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Coase and the light pole

August 14, 2007

Tags Legal SystemInterventionismPrivate Property

Coasian ethics have come to roost in Ohio, or roast as the case may be (roasted soybeans in this instance).

The Columbus Dispatch reported that an Ohio Court of Claims judge has sided with the state department of transportation in a suit brought forth by a farmer who claimed that his soybean crop was stunted by high-mast lighting along a state highway.

While everyone agrees that the farmer suffered a loss, the judge sided with the state agency, concluding that "while (the farmer) may have suffered more than others because of the lighting, his situation was not unique."

The judge reached his decision based on arguments from the state agency that ruling in the farmer's favor would "invite millions of dollars in legal claims from others who suffer from the effects of living near highways." And, the state certainly can't have that.

So, assigned property rights leave the courtroom when the state is involved. And, the greater the potential loss to the state, the less likely that courts will hold the state liable. Sound pretty utilitarian since the state — by standard definition — produces societal benefits far exceeding those produced by acting individuals — a farmer in this instance.

This case should make for a great addition to debates over real-world applications of Rothbardian/Hoppean property rights and the Coase Theorem.

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