Economist Coase Studies People, Companies, Not Abstractions
In 1991, economist Ronald Coase was awarded the Nobel Prize for Economics for his role in studying and clarifying the role of transaction costs and property rights that became known as the Coase Theorem. Today, at age 102, Coase is increasingly disillusioned with the data and mathematical nature of modern economics and urges the upcoming generation of economists to study instead the behavior of humans and companies—a philosophy that is right in line with that of Austrian economist Ludwig von Mises.
The Coase Theorem holds that where there is a conflict of property rights, the parties at odds will come to a fair resolution based that yields the highest profit for all, without a government or law-imposed solution. According to Investopedia:
Most people assume Coase invented the Coase Theorem. According to Coase himself, it was Coase’s fellow Nobel laureate George Stigler who invented the theorem and who named it after Coase in recognition of Coase’s work in understanding the effect of transaction costs.
At the time of Coase’s Nobel Prize, he was considered an unlikely choice, not because he wasn’t aContinue Reading →
At age 102, economist Ronald Coase lobbies for a paradigm shift in economics—away from numbers and abstractions, toward companies and people. “The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate,” he writes.