The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 1

A letter to the Wall Street Journal attacking a proposal to privatize the nation's air traffic control system concluded as follows: A business exists to maximize economic return. A government exists to maximize public benefit. No amount of imagined gain in efficiency will offset the loss of public control of either the town stoplight or the nation's air traffic system.
(a) What does it mean to say that business exists to maximize economic return and government exists to maximize public benefit? Is this a statement of intentions (whose?) or of outcomes?
(b) Can a business ordinarily earn a large economic return if it does not provide substantial public benefits?
(c) How can we measure the public benefits flowing from the air traffic control system if users of the system are required to pay the costs of providing those benefits? How can we measure them if users are not required to pay, but all costs are instead financed from taxes?
(d) The author of the letter quoted described himself as president of the Aircraft Owners and Pilots Association. Does this suggest to you any reason for his opposition to privatizing air traffic control?