Ronald Coase is usually considered anything but a methodologist. Thus, it is not surprising that, in the introduction to "How Should Economists Choose?", which is the only paper Coase wrote on a methodological topic, he readily confessed his relative ignorance of philosophy of science, candidly observing that "Words like epistemology do not come tripping from my tongue" (HSEC, 6). However, given the importance of this Nobel Prize winner's contribution to the renewal of theoretical thinking in economics, everyone (...) should admit that his infrequent reflections on methodology, however crude they might look to methodologists, undoubtedly merit close consideration. Whatever methodological clarification these reflections might procure, it is surely worthwhile briefly to analyze them, with the hope of understanding a little better some dimensions of Ronald Coase's way of thinking and, more specifically, of emphasizing some implications of the close relationship between his methodological views and his radical conception of the market. With this in mind, I will first illustrate how far these methodological views seem, at first glance, to be dominated by a fundamental commitment to a straightforward realism; I will then show that they are instead subordinated, in a more complex way, to what I have just called Coase's radical conception of the market and, in conclusion, I will point out some questions raised by this situation. (shrink)

Ronald Coase has been a vigorous critic of mainstream economic theory, arguing that it is unrealistic and that a good theory is realistic. The attributes "realistic" and "unrealistic" appear in three senses at least in Coase: one related to narrow ness and breadth; another related to abstracting from particularities (and the issue of "blackboard economics"); and the third related to correspondence with the legal. This does not yet make Coase an advocate of realism. It is therefore (...) separately argued that each of the three kinds of "realisticness" as a property of theories is consistent with realism as a theory of theories. (shrink)

ABSTRACT Ken Hanly's recent article in this Journal (Vol. 9, No. 1, 1992) takes issue with Ronald Coase's approach to resolving problems of externalities, as set forth in his classic paper ‘The Problem of Social Cost’. I argue that Hanly's discussion of Coase misinterprets or inappropriately rejects certain aspects of Coase's analysis, specifically, with regard to the reciprocal nature of externalities and the economic role of government. The resolution of externality problems is presented as an issue (...) of selective normative choice as to whose interests are to count; neither efficiency nor morality claims are uniquely dispositive of the issue. (shrink)

This essay explores the detailed argument of the Coase Theorem, as found in Ronald Coase’s “The Problem of Social Cost” and subsequently defended by Coase in The Firm, the Market, and the Law. Fascination with the Coase Theorem arises over its apparently unassailable counterintuitive conclusion that the imposition of legal liability has no effect on which of two competing uses of land prevails, and also over the general difficulty in tying down an unqualified statement of (...) the theorem. Instead of entering the debate over what exactly the theorem holds, this article suggests that the core of Coase’s reasoning is flawed and to the extent that any version of the theorem relies upon this reasoning it can be disproved. It is further suggested that a version of the theorem which avoided the need for Coase’s core argument by focusing on “the efficiency thesis” at the expense of “the invariance thesis” would be insufficiently significant to merit the status of a theorem; and that, in any event, Coase’s reasoning does not sustain an efficient outcome. The heart of the essay comprises the allegation of an error made by Coase when he transferred his core argument to the context of economic rents. The essay commences by considering and modelling the nature of the counter-intuitive thrust to the Coase Theorem, which is used to trace the development of Coase’s reasoning, and ultimately to expose the flaw it contains. Ancillary observations are made on the relationship between the Coasean analysis of characteristically legal problems and the conditions of general market equilibrium, and the theoretical status of law-and-economics. (shrink)

The theory of the firm initially developed by Ronald Coase has made explicit the political nature of firms by putting hierarchy at the heart of the economic process. Theories of workplace democracy articulate this intuition in the normative terms of the conditions under which this political power can be legitimate. This paper presents an organizational theory of workplace democracy, and contends that the democratization of firms requires that we take their organizational dimension explicitly into account. It thus construes (...) democracy as an organizational principle and juxtaposes it to market, hierarchy, and norm-compliance as rival principles for the organization of economic activities. Attempts to construe democracy as an organizational principle with unique features in the tradition of transaction-cost economics are discussed before proposing an innovative solution based on an updated version of grid/group cultural theory of politics, adjusted to accommodate the basic requirements of democratic theory. (shrink)

