ManusJustus on 25 August 2008
| Jackson50 said: The example of the lighthouse displays how the private market can be more efficient than the government at providing public goods. |
I think we both agree that tariffs are bad and government involvement when not necessary is bad.
I dont understand this quote, however. Roads, national security, and lighthouses are classic examples of market failure. The lighthouse is a public good and there is no way for the lighthouse to decide who can consume their product and who can not. If a ship doesnt pay the lighthouse fee, there is nothing the lighthouse can do to take their services away from them. If you dont have to pay a fee to recieve the service, then there is little incentive to pay.
To correct this, the government or some other governing entity has to tax vessels that use the lighthouse, usually as a fee whenever ships dock in the harbor than the lighthouse serves.
