As co-blogger Jonathan Adler notes, Nobel Prize-winning economist and legendary law and economics scholar Ronald Coase passed away today at the age of 102. Coase was the author of such foundational articles as “The Problem of Social Cost,” and “The Nature of the Firm.” His contributions to scholarship are so massive that it is hard to overstate their impact. Many of his most important articles are collected in this book.
One of my personal favorite Coase articles is “The Lighthouse in Economics,” where Coase shows that private entrepreneurs successfully established and operated an enterprise that most economists believed was the classic example of a public good that could only be provided by government. This doesn’t prove that the private sector can provide all public goods (nor did Coase claim that it can); but it does show that we should be more careful than we usually are in asserting that a given good can only be provided by the state just because it is public in nature. Before Coase, most scholars and public policy experts had simply assumed that the private sector was incapable of providing lighthouses without much investigation of the issue.
My condolences to Coase’s family and colleagues. He will be greatly missed. [...]