Idealizations help us understand the world by simplifying it. When factors make discrete contributions to an outcome, leaving factors out can make it easier to identify the contributions of factors that remain. But typically in economics, factors are not discrete but interact; how can isolating some factor X from some factor Y help us understand a reality in which X’s contribution depends on what Y contributes? I argue that Ronald Coase’s method in ‘The Problem of Social Cost’ illustrates (...) how idealization can aid our understanding of a world in which factor Y (transaction costs) has an effect on factor X (transactions), by making plain precisely that effect, and so making it easier to see features of the actual world that obtain because of that effect. ‘Coasean’ idealization is therefore especially useful for understanding targets in which factors are not discrete but interact, as is so often the case in economics. (shrink)

Fifty years after the famous essay “The Problem of Social Cost” (1960) by the Nobel laureate Ronald Coase, Law and Economics seems to have become the lingua franca of American jurisprudence, and although its influence on European jurisprudence is only moderate by comparison, it has also gained popularity in Europe. A highly influential publication of a different nature was the Brundtland Report (1987), which extended the concept of sustainability from forestry to the whole of the economy and society. (...) According to this report, development is sustainable when it “meets the needs of the present without compromising the ability of future generations to meet their own needs”. A key requirement of sustainable development is justice to future generations. It is still a matter of fact that the law as well as the theories of justice are generally restricted to the resolution of conflicts between contemporaries and between people living in the same country. This in turn raises a number of questions: what is the philosophical justification for intergenerational justice? What bearing does sustainability have on the efficiency principle? How do we put a policy of sustainability into practice, and what is the role of the law in doing so? The present volume is devoted to these questions. In Part One, “Law and Economics”, the role of economic analysis and efficiency in law is examined more closely. Part Two, “Law and Sustainability”, engages with the themes of sustainable development and justice to future generations. Finally, Part Three, “Law, Economics and Sustainability”, addresses the interrelationships between the different aspects. (shrink)

The Virginia School's economics of natural equals makes consent critical for policy. Democracy is understood as government by discussion, not majority rule. The claim of efficiency unsupported by consent, as common in orthodox economics, appeals to social hierarchy. Politics becomes an act of exchange among equals where the economist is only entitled to offer advice to citizens, not to dictators. The foundation of natural equality and consent explains the common themes of James Buchanan and John Rawls as well as (...) class='Hi'>Ronald Coase and the Fabian socialists. What orthodox economics treats as efficient racial discrimination violates the fair chance entitlement to which people consent in a market economy. The importance of replication stressed by Gordon Tullock, developing themes from Karl Popper, is another expression of natural equality since the foresight of replication induces care into research. The publication of previously unpublished correspondence and documentation allows the reader to judge recent controversy. (shrink)

Mit der Gründung der Zeitschrift The Journal of Law and Economics im Jahr 1958 hatte sich die neuere ›ökonomische Theorie des Rechts‹ endgültig als Spezialdisziplin etabliert. Im gleichen Jahr schloss sich Ronald Coase der University of Virginia, UVA, Charlottesville an. Am dortigen Economics Department wirkte bereits James M. Buchanan. Mag die persönliche Chemie zwischen den beiden späteren Nobelpreisträgern auch nicht ideal gewesen sein, gemeinsam war ihnen das Interesse an der Behandlung sogenannter ›Externalitäten‹ und damit inter-individueller Auswirkungen menschlichen Verhaltens, (...) die nicht durch inter-individuelle Vereinbarungen autorisiert und in diesem Sinne vertraglich ›internalisiert‹ worden sind. (shrink)

Faculty of Law and Department of Philosophy, University of Toronto 1. INTRODUCTION The economic analysis of law has gone through a remarkable change in the past decade and a half. The founding articles of the discipline – such classic pieces as Ronald Coase’s “The problem of social cost” (1960), Richard Posner’s “A theory of negligence” (1972) and Guido Calabresi and Douglas Malamed’s “Property rules, liability rules, and inalienability: One view of the cathedral” (1972) – offered economic analyses of (...) familiar aspects of the common law, seeking to explain, in particular, fundamental features of the law of tort in terms of such economic ideas as transaction costs (Coase), Kaldor-Hicks efficiency (Posner), or minimizing the sum of the accident costs and avoidance costs (Calabresi and Malamed). In each case, they argued that the law of torts should be understood as a set of liability rules selected for their incentive effects, rather than as a set of substantive rights and remedies for their violation. These authors claimed to be able to explain most of the features of tort law and, where features were found that did not fit with their preferred explanations, recommended modification. Although they disagreed on important questions,1 each of the pieces seems to work a manageable structure into what strikes first-year law students as an otherwise random morass of common-law judgments. Generations of legal academics were introduced to these works, and drawn into their way of looking at things. As a student studying first-year torts with Calabresi at Yale, I had the sense that I was in the presence of greatness. (shrink)

