The Remarkable Coase

In preparing for some upcoming classes on the Coase Theorem, I came across a few interesting tidbits that I’d seen before but I thought would be worth posting.

This, from George Stigler, on Coase’s ability to persuade some skeptical colleagues:

We strongly objected to this heresy. Milton Friedman did most of the talking, as usual. He also did much of the thinking, as usual. In the course of two hours of argument the vote went from twenty against and one for Coase to twenty-one for Coase. What an exhilarating event! I lamented afterward that we had not had the clairvoyance to tape it.

And the fraction of his total publications that have become true classics is astounding.  Just consider that two of his twelve notable papers – “The Nature of the Firm” and “The Problem of Social Cost” – are among the most well-known papers of the 20th century (and they used little or no mathematics – imagine that).

By the way, Coase is apparently still going strong at the ripe old age of 102.

James Buchanan, 1919-2013

Sad news – Nobel laureate James Buchanan passed away today.  Here’s the Wikipedia page on him.  And this from the Library of Economics & Liberty, which has his collected works available online here.  William Shughart has a good overview of the field of Public Choice, which Buchanan helped create, here.

2012 Nobel Prize in Economics

To Alvin Roth and Lloyd Shapley “for an outstanding example of economic engineering.”  I assign Roth’s “Repugnance as a Constraint on Markets” in my Political Economy/Institutions class – anyone who has a paper that includes an analysis of “dwarf tossing,” as Roth does, deserves the Nobel.

Nobel Prize Predictions

The Thomson Reuters predictions for the 2012 Nobel Prize in Economics, which is announced on October 15, are below (last year, my prediction was a Tullock and Krueger prize, so I might as well use it again).

Interview with Amartya Sen

Via Lars Syll and Gavin Kennedy  (both excellent blogs, by the way) here is an interview with Nobel laureate Amartya Sen who has long had a deep appreciation for the history of economic thought:

Q:  You make a lot of references to old economic thinkers like Smith, Keynes and so on. However, if you look at the current economic research that is published in the journals and taught at universities, the history of economic thought does not play a big role anymore…

 

A:  Yes, absolutely. The history of economic thought has been woefully neglected by the profession in the last decades. This has been one of the major mistakes of the profession. One of the earliest reminders that we are going in the wrong direction has come from Kenneth Arrow about 30 years ago when he said: These days, I get surprised when I find the students don’t seem to know any economics that was written 25 or 30 years ago.

 

Q:  Is there any hope that this trend can be reversed?

 

A:  Yes, I’m quite optimistic in this regard. I get the impression that this seems to be getting corrected right now. I’m particularly delighted that the corrective has come to a great extent from student interest. I’m very struck by the fact that at the university where I teach – Harvard – the demand for more history of economic thought has mostly come from students. As a result there is a lot more attempt by the department of economics as well as history and government to look for the history of political economy. Last year, along with my wife Emma Rothschild, I offered a course on Adam Smith’s philosophy and political economy. It drew a lot of interest and we got some of the finest students at Harvard.

Tribute to Anna Schwarz

Via Greg Mankiw, here are David Romer’s comments on Anna Schwarz who recently passed away:

To honor her, we also need to keep our discussions and debates focused on the substantive questions at hand and firmly grounded in the evidence. And we need to be flexible and open-minded, willing to cheerfully change our minds even if it’s about a position we’ve argued for tenaciously for decades – as Anna did on the question of whether targeting monetary aggregates is a good way to conduct monetary policy.

 

But to truly honor Anna, what you need to do is to go back to your university or wherever you work after the conference is over, and do work that’s so damn good that it changes the way we think about basic questions in macroeconomics, and that’s so damn careful and thorough that fifty years from now, it’s still the first place that people look when they want to learn about an issue that your work addresses.

 

And, you’ll keep doing that work for decades. To put Anna’s research longevity in perspective, if you’re currently finishing your second year in graduate school, you’re probably about the same age that Anna was when she published her first paper. To match Anna’s research longevity, you’ll need to stay actively involved in important research until about 2080.

Romer is exactly right when he says that really good work, such as you find in Friedman & Schwarz, is the first place people look to learn about an issue.  The day before Schwarz died, in fact, I had my well worn copy of A Monetary History (published nearly 50 years ago) open on my desk for their insights into the silver-gold debates of the late 19th century.  It is indeed the first reference on many of the important economic history questions.