At 101 years old, renowned University of Chicago Law School economist Ronald H. Coase has never stopped generating new ideas or giving his witty, confident take on past intellectual skirmishes.
His latest ideas are in a new book that Coase cowrote with Ning Wang, PhD ’02, titled How China Became Capitalist. It is a fresh example of the intellectual approach that Coase first brought to the University as a visiting scholar more than half a century ago.
On that evening in 1960, Coase persuaded a room full of skeptical Chicago economists—including future Nobel laureates Milton Friedman and George Stigler—to take his point of view on an important question of law and economics. In the process of winning them over, Coase honed an economic theory that would later win him a Nobel Prize in 1991.
“They were very impressed that I had changed their views, but I wasn’t particularly impressed because all I was doing was stating the obvious,” recalls Coase, who joined the University of Chicago Law School faculty in 1964. He is now the Clifton R. Musser Professor Emeritus of Economics.
Celebrated for his groundbreaking work on the economics of the firm and in the area of law and economics—a field born at the University of Chicago Law School—Coase has turned his academic acumen to China, a country that fascinated him since he read about Marco Polo as a boy. His writing is finding eager audiences there, an indication of the far-reaching impact of Coase’s work.
“Anyone would be hard-pressed to find another economist that has shaped the direction of the field of law and economics as much as Professor Coase,” says Wang, an assistant professor at Arizona State University’s School of Politics and Global Studies. “In China, Coase has profoundly influenced the way its market economy has evolved, particularly his emphasis on the delineation of property rights as the precondition for market transaction. He is probably the most well-known Western economist there.”
How China Became Capitalist traces the market transformation China has experienced over the past 35 years. The book argues that the changes came not from deliberate actions taken by Chinese leadership, as often claimed by Beijing, but from “marginal revolutions.”
“China became capitalist while it was trying to modernize socialism,” write Coase and Wang. “The story of China is the quintessence of what Adam Ferguson called ‘the products of human action but not human design.’ A Chinese proverb puts it more poetically: ‘The flowers planted on purpose do not blossom; the willows no one cared for have grown into big shade trees.’”
Coase says his main scholarly talent has been to identify solutions that were in plain sight. “I’ve never done anything that wasn’t obvious, and I didn’t know why other people didn’t do it,” he says. “I’ve never thought the things I did were so extraordinary.”