On This PageOctober, No. 02

In the Wealth of Nations, Adam Smith argues tht one of the basic responsibilities of the "sovereign or commonwealth" is to provide an adequate structure of public works to "facilitate the commerce of society."

Is the Public Capital Stock Too Low?
Last Updated: 10/29/87

An extensive and well maintained system of roads, bridges, highways, lighthouses, and canals is necessary to meet the needs of a vital, growing economy. The duty of constructing such public works falls on the government because their benefits accrue not just to particular individuals but to the economy at large, or because the cost reductions derived from economies of scale are best captured by direct, centralized, public capital outlays.