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<center>''The Coase theorem is very powerful for debunking excuses, and for recognizing the enormous opportunities available to all regardless of wealth''.</center>

<center>''The Coase theorem debunks excuses, and proves the enormous opportunities available to all regardless of wealth''.</center>

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<ref>The most efficient allocation of resources is referred to by economists as "[[Pareto optimal]]."</ref> 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 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 said something similar.</ref> '''''no matter who or where you are'''''.

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 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 supports conservative interpretations of the [[Chicago School of Economics]].  

== Future v. Past ==

== Future v. Past ==

The Coase theorem proves that the future governs the present, and the past has little or no significance.  The assignment of rights or wealth, which is in the past, is virtually irrelevant to the productivity of activity today, which is dictated by future transactions.  In this sense the Coase theorem confirms a key aspect of Christianity, a religion focused on the future far more than the past.

The Coase theorem proves that the future governs the present, and the past has little or no significance.  The assignment of rights or wealth, which is in the past, is virtually irrelevant to the productivity of activity today, which is dictated by future transactions.  In this sense the Coase theorem confirms a key aspect of [[Christianity]], a religion focused on the future far more than the past.

== Forgiveness ==

== Forgiveness ==

==Court decisions==

==Court decisions==

To summarize Ronald Coase's paper ''The Problem of Social Cost'', which can be read [http://www.sfu.ca/~allen/CoaseJLE1960.pdf on line], a judge should have regard for the total effect of his or her decisions including economic effect. For example, the paper says, making a polluting factory get a better smokestack might be a better decision than making the factory owner pay a fine. How might the problem be solved if money did not exist? Another example implied that making a farmer put a fence around his crops might make more sense than making the owner of the cattle which walked on the crops pay a fine. He mentioned a case of sparks from a steam engine causing a brush fire, and that it may not have been fair to make the railroad pay damages depending on the circumstances and technology. His paper also said there was a case in which a wealthy man stocked rabbits on his land and had to pay damages to his neighbor because the rabbits got into the neighbor's garden. Mr. Coase believed the decision may or may not have solved the problem morally, depending on the circumstances. His paper analyzes ways in which paying damages or not to the plaintiff might effect the causes of disputes.  His famous paper turns out to have very little to do with the theorem carrying his name.<ref>Coase, R. October 1960 ''[http://www.sfu.ca/~allen/CoaseJLE1960.pdf The Problem of Social Cost.]'' Journal of Law and Economics</ref>

To summarize Ronald Coase's paper ''The Problem of Social Cost'', which can be read [http://www.sfu.ca/~allen/CoaseJLE1960.pdf on line], a judge should have regard for the total effect of his or her decisions including economic effect. For example, the paper says, making a polluting factory get a better smokestack might be a better decision than making the factory owner pay a fine. How might the problem be solved if money did not exist? Another example implied that making a farmer put a fence around his crops might make more sense than making the owner of the cattle which walked on the crops pay a fine. He mentioned a case of sparks from a steam engine causing a brush fire, and that it may not have been fair to make the railroad pay damages depending on the circumstances and technology. His paper also said there was a case in which a wealthy man stocked rabbits on his land and had to pay damages to his neighbor because the rabbits got into the neighbor's garden. Mr. Coase believed the decision may or may not have solved the problem morally, depending on the circumstances. His paper analyzes ways in which paying damages or not to the plaintiff might effect the causes of disputes.  His famous paper turns out to have very little to do with the theorem carrying his name.<ref>Coase, R. October 1960 ''[http://www.sfu.ca/~allen/CoaseJLE1960.pdf The Problem of Social Cost.]'' Journal of Law and Economics</ref>

== References ==

== References ==