According to the Coase theorem, in the absence of transaction costs, people who value resources the most will engage in mutually advantageous exchange to maximize the value of resources under their control. First published in 1960 to shed light on markets and property rights, Professor Ronald Coases famous insight also helps explain how political elites can impose costs on others, and thus provides an economic foundation for a theory that social scientists developed more than a century ago.
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|Other Independent Review articles by Randall G. Holcombe|
|Fall 2018||Gordon Tullock on Inequality and Redistribution|
|Summer 2018||Rules for Preventing Conflicts between Drones and Other Aircraft|
|Winter 2014||Consenting to Collective Action|
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