UNDERMINING PROPERTY RIGHTS: COASE and BECKER Gary North*
Journal of Libertarian Studies Volume 16, no. 4 (Fall 2002), pp. 75-100 ©2002 Ludwig von Mises Institute www.mises.org UNDERMINING PROPERTY RIGHTS: COASE AND BECKER Gary North* "Coase, get your cattle off my land." -Walter Block In one sentence, Walter Block called into question Ron Cease's central conclusion in his now-famous theorem, namely, that the original distribution of ownership would not affect the allocation of scarce re- sources in a free market, if there were no transaction costs. COASE AND HIS THEOREM In 1937, a young Ron Coase published an important study of the firm,1 but for the next two decades, he published very little in profess- ional scholarly journals. Then, in 1960, like a bombshell, came his most famous work, "The Problem of Social Cost."3 In it, he laid out what has since become known as the Coase theorem. The theorem reaches its central conclusion by implicitly denying the economic efficiency of the judicial doctrine of strict liability. In order to deal with the real world, in which there is no such thing as a costless transaction, Coase proposed a solution: in judicial cases where Founder of the Institute for Christian Economics. 'Ronald H. Coase, "The Nature of the Firm," Economica 4 (1937), pp. 386-405. A bibliography of Coase's works appears in "On the Resignation of Ronald H. Coase," Journal of Law and Economics 26 (April 1983). See also The Ronald Coase Institute, www.Coase.org. The bulk of his academic articles came after 1960. 3Ronald H. Coase, "The Problem of Social Cost," Journal of Law and Econom- ics 3 (I960), pp.
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