Ronald Coase, Professional Odd Man Out

Ronald Coase (1910-2013) died yesterday at the age of 102. Since Coase became an economist, in the early 1930s, the economics profession has been altered enormously in fundamental ways. Most notably, perhaps, (1) the degree of analytical formality (especially the mathematical specification of theoretical models) has increased greatly in every part of the field; (2) Keynesian and other types of macro theories have become central parts of economic theory; (3) econometric testing has become an integral part of the profession’s evaluation of its theoretical models; and (4) interest in and writing about economic history and the profession’s greatest contributors in previous eras have waned greatly.

Coase, however, stood completely apart from these developments. Moreover, whereas the typical big-league academic economist cranks out many journal articles each year (and occasionally a book), Coase wrote very little. His stature as an economist rests overwhelmingly on two articles: “The Nature of the Firm” (1937) and “The Problem of Social Cost” (1960). Yet Coase is widely acknowledged to have been one of the twentieth century’s most influential economists. He obviously believed that thinking carefully about important issues was more important than frittering away his efforts in producing a stream of formal pyrotechics with very short half-life.

Too bad so few academic economists followed his example in these regards. (But, then, if they had, they probably would not have received tenure at their universities.)