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Old September 16th, 2013 #1
Leonard Rouse
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Default UVA expat: How Nobel winner Coase got pushed from Charlottesville


[University of Chicago Law School]
Coase brought non-stop acclaim to the University of Chicago following his unceremonious departure from UVA.

UVA expat: How Nobel winner Coase got pushed from Charlottesville

By Hawes Spencer
Published online 7:00am Wednesday Sep 4th, 2013
and in print issue #1236 dated Thursday Sep 5th, 2013

Credited with launching the field of Law and Economics, Ronald H. Coase was one of the world's most acclaimed living economists. That is until Monday, September 2, when he died at the age of 102.

"If there's such a thing as the founding fathers of Law and Economics, he is up there," says University of Virginia law professor George Cohen. "He got the whole enterprise started."

For the past five decades, Coase's ideas have brought accolades to the University of Chicago, acclaim that, ironically, could have gone to UVA, where Coase was teaching when he published his most famous treatise— except that UVA let him leave due to what appears to have been a misunderstanding. [Laughably false on multiple counts, and the author himself debunks his own rationalization at length, later in the article. Read on.]

His seminal paper, "The Problem of Social Cost," was published in 1960 when the British-born Coase was living in Charlottesville and teaching economics at what UVA then called its Thomas Jefferson Center for Studies in Political Economy.

"He introduced this whole notion," says Cohen, "that people through private negotiation can reach an efficient solution."

What Coase and his colleagues were challenging, Cohen says, was the widespread belief that the only way to protect scarce resources— such as air, water, or habitat— was via taxation. Unfortunately, as Coase and Center co-founder James M. Buchanan would learn, using markets to achieve efficient and beneficent goals would run afoul of the university administration intent on a more "modern" outlook.

In 1994, Coase told this reporter how one of his UVA colleagues accidentally received a copy of a secret dossier compiled by then Dean of the Faculty Robert Harris in which Harris outlined a plan to change the economics faculty. Under then President Edgar Shannon, Harris allegedly used non-promotion and non-offer-matching to force Jefferson Center scholars to disperse. Coase left UVA for Chicago in 1964; Buchanan departed four years later.

"I think [the report] was very damning because it makes quite clear what their attitude was and there was actually a policy to get rid of us," Coase said. "My wife once heard someone at a cocktail party describe me as someone to the right of the John Birch society. It wasn't true. You know, I'm English and have a completely different history from most of the other people and am not really much involved at all in American politics."

Buchanan and Coase got the last laugh, as each would win the Nobel Prize for Economics, Buchanan in 1986 and Coase in 1991.

"The secret report became known in a very peculiar way," Coase told me. "What happened was that Warren Nutter, who was chairman of the department, asked for some file, and when he got it, there it was.

"The University of Virginia was not interested in retaining me," continued Coase. "It was a political thing. They had decided that my views, which they never understood— they never tried to ascertain my views actually."
While that controversy raged long before Cohen began teaching, the novel theories that Coase left behind are still taught at UVA and across the world.


"His ideas have had remarkable influence and changed the way people thought about a lot of issues," says Cohen. "He was a tremendous figure."

http://www.readthehook.com/110081/uv...harlottesville

=========================

[Bob Whitaker has talked about this purge of conservatives for years, having witnessed it first-hand at UVA.]
 
Old September 16th, 2013 #2
Leonard Rouse
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See also: http://reason.com/blog/2013/09/04/ec...-chased-out-of .



Economist Ronald Coase Was Chased Out of UVA in 1964 for Supporting Market Solutions.
 
Old September 30th, 2013 #3
Melvina Gordon
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Outstanding post! I loved both those links. Even the comments taught me things I didn't know, like this one from readthehook:
"Do not forget the most famous professor run out of UVA: William Barton Rogers, who left Charlottesville, dismayed by the intellectual climate at UVA, to found a little school called the Massachusetts Institute of Technology."
So the purge of conservatives started earlier than I thought, and in such a traditional state as Virginia too, which rather takes the whole story into the bizarre.
Thanks for this edifying and thoroughly enjoyable read.
 
Old September 30th, 2013 #4
Gordon Green
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Huh. The North proves to be more liberal for a conservative than a famous Southern university.
 
Old September 30th, 2013 #5
Leonard Rouse
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Quote:
Originally Posted by Gordon Green View Post
Huh. The North proves to be more liberal for a conservative than a famous Southern university.
UVA is run by a bunch of craven Southern sellouts, which isn't redundant though you have to squint to tell. They brown nose the Ivy League, who are a bunch of judeo-commies, and D.C. bureaucracy. These want straight state dictation of economic affairs. For UVA, Coase was the un-cool friend that keeps you from getting invited to the cool kids' parties. You can see why a Kennedy would be at home in Charlottesville, which has turned into a mini-police state.

