Ronald Coase, anomalous superstar of the economics profession.

• Author: Higgs, Robert
• Position: Etceteras ... - Obituary

Ronald Coase, one of the most important contributors to economics during the past century, died on September 2, 2013, at the age of 102. During his long career as an academic economist, Coase had a great impact on the mainstream economics profession. His work became a fundamental source for the creation of two new subfields of economic study known as "the new institutional economics" and "law and economics." He gave a great boost to the incorporation of property rights and "transaction costs" into many types of economic analysis. (1)

Coase's work also had a major effect by inspiring economists to challenge the "new welfare economics," a body of analysis developed during the first half of the twentieth century that purports to show the v ulnerability of market economies to various sorts of "market failure." Following Coase's lead, public-choice analysts and other economists undertook to turn allegations of market failure on their head and to show that in many cases the alleged problem springs more fundamentally from "government failure," such as the failure to establish and enforce well-defined private-property rights in valuable resources.

At the University of Washington, where I taught from 1968 to 1983, Coase's work inspired a great deal of important work by Douglass C. North and Robert Paul Thomas (1973), North alone (1981, 1990), Yoram Barzel (1989), Steven N. S. Cheung (1969, 1973), and others, including myself. Like the economists working along similar lines at the University of California at Los Angeles as well as at Virginia, Rochester, and Chicago, we did not agonize over the correct interpretation of what George Stigler had dubbed "the Coase Theorem" or fret about the propriety of Coasian judges assigning property rights to promote efficient outcomes, but rather for the most part we took up the challenge of empirical research aimed at finding and analyzing overlooked market arrangements in cases where mainstream economists had alleged the prevalence of market failures. For example, Cheung (1973) revealed that bees do not always provide uncompensated pollination services and thereby generate a market failure, as neoclassical welfare economists had claimed, but instead that bee keepers enter into elaborate contracts with orchard owners to provide such services in exchange for substantial, well-specified fees. Cheung and I as well as my Washington Ph.D. student Lee Alston revived the analysis of sharecropping and other agricultural...