Coase China Society Interviews Ronald Coase

Interview with Professor Ronald Coase

The following interview was conducted by Wang Ning on December 28 and 29, 2010 at Chicago. On December 29, the Unirule Institute of China organized a conference in Beijing, "Coase and China", to celebrate the 100th birthday of Professor Ronald Coase, who won the Nobel Prize in Economics in 1991 for "his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy".

Professor Coase was born in London in 1910, educated and, later taught, at the London School of Economics before migrating to the United States in 1950. While in the United States, he taught at University of Buffalo and University of Virginia before moving to the University of Chicago to take on the editorship of the Journal of Law and Economics. Professor Coase retired from the University of Chicago Law School in 1982.

Professor Coase has long been interested in China ever since he read Marco Polo as a schoolboy. In the early 1980s, Professor Coase urged Steven N.S. Cheung to go to University of Hong Kong, which he thought was the best place to study China's newly launched economic reform. In 1993, Professor Coase invited Sheng Hong as a visiting scholar to the University of Chicago Law School. More recently, Professor Coase organized and, through the Coase Foundation, funded the 2008 Chicago Conference on China's Market Transformation and the 2010 Chicago Workshop on the Industrial Structure of Production. The 2008 Conference brought together scholars (from China and North America, including economists, sociologists, political scientists, economic historians, and legal scholars), Chinese government officials, and entrepreneurs to investigate China's transition to a market economy with Chinese characteristics. The 2010 Workshop explored the study of the industrial structure of production in China. How China Became Capitalist, a book co-authored with Ning Wang, will be jointly published by Palgrave /Macmillan and the Institute of Economic Affairs in 2011.

The newly established Coase China Society aims to promote the development of Coasean economics in China, which Professor Coase prefers to call the "right economics". According to Professor Coase, the right economics should study the working of the real world economy. If economics is properly conducted, Professor Coase believes, it shall be able to tell how the economic system works and how to improve it if something goes wrong. In Coase's view, economics has much to learn from modern biological and medical sciences which study how human body works from the cell level up to the organism level, how different organs function in a coordinated manner, and what can be done if something needs a fix.

In the following interview, Professor Coase explains the mission of the Coase China Society and his vision of economics and the part to be played by Chinese economists.

WN (Wang Ning): First of all, happy birthday, professor Coase. As you know, Chinese economists are now holding a Conference in Beijing, "Coase and China", to celebrate your 100th birthday. To my knowledge, no other western economist, probably with the exception of Karl Marx, has ever been so honored in China. The reason is twofold. It first has to do with the powerful influence of your ideas. Second, you clearly have a special feeling toward China. In Chinese culture, reciprocity is a high virtue. The first question many Chinese people have in mind is, what got you interested in China?

RC (Ronald Coase): I don't know why I am interested in China. I have been interested for a long time, too long for me to remember. I read Marco Polo many years ago, probably as a schoolboy. It was an impressive book. I don't think anyone can read the book without being impressed by the Chinese civilization. It went back many centuries. It made great achievements long before the rise of the West. That impression stayed with me forever.

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