Roads Not Taken: The Coase Conundrum

Ronald Coase was ‘at’, rather than ‘of’ Chicago. This statement goes a long way toward explaining how the methodological aim and approach of Ronald Coase differed sharply from that of Chicago. As he, himself, clearly claimed, he was a direct throwback to the Classical Liberalism that defined and formed the characteristic feature of the work of Frank Knight. By exploring and analyzing this distinctive difference, such questions as Coase’s response to the ‘Coase Theorem’ becomes clarified, as does the intent of much of his work. Though generally in line with such leading Chicagoans as George Stigler and Milton Friedman in terms of policy, Coase remained firmly at odds with these figures in his approach to economics and his rejection of what he termed ‘blackboard economics’.