Ronald Coase

On Monday, Ronald Coase, a 1991 Nobel Laureate in Economics died four months short of his 102d birthday.   There are a lot of intriguing things about Coase.    Coase was most celebrated for discussions of social cost and a theory of the firm.   The WP did a summary of five of the branches of theory for which he should be remembered.   That is both a pretty good list and a short summary of some pretty elegant work.  

I want to note two things about Professor Coase.    First, comes from the last paper cited in the Post article - the Lighthouse in Economics.  As the theory of public goods developed, especially in books like Paul Samuelson's Economics - lighthouses were often cited as good examples of public goods.   The traditional definition of public goods are those things in society which are non rival and non exclusionary.   Writers like Samuelson argued that the consumption of what a lighthouse produces does not diminish the ability of more than one ship to consume and at the same time because they helped ships at sea - it was impossible to exclude ships that did not pay.   In the article Coase said he was bothered by the logic and thus went back and did the empirical research and found that for British shipping there was indeed a way to get ships passing a point to pay for the service.  

The second issue came about as a result of an Econtalk podcast in May 2012.  Russ Roberts interviewed Coase a bit more than a year ago.  At the time Professor Coase was frail in body but not in thought.   The hour is well worth listening to - to hear him describe his thoughts on all sorts of issues as well as to explain that at 102 he had just finished a book on the Chinese economy.   He was an active scholar throughout his life.   Throughout his life Coase emphasized two important concepts for any scholar - he was rarely content to sit idly by.   At the same time he was remarkably willing to listen and discuss theory (even his own) and to be informed of other points of view.