Sunday, February 15, 2015

How I Answer the "Lighthouse Question"

Larry Kudlow's comment on Gladstone, and his mention of the nightwatchman role for the state, brings to mind how I handle state lovers, who bring up the necessity of government for the so-called lighthouse role.

If I am debating a state lover,who reaches for what he thinks is his ultimate weapon against my anti-state views, and says, "Well, who will build the lighthouses?"

My reply is: "Well, if you are saying the only role that government is needed for is the lighthouse role, I would be happy to move to that state of affairs with you, and then debate the necessity, or lack thereof of,  of  government lighthouse construction and control."

This exposes the fact that the debater is not merely concerned about the lighthouse role, but that he is an advocate of many other roles for government, which can be much easier chopped to pieces by showing  how such operations can be better provided by the free market.

Of course, it is absolutely absurd to think that lighthouses wouldn't emerge in a free market. For example, why wouldn't a shipbuilder want to advertise with a "This lighthouse brought to you by Shipbuilder Y"? Or better yet, why wouldn't the local whorehouse want to sponsor a lighthouse to signal incoming merchant sailors to "Katy's Girls"?

Government lighthouses are boring.



  1. I answer the 'what about the roads' question much the same way. I answer that if we can reduce government to being the managers of the roads that would be a vast improvement. Most then go another direction. Those that don't well, it's pretty easy to make "government" into a tiny entity without any greater power than a condo board that makes sure the snow plows run and other tasks of maintaining the roads.

  2. Most of the lighthouses in England were private. See the classic article (in the JLE I think) by Ron Coase titled "The Lighthouse in Economics."

  3. On my little island, the local business people (boat rentals, marinas, fuel docks) provide channel markers and other navigation aids. And yes, nailed to these markers are signs advertising these services.
    It's in the merchants SELF-INTEREST to make entry into their harbours as inviting and worry free as possible.
    NOBODY expects the incompetent boobs down in Nassau to maintain the harbours.

  4. This is not even a debatable point - a long history of profitable, private lighthouses exists:

    All such "But who would build the X" questions are self-defeating by nature. Any X valuable enough to prompt the question is valuable enough for a private entity to step up to build in order to make money from providing that value.

    Lighthouse businesses only seem different at first glance because they include a free rider problem. But the free rider problem, i.e. how to get more people paying rather than fewer people paying, has nothing to do with the value proposition of having a lighthouse at all. A few shipping companies with a few ships could cost justify building their own private lighthouse simply from the savings for their own ships. These new lighthouse owners could then readily elicit lighthouse payments from other shippers by announcing they would only turn the lighthouse on when ships of shippers paying lighthouse fees were entering port. The mere threat of possibly encountering the lighthouse shut off during a storm would prompt payments from anyone standing a lot to lose in that eventuality, i.e. every major ship owner using the harbor.

    In fact to ensure no concentrated control over such a vital, essential resource left them vulnerable, parties heavily financially invested in running a profitable harbor, like major shipping lines, dock owners, transport hub operators, and shipping insurers would probably take steps to secure ownership interests in lighthouses and ensure their continuous funding to guarantee no service interruptions. Each shipwreck tarnishes the reputation of a harbor as safe port. Each shipwreck drives away the future shipping business that participants in the harbor ecosystem depend on for their livelihood as shippers turn to use safer alternative harbors instead.

    Statists don't understand incentives. They don’t understand how incentives and costs get passed along. The “Who would build the lighthouses?” question implies that without government using force to build them, lighthouses would not be built at all. Presumably then, ships by the dozens would founder on the rocks year after year destroying orders of magnitude more wealth than it would take to just build a lighthouse. Meanwhile everyone with a financial stake in those lost ships and that harbor losing all that money would nevertheless be paralyzed into inaction. They would just sit around gnashing their teeth because they couldn’t come up with a direct revenue model guaranteed to perfectly fairly charge each and every ship in sight a pro-rata share of lighthouse costs. As if that’s the only way to fund a lighthouse and those ships are the only ones who stand to gain from a lighthouse. The absurdity of this presumed scenario hardly needs refuting.

  5. I've refined my response to the "but we have to have g'mint for ..." to "Of coarse we need ..., but is a monopoly the best way to provide it? Why not force g'mint service providers to compete for customers?" The most common response is "How would that work?" "Much better" is my answer. They usually don't agree, but the seed is planted.

  6. I think the problem with this “which is better” approach is people are extensively conditioned to believe a state monopoly is fundamentally superior for "certain things.” People won’t deprogram themselves and our argumentation workload to exhaustively do so in each and every subject area is enormous.

    Moreover, Democrats and Republicans already have similar raging “which is better” debates that in the end achieve nothing for liberty. I believe this approach to be futile because it already grants the statist premise that state violence remains exempted from ordinary morality and thus is as good a tool as any. This renders the free-market vs. the state question a matter of personal opinion.

    That’s exactly how those in power want to keep it. Because on that basis, the logic of abstract free market economic and philosophical arguments backed only by hypotheticals fares poorly up against the emotional glow supplied by extensive, robust statist apologetics, mass societal approval, and flows of unearned wealth.

    The argument from morality cuts through all this in one fell swoop. It leverages people’s already existing abhorrence of aggressive violence. Successfully getting people to see state aggression for what it is will render moot in their minds questions of practicality and even render ineffective tangible incentives to embrace statism. This is the sort of powerful medicine we need.

    If we can win the moral argument, at most we’ll need only to convince people of the plausible viability of free-market solutions in areas like lighthouses. “Morality and viability” is a lot more manageable case to make than “universal practical superiority.” And the outcome is more likely to be real, permanent devotion to liberty in all spheres.