<P> The world of zero transaction costs has often been described as a Coasian world . Nothing could be further from the truth . It is the world of modern economic theory, one which I was hoping to persuade economists to leave . What I did in "The Problem of Social Cost" was simply to shed light on some of its properties . I argued in such a world the allocation of resources would be independent of the legal position, a result which Stigler dubbed the "Coase theorem ." (...) </P> <P> Thus, while Coase himself appears to have considered the "Coase theorem" and Coasian solutions as simplified constructs to ultimately consider the real 20th - century world of governments and laws and corporations, these concepts have become attached to a world where transaction costs were much lower, and government intervention would unquestionably be less necessary . Is there room in the 21st century for something closer to this ideal? </P> <P> A minor alternative, especially for information goods, is for the producer to refuse to release a good to the public until payment to cover costs is met . Author Stephen King, for instance, authored chapters of a new novel downloadable for free on his website while stating that he would not release subsequent chapters unless a certain amount of money was raised . Sometimes dubbed holding for ransom, this method of public goods production is a modern application of the street performer protocol for public goods production . Unlike assurance contracts, its success relies largely on social norms to ensure (to some extent) that the threshold is reached and partial contributions are not wasted . </P> <P> One of the purest Coasian solutions today is the new phenomenon of Internet crowdfunding . Here rules are enforced by computer algorithms and legal contracts as well as social pressure . For example, on the Kickstarter site, each funder authorizes a credit card purchase to buy a new product or receive other promised benefits, but no money changes hands until the funding goal is met . Because automation and the Internet so reduce the transaction costs for pooling resources, project goals of only a few hundred dollars are frequently crowdfunded, far below the costs of soliciting traditional investors . Other crowdfunded projects have raised over a million dollars, like the Arkyd - 100 space satellite telescope funded on Kickstarter in June 2013 . It would seem to be a clear instance of a Coase solution when a public good that always required government sponsorship in the 20th century can be efficiently organized from 18,000 individuals' self - interest (including rewards such as an orbital "selfie", and five minutes of observation time donated in their name to find potential killer asteroids). </P>

The government uses its resources to provide different public goods. this shows that