IDEAS home Printed from https://ideas.repec.org/a/kap/revaec/v33y2020i3d10.1007_s11138-018-0422-7.html
   My bibliography  Save this article

The Lighthouse Debate and the Dynamics of Interventionism

Author

Listed:
  • Rosolino A. Candela

    (Brown University)

  • Vincent J. Geloso

    (Bates College)

Abstract

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.

Suggested Citation

  • Rosolino A. Candela & Vincent J. Geloso, 2020. "The Lighthouse Debate and the Dynamics of Interventionism," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(3), pages 289-314, September.
  • Handle: RePEc:kap:revaec:v:33:y:2020:i:3:d:10.1007_s11138-018-0422-7
    DOI: 10.1007/s11138-018-0422-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11138-018-0422-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11138-018-0422-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sutter, Daniel, 2002. "The Democratic Efficiency Debate and Definitions of Political Equilibrium," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 199-209, June.
    2. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    3. Brubaker, Earl R, 1975. "Free Ride, Free Revelation, or Golden Rule?," Journal of Law and Economics, University of Chicago Press, vol. 18(1), pages 147-161, April.
    4. Gordon Tullock, 1975. "The Transitional Gains Trap," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 671-678, Autumn.
    5. Yannis Bakos & Erik Brynjolfsson, 1999. "Bundling Information Goods: Pricing, Profits, and Efficiency," Management Science, INFORMS, vol. 45(12), pages 1613-1630, December.
    6. Holcombe, Randall G, 2002. "Political Entrepreneurship and the Democratic Allocation of Economic Resources," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 143-159, June.
    7. Kingston, Christopher, 2007. "Marine Insurance in Britain and America, 1720–1844: A Comparative Institutional Analysis," The Journal of Economic History, Cambridge University Press, vol. 67(2), pages 379-409, June.
    8. Lucas, David S. & Fuller, Caleb S., 2017. "Entrepreneurship: Productive, unproductive, and destructive—Relative to what?," Journal of Business Venturing Insights, Elsevier, vol. 7(C), pages 45-49.
    9. Peter Boettke & Christopher Coyne & Peter Leeson, 2007. "Saving government failure theory from itself: recasting political economy from an Austrian perspective," Constitutional Political Economy, Springer, vol. 18(2), pages 127-143, June.
    10. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    11. Coase, R H, 1974. "The Lighthouse in Economics," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 357-376, October.
    12. Robert D. Tollison & Richard E. Wagner, 1991. "Romance, Realism, and Economic Reform," Kyklos, Wiley Blackwell, vol. 44(1), pages 57-70, February.
    13. Elodie Bertrand, 2009. "Empirical investigations and their normative interpretations: A reply to Barnett and Block," Public Choice, Springer, vol. 140(1), pages 15-20, July.
    14. Manne,Geoffrey A. & Wright,Joshua D. (ed.), 2011. "Competition Policy and Patent Law under Uncertainty," Cambridge Books, Cambridge University Press, number 9780521766746, Enero.
    15. Demsetz, Harold, 1970. "The Private Production of Public Goods," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 293-306, October.
    16. Erik Lindberg, 2015. "The Swedish lighthouse system 1650–1890: private versus public provision of public goods," European Review of Economic History, European Historical Economics Society, vol. 19(4), pages 454-468.
    17. Laurent Carnis, 2013. "The provision of lighthouses services: a political economy perspective," Public Choice, Springer, vol. 157(1), pages 51-56, October.
    18. repec:jpe:journl:1139 is not listed on IDEAS
    19. Elodie Bertrand, 2006. "The Coasean analysis of lighthouse financing: myths and realities," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(3), pages 389-402, May.
    20. Walter Block & William Barnett, 2009. "Coase and Bertrand on lighthouses," Public Choice, Springer, vol. 140(1), pages 1-13, July.
    21. Elodie Bertrand, 2006. "The Coasean analysis of lighthouse financing: myths and realities," Post-Print hal-03507599, HAL.
    22. Boettke, Peter J & Lopez, Edward J, 2002. "Austrian Economics and Public Choice," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(2-3), pages 111-119, June.
