I\’m sorry, but I think we\’ll need to take that Nobel Prize back Professor Krugman.
Really, we will:
But both sides, I thought, agreed that the government should provide public goods — goods that are nonrival (they benefit everyone) and nonexcludable (there’s no way to restrict the benefits to people who pay.) The classic examples are things like lighthouses….
Erm, lighthouses might not in fact be public goods:
This paper challenges the traditional view that lighthouses are examples of public goods by showing that privately owned lighthouses existed in England. Coase aligned lighthouses more with club goods because they are excludable by way of charging port fees.
And even if they are public goods it\’s still not true that they have to be provided by Government:
Trinity House is financed from “Light Dues” levied on commercial shipping calling at ports in the United Kingdom.
If you\’re not careful we\’ll ask for that cheque back as well.