Friday, September 13, 2013
Ronald Coase died this past Monday, and Stephen Bainbridge posted some related commentary here, as well as an excerpt of his review of Coase's book The Firm, the Market, and the Law (here). What follows are two of my favorite Coase quotes, taken from pages 3-4 of that book:
- The rational utility maximizer of economic theory bears no resemblance to the man on the Clapham bus or, indeed, to any man (or woman) on any bus. There is no reason to suppose that most human beings are engaged in maximizing anything unless it be unhappiness, and even this with incomplete success.
- In mainstream economic theory, the firm and the market are, for the most part, assumed to exist and are not themselves the subject of investigation. One result has been that the crucial role of the law in determining the activities carried out by the firm and in the market has been largely ignored.