In this wide-ranging investigation of many prominent issues in contemporary legal, political, and moral philosophy, Matthew Kramer combines penetrating critiques with original theorizing as he examines the writings of numerous major theorists (including Ronald Dworkin, H. L. A. Hart, Alan Gewirth, David Lyons, Ronald Coase, John Finnis, Jules Coleman, Anthony Kronman, and Richard Posner). While Kramer argues with the rigor that is the hallmark of the tradition of analytic philosophy, his inquiries extend not only to that tradition (...) but also to such other traditions as Aristotelianism and Continental philosophy and Legal Realism. (shrink)

The theory of the firm did not exist, in any serious manner, until around 1970. Only then did the current theory of the firm literature begin to emerge, based largely upon the work of Ronald Coase and to a lesser degree Frank Knight. It was work by Armen Alchian, Robert Crawford, Harold Demsetz, Michael Jensen, Benjamin Klein, William Meckling and Oliver Williamson, among others, that drove the upswing in interest in the firm among mainstream economists. This accessible book (...) provides a valuable overview of the prehistory of the firm. Spanning an impressive timeline, it delves into Antiquity, the Medieval era, the pre-classical economics period and the 19th and 20th centuries. Next, the book traces the theoretical contributions from pre-classical, classical and neoclassical economics. It will be illuminating reading for students and researchers of the history of economic thought, industrial organization, microeconomic theory and business history. (shrink)

Adam Smith and Friedrich Hayek saw the liberty principle as focal and accorded it strong presumption, but their wisdom invokes how little we can know. In Knowledge and Coordination, Daniel Klein re-examines the elements of economic liberalism. He interprets Hayek's notion of spontaneous order from the aestheticized perspective of a Smithian spectator, real or imagined. Klein addresses issues economists have had surrounding the notion of coordination by distinguishing the concatenate coordination of Hayek, Ronald Coase, and Michael Polanyi from (...) the mutual coordination of Thomas Schelling and game theory. Clarifying the meaning of cooperation, he resolves debates over whether entrepreneurial innovation enhances or upsets coordination, and thus interprets entrepreneurship in terms of discovery or new knowledge. Beyond information, knowledge entails interpretation and judgment, emergent from tacit reaches of the "society of mind," itself embedded in actual society. Rejecting homo economicus in favor of the "deepself," Klein offers a distinctive formulation of knowledge economics, entailing asymmetric interpretation, judgment, entrepreneurship, error, and correction-and kinds of discovery-which all serve the cause of liberty. This richness of knowledge joins agent and analyst, and meaningful theory depends on tacit affinities between the two. Knowledge and Coordination highlights the recurring connections to underlying purposes and sensibilities, of analysts as well as agents. Behind economic talk of market communication and social error and correction lies Klein's Smithian allegory, with the allegorical spectator representing a conception of the social. Knowledge and Coordination instructs us to declare such allegory. Knowledge and Coordination is an authoritative take on how, by confessing the looseness of its judgments and the by-and-large status of its claims, laissez-faire liberalism makes its economic doctrines more robust and its presumption of liberty more viable. (shrink)

Abstract The classical case for market society appeals to the complementary goods of economic liberty and maximum wealth. A market society overgrown with economic firms, however, partly sacrifices liberty for the sake of wealth. This point was accepted by prewar, theorists of the economic firm, such as Frank Knight and Ronald Coase, and the attempt to moderate, or compensate for, the constriction of economic liberty was a central struggle of the Progressive Era. Since World War II, however, neoclassical (...) economists have tried to assimilate the firm to the theory of market exchange. Because they have failed, issues of authority and control have recently reassumed their place at the center of the theory of the firm. (shrink)

