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This simple theorem, first announced in a 1960 paper <ref>Ronald H. Coase, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)</ref> by [[Ronald Coase]] that won the Nobel Prize for Economics in 1991, has powerful implications for economics, law and even philosophy. It is a conservative theorem and thus most schools and professors downplay or distort it. Coase himself was vilified for years by liberals for it.
This simple theorem, first announced in a 1960 paper <ref>Ronald H. Coase, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)</ref> by [[Ronald Coase]] that won the Nobel Prize for Economics in 1991, has powerful implications for economics, law and even philosophy. It is a conservative theorem and thus most schools and professors downplay or distort it. Coase himself was vilified for years by liberals for it.
The implications in law are that the best a judge for the economy is to minimize transaction costs, such as bureaucracy. Court decisions that impose additional procedural obligations, such as ''Goldberg v. Kelly'' (1969), can only detract from overall wealth and efficient economic behavior. The Coase theorem implicitly holds that much of the legal attempts to improve the economy are illusory, because there is no way to improve over the combination of clear legal entitlements and no government interference.
The implications in law are that the best a judge can do for the economy is to minimize transaction costs, such as bureaucracy. Court decisions that impose additional procedural obligations, such as ''Goldberg v. Kelly'' (1969), can only detract from overall wealth and efficient economic behavior. The Coase theorem implicitly holds that much of the legal attempts to improve the economy are illusory, because there is no way to improve over the combination of clear legal entitlements and no government interference.
The implications in economics are that governments must intervene to lower transaction costs where feasible.
The implications in economics are that governments must intervene to lower transaction costs where feasible.