I tend to regard the Coase theorem as a stepping stone on the way to an analysis of an economy with positive transaction costs.
Changes like the telephone and telegraphy, which tend to reduce the cost of organizing spatially, will tend to increase the size of the firm.
I'm no enthusiast for the Coase Theorem. I don't like it, but it's widely used.
I've been wrong so often, I don't find it extraordinary at all.
In my long life, I have known some great economists, but I have never counted myself among their number nor walked in their company.
People have used my views for purposes which are very different from mine.
Technology is at a point where we should allow multiple parties to occupy the same spectral space.
The law of property determines who owns something, but the market determines how it will be used.
What I have done is to show the importance for the working of the economic system of what may be termed the institutional structure of production.
You get more irrationality within the family and in consumer behavior than you get, say, in the behavior of firms in their purchases.
You wouldn't think there was a need for a Coase Theorem, really.
Despite all the efforts of art dealers, the number of Rembrandts existing at a given time is limited; yet such paintings are commonly disposed of by auction.
During the two centuries since the publication of 'The Wealth of Nations,' the main activity of economists, it seems to me, has been to fill the gaps in Adam Smith's system, to correct his errors and to make his analysis vastly more exact.
Economics as currently presented in textbooks and taught in the classroom does not have much to do with business management, and still less with entrepreneurship.
Roughly speaking, when you are dealing with business firms operating in a competitive system, you can assume that they're going to act rationally. Why? Because someone in a firm who buys things at $10 and sells them for $8.00 isn't going to last very long in that firm.
For un-subscribe please check the mail footer.