Ronald Coase (1910-2013)

2 September 2013 at 9:40 pm 4 comments

| Peter Klein |

Ronald Coase passed away today at the age of 102. One of the most influential economists of the 20th century, perhaps of all time. His “Problem of Social Cost” (1960) has 21,692 Google Scholar cites, and “The Nature of the Firm” has 24,501. Adam Smith’s Wealth of Nations, summed across editions, has about 30,000. Coase changed the way economists think about the business firm and the way they think about property rights and liability. He largely introduced the concepts of transaction costs, comparative institutional analysis, and government failure. Not all economist have agreed with his arguments and conceptual frameworks, but they radically changed the terms of debate in the economics of law, welfare, industry, and more. He is the key figure in the “new institutional economics” (and co-founder, and first president, of the International Society for New Institutional Economics).

Coase did all these things despite — or because of? — not holding a PhD in economics, not doing any math or statistics, and not, for much of his career, working in an economics department.

We’ve written so much on Coase already, on these pages and in our published work, that it’s hard to know what else to say in a blog post. Perhaps we should just invite you to browse old O&M posts mentioning Coase (including this one, posted last week).

The blogosphere will be filled in the coming days with analyses, reminiscences, and tributes. You can find your favorites easily enough (try searching Twitter, for example). I’ll just share two of my favorite memories. The first comes from the inaugural meeting of the International Society for New Institutional Economics in 1997. After a discussion about the best empirical strategy for that emerging discipline. Harold Demsetz stood up and said “Please, no more papers about Fisher Body and GM!” Coase, who was then at the podium, surprised the crowd by replying, “I’m sorry, Harold, that is exactly the subject of my next paper!” (That turned out to be his 2005 JEMS paper, described here.) A few years later, I helped entertain Coase during his visit to the University of Missouri for the CORI Distinguished Lecture. At lunch we talked about his disagreement with Ben Klein on asset specificity. After the lunch he got up, shook my hand, and announced, with evident satisfaction: “I see all Kleins are not alike.”

Entry filed under: - Klein -, Institutions, Law and Economics, New Institutional Economics, People, Theory of the Firm.

The Journalists and Syria A Haiku for Coase

4 Comments Add your own

  • 1. Joe Mahoney  |  3 September 2013 at 8:37 am

    My one meeting with Ronald Coase was at the University of Chicago Law School in June 1990 for the “Coase Conference.” I was one of only two Strategy folks in attendance. Professor Coase made a point to greet me, which I greatly appreciated. At that Conference I remember during Scott Masten’s (Michigan) talk, a street person and a quite large man entered the Law School room. There was complete silence in the room for 30 seconds. He then observed: “Hey, there are no women here” and left the room. Of the many insightul moments at the conference, I thought he provided astute social commentary. With about 50 scholars in attendance, I recall that Mary Streitwieser (NBER) and Annette Poulsen (University of Georgia) were the only two women in attendance. I am grateful to Professor Coase for the role he played in my education.

  • […] Ronald Coase’s Nobel Prize Lecture. University of Chicago’s Becker Friedman Institute Obituary Peter Klein Bloomberg Obituary Geoffrey Manne Truth on the Market Wall Street Journal Obituary Financial Times […]

  • 3. Jongwook Kim  |  3 September 2013 at 7:54 pm

    The number of citations (as amazing as it is) does not do justice to the impact. As a strategy person, upon hearing the news of Professor Coase’s passing, I asked myself what the field of strategy would have been like without Coase (1937) and Coase (1960)? I am not sure, but I think much less interesting. And who would think of pairing “Organizations and Markets” into the name of a blog!!

  • 4. Peter Klein  |  3 September 2013 at 8:56 pm

    Jongwook, that’s definitely his greatest legacy! :)

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
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