Coase, Consistency and Coffee

There's few greater pleasures on a rainy day than to make a nice mug of coffee and settle down with a Ronald Coase article. He is a late English essayist (so his writing is enjoyable to read), and an early Chicago economist (so his insights are deep and enlightening).

The source of his wisdom is his combination of humility and contrariness - he crusades for logically consistent theory
but in an open, humble manner. In "The Market for Goods and the Market for Ideas" he builds upon Aaron Directors opinion that the attachment to free speech is "the only area where laissez-faire is still respectable", utilising his extensive knowledge of the communications industry.

I'll quote two paragraphs that I hope will encourage you to read the article for yourself (email me if you struggle to get hold of it): the first demonstrating his humility; the second his contrariness.

It would be idle of me to pretend that I could act as a guide to [John] Milton's thought. I know too little of seventeenth century England and there is much in Milton's pamphlet the meaning of which I cannot discern. Yet, there are passages which leap across the centuries and for whose interpretation no scholarship is needed
...
We have to decide whether the government is as incompetent as is generally assumed in the market for ideas, in which case we would want to decrease government intervention in the market for goods, or whether it is as efficient as it is generally assumed to be in the market for goods, in which case we would want to increase government regulation in the market for ideas. Of course, one could adopt an intermediate position - a government neither as incompetent and base as assumed in the one market nor as efficient and virtuous as assumed in the other. In this case, we ought to reduce the amount of government regulation in the market for goods and might want to increase government regulation in the market for ideas. I look forward to learning which of these alternative views will be espoused by my colleagues in the economics profession.

So in case his temperance masks his meaning, let me restate his challenge:

Advocation of free speech is intellectually incompatable with government intervention in the goods market

Comments

[Jack]

What is this "government" stuff and in what is it supposed to be either competent or not and where is this goods market? That is, is all government the same? Is a government either competent and allowed to do everything or incompetent and allowed to do nothing? Are markets for, say, water and, say, tennis balls, the same as far as government intervention goes?

What do you do with a market rejection of laissez-faire?

[Juicy Couture]

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