In the twentieth century, two Nobel-Prize winning economists wrote two seemingly unrelated characterizations of the processes constraining human behavior. One, Ronald Coase, wrote a short article entitled The Nature of the Firm,1 in which he reduced all managerial decision-making to a fundamental choice between making the factors of production, or buying them. This article and the idea of the "make or buy" decision for which it has come to be known, have proven to be among the most seminal (...) in the history of financial economics and organizational behavior. The second economist, Friedrich Hayek, wrote what he thought to be a comprehensive treatment of the approach that ought to be taken to the generation of rules constraining human interaction. This voluminous work, Law, Legislation and Liberty, characterized the creation of legal rules as the product of either spontaneous or planned orders. Hayek argued that spontaneous orders like "law" were more efficient mechanisms for governing human behavior than planned orders like "legislation." 2 This thesis received a lukewarm reception generally, and virtually no reception at all in legal circles. This Article demonstrates that Coase and Hayek were actually making the same observation, albeit in different contexts. Hayek's conception of the two sources of order is, in fact, a more abstract application of Coase's "make or buy" decision. Had Hayek understood his characterization of legal processes to be a variant of Coase's "Theory of the Firm," his ideas may have received more traction. Lawyers, judges, and lawmakers may also have understood some of the implications of Hayek's thesis for constraining legal actors, as well as its applications in current debates on the scope of administrative agency authority, tort reform, or the use of legislative history in litigation. (shrink)

Markets, just like states, are systems of governance. Their justification must therefore meet similar standards of moral scrutiny, despite the fact that their authority structure is impersonal. In order to argue for the role of markets as systems of governance that raise similar justificatory burdens, this book provides a philosophical account of market institutions. According to this view, shared social institutions define a framework for how members of a political community think and act toward one another, consistent with citizens respecting (...) themselves and one another as free persons, each entitled to guide their activities in light of their own judgments. The market is one of these shared institutions, so its rules must also be consistent with mutual respect as free persons. This perspective represents a fundamentally different way of thinking about economic life, which rejects both the view of economic actors as disconnected individuals in a state of nature and the view of economic actors as mere preference orderings that are inputs to a giant social welfare function. The book formulates a deeper framework for thinking about economic life, which can displace the familiar ideas that underpin contemporary neoliberalism and finance capitalism. In so doing, the book works out the implications of the idea that the burdens of equal citizenship extend to economic life, such that appropriately regulated markets and workplaces elicit and realize a system in which people respect one another as free. The book concludes with a defense of economic democracy, elements of which can be found under German codetermination. (shrink)

In the early 1970s, we and others in the economics profession became enamored with the notion of externalties—a cost or benefit imposed on or provided to others but not taken into account by the economic agents who generate the effect. We, and others, seemed to see external effects everywhere. There was polluted water and air, noise, urban blight, traffic congestion, and other features of modern life that seemed to call out for some form of corrective action. As the externalities revolution (...) unfolded, economists and other social scientists overlooked the importance of evolved legal and other institutions that formally and informally establish property and liability rules that cause decision makers to face the cost of their actions, including what otherwise could be external costs imposed on unwilling third parties. While markets seemed always to fail, political institutions were seen systematically as without blemish, or so it seemed. It was this two-pronged failure, 1) a failure to consider and state assumptions about background institutional arrangements and 2) a disregard for special interest politics, that became the Achilles Heel of the otherwise elegant externality arguments. Eventually, it was the modern institutionalists, scholars who focused on laws, regulation, and rules of the marketplace, who attempted to close the lid and drive the nails on the externality coffin. In this paper, we reach back to 1920 and trace the rise and decline of the policy importance of externalities theory. Beginning with A. C. Pigou and Alfred Marshall, our story includes some of the great figures in economic history of thought. But while theory was being built, institutions were overlooked. Pigou continues to be a dominant player in the story until the 1960s and 1970s when externalities theory was challenged by James M. Buchanan, Ronald Coase and other scholars. It is here in the twilight years of the externalities revolution that the prospects of government failure are raised as being more daunting than the likelihood of market failure. Finally, in the late 1970s and beyond, the externalities revolution is replaced by a property rights revolution. (shrink)

