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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
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    References listed on IDEAS

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    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.

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    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

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