The Myth of Lighthouses
Brian Doherty | May 29, 2007, 7:32pm
National Review's redoubtable John Derbyshire begins to contemplate giving anarchism a chance, over at the Corner:
The more I contemplate our federal government and its works, the better Murray Rothbard is starting to look.
It was in 1949 that Rothbard first concluded that the free market could provide all services, including police, courts, and defense services better than could the State.
I wouldn't be a bit surprised. Probably there are limits. (The quip about Rothbard used to be that in a Rothbardian world, the proprietor of a lighthouse, seeing that some ship at sea was using the lighthouse to navigate by, would have to jump into a rowboat, make his way to the ship, and demand a fee from the captain.) It may be that immigration control is inside those limits, though.
That lighthouse canard is an oldie-but-baddie for those mocking libertarian anarchists. Here, from an article by Dr. Rothbard himself, is a discussion of the facts of the lighthouse matter, relying on the scholarship of Nobel prize winner Ronald Coase:
To Professor [James] Buchanan, the "classic" example of a collective good is the lighthouse. The beams of the lighthouse are indivisible: "If one boat gets all the light beams, all boats may do likewise."Or, as Samuelson has put it, "A businessman could not build it for a profit, since he cannot claim a price from each user."The theory is that it would be virtually impossible for a lighthouse keeper to row out to each boat to demand payment for use of the light. And that hence lighthouses have always been supplied by government.
..............
In his trenchant critique of the offhanded way in which economists, from Mill to Samuelson and Arrow, have wrongly used the lighthouse as an example of a collective good, [Ronald] Coase concludes:
These references by economists to lighthouses are not the result of their having made a study of lighthouses or having read a detailed study by some other economist. Despite the extensive use of the lighthouse example in the literature, no economist, to my knowledge, has ever made a comprehensive study of lighthouse finance and administration. The lighthouse is simply plucked out of the air to serve as an illustration....
......contrary to the belief of many economists, a lighthouse service can be provided by private enterprise.... The lighthouses were built, operated, financed and owned by private individuals, who could sell the lighthouse or dispose of it by bequest. The role of the government was limited to the establishment and enforcement of property rights in the lighthouse. The charges were collected at ports by agents from the lighthouses. The problem of enforcement was no different for them than for other suppliers of goods and services to the shipowner.
Coase the lighthouse mythslayer was interviewed by reason in our January 1997 issue.
To get better educated on Rothbard than is the Derb, read, of course, my new book Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement .
Stevo Darkly | May 29, 2007, 9:25pm | #
I seem to recall reading some years ago that fees for the use of private lighthouses were usually bundled in with the fees that shippers paid to use the associate harbor.
But you still need a government to provide enforcement. This Coase sounds like a crypto-statist to me.
You know nothing. At least about Coase. The point under discussion is whether you can privately sell services that are conventionally thought of as public goods that only the government can provide. This example shows that, with a little bit of thought, you can find ways to do so, at least in some cases -- specifically, e.g., the case that
used to be held up as the classic example of why you
couldn't.
Enforcement (to ensure of getting paid by selling those services) by private means is another issue. On that score, you might also read up on the degree to which various nations used to rely heavily on private versus government means to enforce the law in general (including during the classic Age of Sail, and especially the case with England, a leading maritime nation.) Start by looking around David D. Friedman's Web site. The following writings are available online there:
"Making Sense of English Law Enforcement in the Eighteenth Century," The University of Chicago Law School Roundtable (Spring/Summer 1995).
"Law as a Private Good," Economics and Philosophy 10 (1994), 319- 327.
"Private Creation and Enforcement of Law -- A Historical Case." Journal of Legal Studies , (March 1979), pp. 399-415.
"Less Law than Meets the Eye,"a review of Order Without Law, by Robert Ellickson, The Michigan Law Review vol. 90 no. 6, (May 1992) pp.1444-1452.
libertreee | May 30, 2007, 1:29pm | #
That private industries, when left to their own devices, are going to cut as many corners as possible in order to increase their profit margin, regardless of quality.-spd
This comment illustrates the fallacy of thought that looks at a "market failure" hypothetical without considering the "government failure" converse.
The idea that private business "cuts corners whenever possible...regardless of quality" simply is not true in the real world because to do so would invite loss of market share to another firm or firms who would profit from the
bad publicity, or customer dissatisfaction, resulting from the cost cutting.
Not to mention that the increased profits that theoritically would result from such foolish cost cutting would also invite more competition into the market. Competiton that could fail, or could result in better products. Either way, market share would diminish.
No. Profits are made almost always NOT from foolish cost cutting, but from well planned cost cutting that carefully distinguishes what can properly be cut while still satisfying customers and improving product and service.
It is government (the monopoly, non cost cutting type) that refuses to improve service while constantly RAISING prices. EG, Post Office, Education, Medical Care involvement, Military waste, the FAA, FDA, etc. etc ad infinitum.
libertreee | May 30, 2007, 1:39pm | #
When I was younger, I used to be a lot more interested in theoretical discussions about how we could have dogcatchers or lighthouses or whatever without the government. Now, I feel like it's just a distraction from the libertarian movement's focusing on the big stuff: wars, civil rights, massive public debt, etc.=Mike Laursen
Mike--
We are at the beginning of a new century. Imagine the world in 1906. Could anyone have ever imagined in the Progressive Era how the dominant ideas of a technological elite overseeing a centralized state conceived for social engineering the horrors of totalitarianism that it produced?
We are at what could be the tail end of that era. The era of the nation state, or certainly of the continuing centralization of power in same, is over.
In Somalia, we have the first Westphalian nation state to consciously rid itself of government.
We have intellectuals of every strife writing about the end of the nation state.
We have fourth generation war bogging down the world's greatest superpower in a hopeless endgame.
We have citizens rejecting centralization, and secession is being discussed and acted upon all over the world. The world's empires are falling.
Yes, the governments are lashing out, and the next decades could see more repression, loss of civil liberties, maybe even a very bad war.
But, don't you think our job is to hold up the theoritical light of liberty even in the face of repression so that our children and grandchildren have a chance to utilize the wealth and technology they will possess to make a new, free world?
One World Government is dead! Long live One World AnarchY!
Murray Rothbard, RIP!!
