About Ronald Coase

Ronald Coase’s scholarship has shaped our understanding of property rights, regulation, antitrust, corporate governance, and the nature of firms. The son of a telegraph operator, Professor Coase was born in a London suburb in 1910 and earned an economics degree from the London School of Economics. Early in his academic career, Professor Coase investigated the role of firms by touring industrial sites throughout England. Professor Coase’s factory visits reflected his strong belief in empiricism, a belief manifest in all of his academic work.

In 1937, Professor Coase published his seminal article, The Nature of the Firm. He posited that transaction costs define the boundaries of the firm. In a later landmark article, The Problem of Social Cost, published in 1960, Professor Coase demonstrated that, absent transaction costs, parties can bargain with one another to produce optimal economic outcomes, regardless of the initial allocation of property rights. Professor Coase used this key insight to propose the full delineation of property rights as a solution to the problem of externalities, or transactions in which an economic actor does not bear the full costs or benefits of its actions.

After immigrating to the United States in 1951, Professor Coase taught at the University of Buffalo and at the University of Virginia. In 1964, he accepted a professorship at the University of Chicago Law School, where he remained until his retirement in 1982. During his time at the University of Chicago, Professor Coase also served as editor of the Journal of Law & Economics. He won the Nobel Memorial Prize in Economics in 1991.

Professor Coase’s scholarship has set the foundation for modern developments in industrial organization, antitrust, corporate law, environmental law, tort law, contract law, and other areas in law and economics. His work has informed regulatory approaches throughout the world. His academic career provides testament to the power of the ideas that can result from empiricism.