ManusJustus said:
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. |
That is what most people believe. That a lighthouse is non-rivalrous and is non-exlcudible because there is no possible way to charge every ship; however, private lighthouses were successful in Great Britain and other states such as France and Uruguay. Quite often a private entity would construct a lighthouse and charge a nearby port to make money. Ports would be inclined to pay user fees for the lighthouse because a lighthouse meant more business. If the port did not have a lighthouse, then ships would not come in to dock. If they paid someone for use of their lighthouse, ships would come in to port and that would mean increased business for the port. There were also lighthouses ran by religious charitable organizations, but they were often the exception to the rule. I agree the government has to provide some services, but not as many as people believe.
