[quoting] Underproduction of public goods is inevitable in the presence of 1) the ability to free-ride (i.e. non-excludable goods) and 2) rational self-interest.[end quote]Knapp attacked this position by claiming "underproduction" to be subjective measure, a measure typically proclaimed by fiat by the central planner. Holtz's rejoinder to Knapp was that Knapp didn't understand "higher mathematics" and that economists have in their toolbox mathematical measures of optimality, including such measures of Pareto or Kaldor-Hicks Efficiency.However, ... In Public Choice theory, the "Redistribution Problem" is recast as "Government Failure." Government Failure more or less holds that public goods will be systematically over-produced. It should be noted that "over-production" violates any algorithmic standard of optimality just as under-production does; and,in fact, the violations can be much worse.
The classic example of a public good supposedly is "national defense." Of course, it's difficult to justify why the US needs to spend roughly a trillion dollars a year on national defense. National Defense is Exhibit A of "government failure." The government failure is not in providing the public good of "defense," but that the overproduction of this public good is orders of magnitude more inefficient than any "market failure" could ever possibly be.
If you seriously believe that the US military industrial complex, with all it's stockpiles of WMD, is somehow a legitimate consequence of meeting a "public good,"
Holtz seems unaware that human instrumental rationality, point (2), has been debunked by experimental economics, sociology, and game Theory for some time now.
I should point out that Freedom Democrats utilizes Drupal Open Source Software. According to Holtz, I really shouldn't be even posting on this site, because Open Source Software should have long ago been killed by the non-excludable, free-rider problem. Yes, Open Source Software satisfies the definition of a "public good," however no one seriously would even dare to make a Pareto-optimality argument against it's under-production. Holtz's "inevitably argument" is empirically debunked.