| | The '''Coase theorem''' states that if property rights are well-defined and [[transaction costs]] (including costs of negotiating) are zero or negligible, then the most efficient economic activity will occur regardless of who initially owns the property rights. Negotiation and market transactions will ensure optimal allocation of property. Simply put, '''''it means "build a better mousetrap, and the world will beat a path to your door,"'''''<ref>The phrase is attributed to [[Ralph Waldo Emerson]], who [https://www.americanheritage.com/better-mousetrap said something similar].</ref> '''''no matter who or where you are'''''. | | The '''Coase theorem''' states that if property rights are well-defined and [[transaction costs]] (including costs of negotiating) are zero or negligible, then the most efficient economic activity will occur regardless of who initially owns the property rights. Negotiation and market transactions will ensure optimal allocation of property. Simply put, '''''it means "build a better mousetrap, and the world will beat a path to your door,"'''''<ref>The phrase is attributed to [[Ralph Waldo Emerson]], who [https://www.americanheritage.com/better-mousetrap said something similar].</ref> '''''no matter who or where you are'''''. |
| − | The Coase theorem divides the future from the past, and gives primacy to the future. Past and present entitlements are nearly irrelevant to future activity. This confirms the admonition of [[Gospel of Luke (Translated)#9:62|Luke 9:62]] not to look back at the past. If a parcel of property is best used as a restaurant, a park, a library, or a school, it will eventually find that use no matter who owns it or what its prior uses were. The Coase theorem states that the property will adopt its most productive use immediately, in the absence of transaction costs. | + | The Coase theorem divides the future from the past, and gives primacy to the future. Past and present entitlements are nearly irrelevant to future activity. This confirms the admonition of [[Luke 9-16 (Translated)#9:62|Luke 9:62]] not to look back at the past. If a parcel of property is best used as a restaurant, a park, a library, or a school, it will eventually find that use no matter who owns it or what its prior uses were. The Coase theorem states that the property will adopt its most productive use immediately, in the absence of transaction costs. |
| | This simple theorem, first published in a 1960 paper<ref>Ronald H. Coase, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)</ref> by [[Ronald Coase]] who won the Nobel Prize for Economics for this in 1991, has powerful implications for economics, law, politics, and even [[Christianity]]. This theorem reinforces teachings of [[Jesus]], such as the parable of the sprouting seed,<ref>[[Mark 1-8 (Translated)#4:26|Mark 4:26-29]].</ref> and supports [[conservative]] interpretations of the [[Chicago School of Economics]]. | | This simple theorem, first published in a 1960 paper<ref>Ronald H. Coase, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)</ref> by [[Ronald Coase]] who won the Nobel Prize for Economics for this in 1991, has powerful implications for economics, law, politics, and even [[Christianity]]. This theorem reinforces teachings of [[Jesus]], such as the parable of the sprouting seed,<ref>[[Mark 1-8 (Translated)#4:26|Mark 4:26-29]].</ref> and supports [[conservative]] interpretations of the [[Chicago School of Economics]]. |