Ronald Coase: You wouldn't think there was a need for a Coase Theorem,...

I can't remember one [example of regulation] that's good. Regulation of transport, regulation of agriculture - agriculture is a, zoning is z. You know, you go from a to z, they are all bad. There were so many studies, and the result was quite universal: The effects were bad.

Ronald Coase

agriculture regulation study

If you torture the data long enough, it will confess.

Ronald Coase

data truth knowledge

Economics, over the years, has become more and more abstract and divorced from events in the real world. Economists, by and large, do not study the workings of the actual economic system. They theorize about it. As Ely Devons, an English economist, once said in a meeting: 'If economists wanted to study the horse, they wouldn't go around and look at horses. They'd sit in their studies and say to themselves, `What would I do if I were a horse?' '

Ronald Coase

horse real years

Data can't speak for itself; it's up to you to give it a voice. Try to speak truthfully.

Ronald Coase

data voice giving

A firm, therefore, consists of the system of relationships which comes into existence when the direction of resources is dependent on an entrepreneur... As a firm gets larger, there may be decreasing returns to the entrepreneur function, that is, the costs of organising additional transactions within the firm may rise.

Ronald Coase

entrepreneur cost may

Existing economics is a theoretical system which floats in the air and which bears little relation to what happens in the real world.

Ronald Coase

real air world

If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, "what would I do if I were a horse?"

Ronald Coase

horse study looks

We must first note that economic factors are taken into account in a world in which ignorance, prejudice, and mental confusion, encouraged rather than dispelled by the political organization, exert a strong influence on policy making.

Ronald Coase

strong ignorance taken

Outside the firm, price movements direct production, which is co-ordinated through a series of exchange transactions on the market. Within a firm, these market transactions are eliminated and in place of the complicated market structure with exchange transactions is substituted the entrepreneur-co-ordinator, who directs production.

Ronald Coase

entrepreneur movement complicated

It is clear that these are alternative methods of co-ordinating production. Yet, having regard to the fact that, if production is regulated by price movements, production could be carried on without any organization at all might we ask, why is there any organization?

Ronald Coase

alternatives movement organization

In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us.

Ronald Coase

cost facts thinking

In my youth it was said that what was too silly to be said may be sung. In modern economics it may be put into mathematics.

Ronald Coase

youth silly may

I hate when people ask me to: "Massage the data".

Ronald Coase

data hate people

Ronnie had it right calling it Torture. That is a much more accurate description the way I see it.

Ronald Coase

description calling way

The pollution problem is always seen as someone who was doing something bad that has to be stopped. To me, pollution is doing something bad and good. People don't pollute because they like polluting. They do it because it's a cheaper way of producing something else.

Ronald Coase

good me pollution people

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.

Ronald Coase

economics taught business management

I'm no enthusiast for the Coase Theorem. I don't like it, but it's widely used.

Ronald Coase

enthusiast theorem like used

In my long life, I have known some great economists, but I have never counted myself among their number nor walked in their company.

Ronald Coase

great myself life long

The law of property determines who owns something, but the market determines how it will be used.

Ronald Coase

something will how law

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.

Ronald Coase

someone you business long

You wouldn't think there was a need for a Coase Theorem, really.