ng for another good that can be metered more cheaply and that can serve as a reasonable proxy for usage of the good that needs to be metered. This solution is suggested by Ronald Coase's classic critique of lighthouses as pure public goods (1974). Lighthouses have long been regarded as posing a paradigmatic example of a market failure in need of governmental redress. The standard account posits that the fact that the difficulties that lighthouse owners face in securing payment from ships that benefit from the services they provide prevents lighthouse owners from generating sufficient revenue to cover their costs. Restated in terms relevant for our purposes, the difficulties in metering the usage of lighthouse services introduce an externality that creates a wedge between private and social net product. The resulting distortion in the market for lighthouse services caused by the presence of metering costs is generally regarded as providing a classic case for governmental intervention. Coase rebutted this account by pointing out that throughout most of the 17th and 18th centuries British lighthouses were operated by private, profit-making enterprises. Lighthouse owners were able to finance their lighthouses through tolls collected at nearby ports, because presumably only those ships that were preparing to enter port would come close enough to shore to have need of the lighthouse's services. Port usage thus represented an easily metered proxy for determining which ships had benefited from the services of nearby lighthouse. The historical record suggests that this system was quite successful. As of 1820, thirty-four of the forty-six lighthouses in existence had been built by private individuals. Over time, these private lighthouses began to be taken over by a quasi-governmental organization known as Trinity House. Even after being acquired by Trinity House, they continued to be privately financed through user fees rather than through tax revenues. Coase's analysis of lighthouse financing suggests that framing the deb