Table of Contents

The Elgar Companion to Ronald H. Coase

The Elgar Companion to Ronald H. Coase

Edited by Claude Ménard and Elodie Bertrand

Ronald H. Coase was one of the most innovative and provocative economists of the twentieth century. Besides his best known papers on ‘The Nature of the Firm’ and ‘The Problem of Social Cost’, he had a major role in the development of the field of law and economics, and made numerous influential contributions to topics including public utilities, regulation and the functioning of markets. In this comprehensive Companion, 31 leading economists, social scientists and legal scholars assess the impact of his work with particular reference to the research programs initiated, the influence on policymakers, and the challenge to conventional perspectives.

Chapter 1: Ronald Coase: the makings of an iconoclast

Mary M. Shirley

Subjects: economics and finance, history of economic thought, industrial organisation, institutional economics, law and economics, law - academic, law and economics


Ronald Coase was an intellectual rebel – a courteous, generous, and witty scholar, but a rebel nonetheless. From his twenties until his death at 102, he sought answers to questions that most economists ignored. Why are there firms? What would really happen if we set prices equal to marginal cost? If the lighthouse is the iconic public good, have there ever been private lighthouses? What happens when one economic activity imposes costs on other economic actors – and what are the consequences of the ways we try to “fix” this problem? These questions distinguished Coase from mainstream economists, but so too did his answers and his way of finding answers through painstaking scrutiny of evidence. Born in London in December 1910, Coase had a weakness in his legs that forced him to spend his early years at a school for physical defectives, where they taught him basket weaving (Coase 1995). This unlikely beginning did not stop him from entering the Kilburn Grammar School at 12, and after graduation, the London School of Economics. Coase pursued a bachelor of commerce degree at LSE, which at that time focused on practical problems of business, much like today’s MBA. This early training inculcated Coase’s concentration on real world problems, an orientation that proved to be at odds with the dominant trends in economics.