The Nobel Memorial Prize in Economic Science is not awarded posthumously. So I was relieved when my longtime intellectual hero, Ronald H. Coase, won it in 1991, just a few months before his 81st birthday.
Because he had been widely regarded as one of the world’s most influential economists for several decades, I thought that the Nobel selection committee had acted recklessly in waiting so long to honor him. I needn’t have worried. Mr. Coase, who died this month at 102, would have had many more opportunities.
Born and educated in England, he began adulthood as a socialist. But he spent most of his career at the University of Chicago, where he was revered by its many free-market enthusiasts as the world’s foremost authority on behavior with harmful side effects, or negative externalities, as economists call them. He became their champion because they thought his framework provided the most cogent arguments for limiting government’s role in economic life.
That belief was profoundly mistaken. In time, I predict, Mr. Coase’s framework will instead be seen as providing not only the best explanation for why governments regulate in the various ways they do, but also the best advice on how they might regulate more effectively.
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