    23. Boettke, Peter & Coyne, Christopher (ed.), 2015. "The Oxford Handbook of Austrian Economics," OUP Catalogue, Oxford University Press, number 9780199811762, Decembrie.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Germain Belzile & Rosolino A. Candela & Vincent Geloso, 2022. "Regulatory capture and the dynamics of interventionism: the case of power utilities in Quebec and Ontario to 1944," Public Choice, Springer, vol. 193(1), pages 35-61, October.
    2. Rosolino A. Candela & Peter J. Jacobsen & Kacey Reeves, 2022. "Malcom McLean, containerization and entrepreneurship," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(4), pages 445-465, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Candela, Rosolino A. & Geloso, Vincent, 2019. "Why consider the lighthouse a public good?," International Review of Law and Economics, Elsevier, vol. 60(C).
    2. Rosolino A. Candela & Vincent J. Geloso, 2018. "The lightship in economics," Public Choice, Springer, vol. 176(3), pages 479-506, September.
    3. Rosolino A. Candela & Vincent Geloso, 2019. "Coase and transaction costs reconsidered: the case of the English lighthouse system," European Journal of Law and Economics, Springer, vol. 48(3), pages 331-349, December.
    4. Mark Koyama, 2014. "The law & economics of private prosecutions in industrial revolution England," Public Choice, Springer, vol. 159(1), pages 277-298, April.
    5. Laurent Carnis, 2013. "The provision of lighthouses services: a political economy perspective," Public Choice, Springer, vol. 157(1), pages 51-56, October.
    6. Callais, Justin T & Geloso, Vincent, 2023. "The political economy of lighthouses in antebellum America," European Economic Review, Elsevier, vol. 154(C).
    7. Carnis Laurent, 2014. "The Political Economy of Lighthouses: Some Further Considerations," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 20(2), pages 143-165, December.
    8. repec:jpe:journl:1139 is not listed on IDEAS
    9. Niklas Elert & Magnus Henrekson, 2021. "Entrepreneurship prompts institutional change in developing economies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(1), pages 33-53, March.
    10. Elodie Bertrand, 2011. "What do cattle and bees tell us about the Coase theorem?," European Journal of Law and Economics, Springer, vol. 31(1), pages 39-62, February.
    11. Dan Bogart & Oliver Buxton Dunn & Eduard J. Alvarez‐Palau & Leigh Shaw‐Taylor, 2022. "Organizations and efficiency in public services: The case of English lighthouses revisited," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 975-994, April.
    12. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.
    13. Glenn Furton & Adam Martin, 2019. "Beyond market failure and government failure," Public Choice, Springer, vol. 178(1), pages 197-216, January.
    14. Kamath Shyam J., 1994. "Privatization: A Market Prospect Perspective," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 5(1), pages 53-104, March.
    15. Diana Thomas & Michael Thomas, 2014. "Entrepreneurship: Catallactic and constitutional perspectives," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 11-22, March.
    16. Daniel D’Amico, 2010. "The prison in economics: private and public incarceration in Ancient Greece," Public Choice, Springer, vol. 145(3), pages 461-482, December.
    17. Lazzarini,Sergio G., 2022. "The Right Privatization," Cambridge Books, Cambridge University Press, number 9781316519714, Enero.
    18. Anthony Evans, 2014. "A subjectivist’s solution to the limits of public choice," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 23-44, March.
    19. Élodie Bertrand, 2006. "La thèse d'efficience du « théorème de Coase ». Quelle critique de la microéconomie ?," Revue économique, Presses de Sciences-Po, vol. 57(5), pages 983-1007.
    20. Walter Block, 2010. "Rejoinder To Boettke On Coasean Economics And Communism," Romanian Economic Business Review, Romanian-American University, vol. 5(3), pages 9-30, September.
    21. Walter Block & William Barnett, 2009. "Coase and Bertrand on lighthouses," Public Choice, Springer, vol. 140(1), pages 1-13, July.

    More about this item

    Keywords

    Entrepreneurship; Dynamics of Interventionism; Lighthouses; Regulation;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:33:y:2020:i:3:d:10.1007_s11138-018-0422-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.