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.
|Other Independent Review articles by Randall G. Holcombe
|Rethinking Economics as Social Theory
|Generation Gap: Why Baby Boomers Still Dominate American Politics and Culture
|Handbook of Alternative Theories of Political Economy
|[View All (23)]