Ronald Coase and the Misuse of Economics

This is a story about the history of economics, mischief-making, and, ultimately, political power. It concerns the economist Ronald Coase, who died on Monday at the grand old age of a hundred and two.

During his lifetime, Coase, who was born in London’s Willesden neighborhood and educated in England before moving to America in 1951, was transformed into an icon of the political right. His famous “Coase theorem” was used to justify a hands-off approach to big business on the part of politicians, regulatory agencies, and judges, leaving pollution and other economic problems to the corrective powers of the free market. During the nineteen-seventies and nineteen-eighties, when the Chicago School of economics was sweeping everything before it in Washington and in the nation’s courts, Coase’s work proved immensely influential. In 1991, the Swedes awarded him a Nobel Prize in Economics, just one of many honors he received.

...read more