RIP Ronald Coase, the economist who hated math.

• Author: Doherty, Brian
• Position: Follow-Up - In memoriam

Ronald Coase, winner of the 1991 Nobel Memorial Prize in Economics, died in September at age 102. Thomas Hazlett interviewed Coase in our January 1997 issue. In the introduction, Hazlett explained part of what made Coase unusual for an economist: "No one could remember a single equation, an estimated parameter, a correlation coefficient--nary a Greek symbol--in any of his articles."

Without math, Coase provided unusually fruitful insights that shaped the economics profession, producing two papers that remain among the most cited in the literature. The first was his 1937 article, "The Nature of the Firm," which, as Hazlett explained, outlined "the subtle logic of how firms pursue efficiency in a complicated world." The second was the i960 essay "The Problem of Social Cost." That article looked at how market actions affected third parties. "Before Coase," wrote Hazlett, economic analysis maintained that the market "would predictably fail to achieve an optimal solution"--an idea Hazlett said "provided intellectual justification for a wide range of government interventions."

Coase's insight was "that once property was well-defined and easily tradable ... the optimal social outcome would obtain no matter who owned the property.... Hence, whenever someone clearly possessed the right to pollute: Voila! Social efficiency! This became famously known as the Coase Theorem."

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