UChicago supports the Rockefeller corporatist branch of international finance. They want big government, too, but that bunch doesn't want too much state intervention--just enough to keep their cartels in power. Coase's research was (and is) supportive of schemes like cap 'n trade and carbon credits, which put an economic veneer on what is still a giant commie scam, the 'environmental movement.' As implemented by the Rockefeller crowd, it would allow for huge barriers to entry in industry and a huge new international financial market to control and manipulate. And of course, it would still rely on government intervention to provide the set-up.

I'm not saying that was Coase's agenda, but you can see why Coase would be welcome at Chicago.
 
Old September 30th, 2013 #6
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Ronald Coase obituary

Nobel prizewinning economist behind the principle of carbon credit trading

Mark Littlewood
The Guardian, Wednesday 4 September 2013 12.52 EDT


Ronald Coase at the University of Chicago, which he joined in 1964. Photograph: AP

Ronald Coase, who has died aged 102, won the Nobel prize for economic sciences in 1991 for his work in discovering and clarifying the importance of transaction costs in the functioning of the economy. His substantial contribution to economics spanned eight decades. Coase challenged the idea that "externality problems" in which the costs of an action are felt by those who are not party to it necessitated government intervention in the form of taxes or regulation.

Well-defined property rights and low transaction costs could allow individuals to resolve problems themselves through voluntary exchange in a free market. If you do not like the fact that your neighbour plays his music too loudly, or allows his dogs to roam around your garden, perhaps you should pay him to stop. Or, if your neighbour strongly desires to continue to act in this way, perhaps he should pay you to allow him to do so. State intervention to solve these disputes in the form of taxes, regulations and prohibitions should not be wholly ruled out, but neither should they be considered the constant default option.

Coase was born in Willesden, northwest London. His father worked for the post office, as had his mother before their marriage. After attending Kilburn grammar school on a scholarship, he studied at the London School of Economics, receiving a bachelor of commerce degree and joining its staff in 1935. In 1937, he married Marion Hartung, from Chicago.

In the same year, Coase published his influential essay The Nature of the Firm. Coase understood that the institutional and legal framework of a society was vital to appreciating how economic activity would be conducted. In the entirely theoretical world of a perfectly functioning market, with no transaction costs and everyone in possession of correct information, we would all be self-employed and continually entering into new contracts with one another, seeing our salaries fall and rise with every passing minute depending on our productivity.

In the real world, of course, companies face the prohibitive costs of continually working out with whom to do business and which goods and services they need to obtain (transaction costs). Coase posited the theory that the amount businesses could grow by depended on how they coped with internalising these costs and how they minimised entrepreneurial errors. He correctly predicted that tech nological developments, including cheaper, faster transport and more cost-effective communication, would lead to companies expanding in size.

After moving to the US in 1951, Coase worked at the University of Buffalo and the University of Virginia. In 1964 he took a position at the University of Chicago, where he became editor of the Journal of Law and Economics. It was in this publication in 1960 that Coase published his most famous piece of work, The Problem of Social Cost, which gave rise to the "Coase theorem", as his friend and colleague George Stigler dubbed it. He used the example of two farmers facing a situation in which one man's cattle strays on to his neighbour's field of crops. If the cost of restraining the cattle, ie the rancher paying to erect a fence, is less than the cost of the damage to the crops, this will be achieved irrespective of whether this is paid for by the arable farmer or the cattle rancher. Who picks up the bill will simply be determined by the allocation of property rights. The Coase theorem had practical applicability in the debate about the rights over the radio spectrum in 1960s America.

His work in this area continues to have relevance today. In the debate over climate change, Coase's work provides the intellectual basis for favouring a trading scheme of carbon credits, rather than the state imposition of anti-emissions regulations. Similarly, his work informs the approach to auctioning the airwaves for mobile telecommunications just as it did for radio half a century ago.

Throughout his career, Coase believed that economists were too prone to theorising about what might occur in an abstract and imaginary world. Indeed, he worried about the practical application of the Coase theorem itself. He is rightly considered to be the father of institutional economics, and the academic field of "law and economics" would not exist without him.

In the last years of his life, Coase turned his attention to the emergence of capitalism in China. His final great work in 2012, co-authored with Ning Wang, was How China Became Capitalist. Asked by a friend and colleague whether he thought the Chinese would be particularly receptive to his economic ideas, Coase quipped: "Not necessarily, but there are a lot of them."

Coase and Wang argued that China's move towards capitalism had essentially been an accidental byproduct of an attempt to bring about perfect socialism and sounded a warning that a continuing desire for economic and political control on the part of the Chinese authorities could derail the country's long-term potential for growth.

Considered by his friends to be a generous and modest man despite his enormous academic achievements, Coase conceded that he had originally expected it to take a century or more for China to become capitalist. Asked why an economic legend such as himself could be so wrong about a matter of such global significance, Coase replied: "I've been wrong so often, I don't find it extraordinary at all."

He will, however, be remembered across a wide range of academic disciplines as a brilliantly insightful man who managed to get so many things right and who could explain real world economic behaviour with incision and clarity.

Marion died in 2012.

Ronald Harry Coase, economist, born 29 December 1910; died 2 September 2013

http://www.theguardian.com/education...4/ronald-coase
 
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