The Lighthouse Debate and the Dynamics of Interventionism
The Review of Austrian Economics, Forthcoming
44 Pages Posted: 29 May 2018
Date Written: May 16, 2018
Coase’s publication of “The Lighthouse in Economics” (1974) sparked a polarizing debate over his claim that government intervention is not necessary for the existence of a private lighthouse market. The purpose of this paper is to reframe this debate by asking the following question: why was nationalization the outcome of lighthouse regulation? We answer this question by utilizing the Austrian theory of interventionism to illustrate how regulation of the lighthouse market distorted the entrepreneurial market process. We argue that the nationalization of the lighthouse market in England and Wales was a result of prior government failure to exclude private lighthouses from the market, not a failure of the entrepreneurial market process to privately provide lighthouses.
Keywords: Entrepreneurship; Dynamics of Interventionism; Lighthouses; Regulation
JEL Classification: B53; D72; L51
Suggested Citation: Suggested Citation