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There was something of additional interest in Brad DeLong's original posting:
"But Coase's argument seemed to me to have a big problem. The
relationship between the ship's pilot and Trinity House was not that
of a customer free to purchase or not purchase a service from a
private corporation. The relationship was that of a subject paying
taxes to a government: if you didn't pay Trinity House, then the
Royal Marines would confiscate your ship and throw you in gaol."
Aside from Thomas Jackson's points regarding the actual relationship between
Trinity House and the Crown, Brad's point suggests that some private
arrangements can closely mimic governmental relationships. If failure to pay
for a public good can be enforced, does it make a difference whether the
enforcing agency is labelled "government?" And if not, then in what sense is
Coase a refutation of Pigou?
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Christopher Grandy
Economist
Department of Business, Economic Development & Tourism
State of Hawaii
P.O. Box 2359
Honolulu, Hawaii 96804
(808) 586-2478
(808) 586-8449 (fax)
grandy@dbedt.hawaii.gov
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