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Ronald Coase, the lighthouse, and free banking

Ronald Coase died earlier this week at age 102. Not only was he the longest-lived major economist I know of, but he was the most pithy.  His major writings could easily fit in a small book, they are accessible to an educated general reader, and they also repay deeper study. Would that we could all be like that.

One of Coase's articles was "The Lighthouse in Economics." Coase pointed out that, contrary to textbook assertions that lighthouses were an example of a public good that could not be privately provided, private lighthouses had existed and thrived in England. Coase's method–if it is true in practice, it must be possible in theory–is an excellent one to apply across all branches of economics. Those of us who blog on this site who have written about the history of free banking in Britain (Larry White), the history of private coinage in Britain (George Selgin), the history of free banking around the world (me), or the history of free banking and regulation in the United States (Steve Horwitz) have all drawn some inspiration from Coase's essay. What Coase scorned as "blackboard economics" persists in monetary theory, though, where free banking generally receives little or no attention in standard textbooks and treatises.