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Coase and The World that Was

While it was sad to hear of the passing of Ronald Coase, what joy to reflect on one of the great scholarly lives.  Coase was still able to publish a book at the age of 101, 75 years after writing his classic article on the nature of the firm.  Amazing!

In reflecting and reviewing materials on Coase’s life, I was struck by how things seemed different 50 years ago.  First, there is the story of how Coase (and Buchanan and Tullock) were chased away from the University of Virginia Economics Department because of opposition to their market thinking.  This story needs to be better known than it is.  The Department lost two Nobel laureates and a third scholar who deserved it — a high price for ideological prejudice.   I wonder if that Department is happy now about its scheme.  (I thought there was also a charitable foundation involved in this scheme, but perhaps I am misremembering the story.)

These days there is certainly political prejudice against right wing views, but markets views are much less opposed than they used to be.  Now, it is some right wing views on social issues that draw the strongest ire.

Second, I recommend this short video on Coase and the regulation of radio spectrum.  When Coase suggested that property rights and the market could handle the radio spectrum, the response was disbelief.  Again, the world has changed a bit.  The virtues of Coase’s approach are now somewhat understood, but as the video makes clear, the regulatory approach used for the spectrum does not, in the main, follow sensible market solutions. 

And finally let us remember what was one of Coase’s triumphs — the famous story of how Coase, at a dinner party, convinced the University of Chicago Economics Department that the Coase Theorem was correct.  See here for the story.

Reader Discussion

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on September 06, 2013 at 13:48:14 pm

Ah, but Dr. Rappaport, those folks who dissed the folks referenced at the Univ. of Va. were those who want to use government to reshape mankind to their own way of thinking, never dreaming that some folks like to be free and have rights, including property, etc. The folks who want to run things for everyone, I was informed nearly 50 years ago, would win in the end. I thought that fellow was wrong, when the Berlin Wall came down, but then I have seen the same kind of view that produced both Communism and Nazism rise up in this nation, though it is not called by those names. The question is what is one supposed to do, when the money dictates that there are no really acceptable alternatives promoted in the mass media?

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dr. james willingham
on April 29, 2014 at 02:51:26 am

There is a story about a Maori women who inherited 17000acres of land in Whakapuaka just ouistde of Nelson in the late 1800s. The title was free and clear when her father died. Her cousins were a bit jealous of her, because she leased the land to some pakeha farmers who ran sheep on it, tilled the soil and paid their rent.She of course recognised that the land was generating a nice income tyvm, one that afforded her the ability to live in a large house, with a tennis court, run some sheep herself, and so be in meat all year round. She refused all attempts to sell it. Her cousins tried 10 times to get the courts to recognise their claim on the land.Finally they managed to get 20% of the land. Sure enough it was gone within a very short period of time after the cousins 'ownership'.By 1955 the entire stake was sold off, and the cussies had nothing.Free holding title in this manner would result in exactly the same scenario, as PC points out. But the good thing about it, that the titles would be issued for time immemorial and the Maaori would have their treaty claims repaid in full, with finality, and it would cost the taxpayer nothing more than a survey, and some historians to allocate the land appropriately.... but that could be a major problemhow do you fulfill that element? do you just say righto theres 575000 Maori descent people lets give them all title to x sqm and then issue the land accordingly?

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Clark

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