating of diseased patients.

There are four types of public goods, depending on spill over range.
National Public Goods (NPG) Spill over range is within a nation (e.g. Water Treatment Plant)
Regional Public Goods (RPG) - Spill over range includes two or more nations (e.g. Gas
Pipelines)
Trans-regional Public Goods (TRPG) Spill over range include two or more regions. (e.g. Air
Traffic Control)
Global Public Goods (GPG) Spillover range includes a large part of the planet or the entire
globe (e.g. Curing cancer)
Aggregation Technology in public goods means the collection of provisions from members of
contributors to the availability and quality of the public goods. There are five types of
Aggregation Technology
Summation overall level of public good equals the sum of countries or donors
contributions (e.g. undersupplied cleansing of an ecosystem)
Weighted Sum overall level of public goods = weighted sum of countries provisions (e.g.
partly undersupplied curving spread of the pest)
Weakest Link Smallest provision level determines the public goods aggregate level. (e.g.
undersupplied monitoring outbreak)
Threshold Benefit from public good only arise once the level of that good surpasses a
threshold. (e.g, Limited undersupply regional flood control)
Best Shot largest provision determines the public goods aggregate level. (e.g. undersupplied
or efficient developing best practices for treating disease)
There are 6 types of Regional Public Goods by sectors:
Health Sector RPG that focus on health of members of society (e.g. vaccines for regions
specific diseases)
Environment Sector RPG that deals w/ environmental damages (Preserving rainforest)
Knowledge Sector RPG that shares knowledge or information of a certain subject (e.g.
Geoclimate specific research findings)

Governance Sector RPG that comes as result of interntional agreements (e.g. Eliminating
Trade Barriers)
Peace and Security Sector RPG that focus restoring or maintaining peace and security (e.g.
eliminating terrorism)
Infrastructure Sector RPG provides commodities or services mostly in infrastructure /
transport. (e.g. River Development)
Regional Subsidiarity means the providing of public goods by the smallest appropriate
jurisdiction. In subsidiarity, decision making jurisdiction should match perfectly with public
range spillovers. (e.g. city council decides to make a recreational park in the city.)
However, sometimes the financing of public goods is provided from outside of decision
making jurisdiction. (e.g. the funds for the recreational park come from rich private
individuals.)
Solutions that can be done to support Regional Subsidiarity
Fosters efficiency by equating RPG marginal benefits to its marginal cost
Foster efficiency by limiting tax spillovers to non beneficiaries
Limits transaction costs by reducing number of participants, ugmenting repeated
interactions and curtailing asymmetric informations
Support evolution of institutions from shared cultures, norms, experiences, and values
Bolsters interregional evolutions
Avoids mission-creep of global institutions
Detracting Factors for regional subsidiarity
Economies of scle from reduced unit costs favor allocation by a larger jurisdiction than the
spillover range of the public good
Ecvonomies of scope from reduce unit cost encourage providing two or more RPGs in the
same jurisdiction even when spillover range do not math
The requisite regional institution does not exist nor posses a sufficient capacity
Some aggregation technologies favor jurisdictions beyond those identified by regional
subsidiarity
Temporal or dynamic consideration my require significant nonmatching of economic and
political jurisdictions initially. Over time a greater coinceidence is achieved
Participants in support of RPG and their contributions: