The Man Who Resisted ‘Blackboard Economics’
Nobel laureate Ronald Coase taught that economists should study real markets. by David Henderson in The Wall Street Journal

As editor of the Journal of Law and Economics from 1964 to 1982, Coase published articles that were critical of government regulation. Not, Coase emphasized, because regulation could not work but because, in virtually all the cases examined in that journal, regulation did not work. Regulation led either to cartels or to other negative effects.

Coase made many intellectuals uncomfortable by pointing out an obvious implication of their belief in government regulation: If regulation works so well in the market for goods, then it should work even better in the market for ideas.

Why? As Coase said in a 1997 Reason interview, “It’s easier for people to discover that they have a bad can of peaches than it is for them to discover that they have a bad idea.” Many intellectuals thought Coase was arguing for government regulation of ideas. He wasn’t. His point was to get intellectuals to see that their case for regulating goods is weak.


An interesting idea coming from a socialist.