The assertion that the state must provide “public goods” seems so obvious to the economic mainstream that it is not even debated. In the United States, we are offered the examples of roads, bridges, and recently, the levees of New Orleans. In Germany, the textbook example of the public-goods argument is, as in New Orleans, the system of dikes and levees.
Philipp Bagus examines the theoretical aspects, as well as the historical evidence from the Frisia region in Germany for this government-legitimizing argument, showing that private dikes were the historical norm before the centuries-long infiltration of the state. FULL ARTICLE