I argue that much current thinking on externalities—at least among “lay political economists” (but even, on occasion, among professional economists)—is saddled with two analytical errors. The first is what I call coextensivism: the conflation of public goods and externalities. The second error is what I call externality profligacy: the conflation of economic and “social” externalities. The principal dangers presented by these two “dogmas on externalities” are that, while in their grips, we are under-disposed to seek negotiated, market-based solutions (of a (...) broadly Coasean nature) to challenges posed by economic externalities, and over-disposed to seek coercive, state-based solutions (of a broadly Pigouvian nature) to challenges posed by social externalities. (shrink)

If market transactions are optimal, why do so many transactions occur within firms themselves? Ronald H. Coase explains this phenomenon by arguing that market transaction costs differ from intra-company transaction costs and that clear intra-intra-firm property rights have the effect of reducing transaction costs. But what exactly are the relevant transaction costs, and what factors determine them? Oliver Hart argues that market contracts are incomplete, and that the key to improving efficiency is putting the power to deal with (...) these unspecified circumstances into the hands of owners within the same entity.In this paper, I argued that, the development of the theory and practice of business ethics as well as China’s innovative practice in recent decades provide a new perspective, one that is especially relevant to the issues raised by Case and Hart and that bear directly on the reform of China’s state-owned enterprises. (shrink)

Review text: "Ronald W. Langacker is universally acclaimed as one of the founding fathers of the cognitive linguistics movement. His pioneering efforts towards developing a meaning-oriented, usage-based theory of grammar have given cognitive linguistics many of its key concepts, and his theory of Cognitive Grammar is not only one of the cornerstones of cognitive linguistics, it is also a magnificent achievement in its own right." Dirk Geeraerts, January 2009.

Until now it has been impossible to read the full story of the relationship between Albert Camus and Jean-Paul Sartre. Their dramatic rupture at the height of the Cold War, like that conflict itself, demanded those caught in its wake to take sides rather than to appreciate its tragic complexity. Now, using newly available sources, Ronald Aronson offers the first book-length account of the twentieth century's most famous friendship and its end. Albert Camus and Jean-Paul Sartre first met in (...) 1943, during the German occupation of France. The two became fast friends. Intellectual as well as political allies, they grew famous overnight after Paris was liberated. As playwrights, novelists, philosophers, journalists, and editors, the two seemed to be everywhere and in command of every medium in post-war France. East-West tensions would put a strain on their friendship, however, as they evolved in opposing directions and began to disagree over philosophy, the responsibilities of intellectuals, and what sorts of political changes were necessary or possible. As Camus, then Sartre adopted the mantle of public spokesperson for his side, a historic showdown seemed inevitable. Sartre embraced violence as a path to change and Camus sharply opposed it, leading to a bitter and very public falling out in 1952. They never spoke again, although they continued to disagree, in code, until Camus's death in 1960. In a remarkably nuanced and balanced account, Aronson chronicles this riveting story while demonstrating how Camus and Sartre developed first in connection with and then against each other, each keeping the other in his sights long after their break. Combining biography and intellectual history, philosophical and political passion, _Camus and Sartre_ will fascinate anyone interested in these great writers or the world-historical issues that tore them apart. (shrink)

Ronald S Laura, Michael Leahy; Religious Upbringing and Rational Autonomy, Journal of Philosophy of Education, Volume 23, Issue 2, 30 May 2006, Pages 253–265, h.

Critical discussion of Quine's concepts of purely referential occurrence/position. It is argued from the perspective of a Russellian view of truth that existential generalization and substitutivity of identity are non-equivalent tests for referential occurrence/position, and that the former rather than the latter is the appropriate test.

Critical discussion of Quine's concepts of purely referential occurrence/position. It is argued from the perspective of a Russellian view of truth that existential generalization and substitutivity of identity are non-equivalent tests for referential occurrence/position, and that the former rather than the latter is the appropriate test.

Jason A. Frank, Constituent Moments: Enacting the People in Postrevolutionary America, Duke University Press, ISBN - 9780822346630Vicki Hsueh, Hybrid Constitutions: Challenging Legacies of Law, Privilege and Culture in Colonial America, Duke University Press, ISBN - 9780822346180.

