Ronald Coase, the eminent British economist and University of Chicago professor emeritus, passed away on September 2 at the age of 102. Professor Coase was one of the best known economists of the past 80 years. He lived a long and extraordinarily productive life until the very end. He is best known for two articles, The Nature of the Firm published in 1937, and The Problem of Social Cost published in 1960. These along with many other achievements earned him the 1991 Nobel Prize in economics.
A recent Economist article, One of the Giants, summed up Professor Coase life’s work in his own words: “I have made no innovations in high theory. . . My contribution to economics has been to urge the inclusion…of features of the economic system so obvious that…they have tended to be overlooked.” “Attention to the overlooked helped Mr Coase transform both law and economics,” the article added.
A second article in the same September, 2013 Economist issue, The man who showed why firms exist, said:
“The job of clever people is to ask difficult questions. The job of very clever people is to ask deceptively simple ones. Eighty years ago a young British economist wondered: why do companies exist? The answer that he gave remains as fascinating today as it was back then. . . Most economists had been content to treat firms as black boxes. Mr Coase wondered what the black boxes were doing there in the first place. He used a scholarship that he won as an undergraduate to visit leading American firms such as Ford and General Motors. He summed up his thinking in his 1937 essay, The Nature of the Firm, which at first attracted no attention whatsoever, but continues to be cited to this day.”