Salute to Ronald Coase, 1910-2013
Ronald Coase, 1910-2013
I salute the life and mourn the passing of Ronald Coase, Nobel laureate in economics. If one listed the ten most influential articles in microeconomic theory of the twentieth century, two would surely belong to Coase—his papers on the nature of the firm and the problem of social costs.
In 2009, at the initiative of the Tilburg Law and Economics Center (TILEC), Ronald Coase agreed that a professorial chair be named in his honor at the Tilburg Law School in recognition of his scholarly achievements and his seminal contributions to law and economics as an academic field. It was my great honor to be the first person appointed the Ronald Coase Professor of Law and Economics at Tilburg University and to hold this chair today.
Coase was an astute empiricist, yet he avoided mathematics and econometric models. He abhorred what he called in his Nobel lecture “blackboard economics,” by which he meant economic theories derived from mathematical models detached from actual observation of how markets and firms operate. He was firmly grounded in an understanding of how property rights and transactions costs could explain real-world business practices. Even his crowning theoretical insight, the Coase Theorem, is immensely practical. Policies predicated on its elucidation of property rights have shaped how most nations use market mechanisms to allocate radio spectrum, as Coase recommended in the 1950s. Every time we use our smartphones, we are reminded of the power of Ronald Coase’s ideas.