The election of Donald Trump has exposed American society’s profound crisis of hope. By 2016 a generation of shrinking employment, rising inequality, the attack on public education, and the shredding of the social safety net, had set the stage for stunning insurgencies at opposite ends of the political spectrum. Against this dire background, Ronald Aronson offers an answer. He argues for a unique conception of social hope, one with the power for understanding and acting upon the present situation. Hope, (...) he argues, is far more than a mood or feeling—it is the very basis of social will and political action. It is this kind of hope that Aronson sees brewing in the supporters of Bernie Sanders, who advocated the tough-minded and inspired disposition to act collectively to make the world more equal, more democratic, more peaceful, and more just. And it was directly contrasted by Trump’s supporters who showed a cynical and nostalgic faith in an authoritarian strongman replete with bigotry and misogyny. Beneath today’s crisis Aronson examines our heartbreaking story: a century of catastrophic violence and the bewildering ambiguity of progress—all of which have contributed to the evaporation of social hope. As he shows, we are now in a time when hope is increasingly privatized, when—despite all the ways we are connected to each other—we are desperately alone, struggling to weather the maelstrom around us, demoralized by the cynicism that permeates our culture and politics, and burdened with finding personal solutions to social problems. Yet, Aronson argues, even at a time when false hopes are rife, social hope still persists. Carefully exploring what we mean when we say we “hope” and teasing hope apart from its dangerously misconstrued sibling, “progress,” he locates seeds of real change. He argues that always underlying our experience—even if we completely ignore it—is the fact of our social belonging, and that this can be reactivated into a powerful collective force, an active we. He looks to various political movements, from the massive collective force of environmentalists to the movements around Sanders and Jeremy Corbyn, as powerful examples of socially energized, politically determined, and actionably engaged forms of hope. Even in this age of Donald Trump, the result is an illuminating and inspiring call that anyone can clearly hear: we can still create a better future for everyone, but only if we resist false hopes and act together. (shrink)

Richard Rorty is one of the most oft-cited yet least understood philosophers of the twentieth century. This book offers an overview and introduction to Rorty's ideas, key writings and contributions to the various fields of philosophy. Chronologically organized, the book traces the development of Rorty's thought and examines all the key topics, and controversies, central to his work. Ronald A. Kuipers introduces Rorty's complex thought through the exploration of three Rortyan personas: The Philosophical Therapist, The Liberal Ironist, and the (...) Anticlerical Prophet. This exploration of Rorty's multivalent yet deeply coherent intellectual identity is set against the background of Rorty's personal motivations for studying philosophy, and for pursuing the controversial questions he did. The book portrays how, in conversation with the traditions of American Pragmatism, Analytic Philosophy, and Continental Thought, Rorty weaves his own unique and original philosophy. Rorty's originality resides in his fresh approach to interrelated social and political problems, revealing a thinker who has important reasons for wading into controversial intellectual waters. This is the ideal companion to study of this hugely influential thinker. (shrink)

The esophageal obturator airway is a device used throughout the United States to facilitate artificial respiration of critically ill patients who are not hospitalized. Its use is restricted to persons who are over 15 years old because obturators for children are not available. A protocol submitted to an institutional review board intended to develop EOAs suitable for use in children. The investigators proposed to perform preliminary testing of these devices on children who had sustained irreversible loss of brain function. In (...) its review of this protocol, the IRB had to confront several vexing questions. (shrink)

In this landmark volume of contemporary communication theory, Ronald C. Arnett applies the metaphor of dialogic confession—which enables historical moments to be addressed from a confessed standpoint and through a communicative lens—to the works of German theologian Dietrich Bonhoeffer, who pointed to an era of postmodern difference with his notion of "a world come of age." Arnett’s interpretations of Bonhoeffer’s life and scholarship in contention with Nazi dominance offer implications for a dialogic confession that engages the complexity of postmodern (...) narrative contention. Rooted in classical theory, the field of communication ethics is abstract and arguably outmoded. In _Dialogic Confession: Bonhoeffer’s Rhetoric of Responsibility, _Arnett locates cross-cultural and comparative anchors that not only bring legitimacy and relevance to the field but also develop a conceptual framework that will advance and inspire future scholarship. (shrink)