Ronald Coase won the Nobel prize in the early 1990s. Unlike many of the
other winners, he didn't get it as a "lifetime achievement" award. Rather,
won it for his ideas found in basically one paper: The
Problem of Social Cost. For a long time this was the most cited
paper in law and economics. Ironically, it is
still one of the least understood, no doubt because most people can't get
past the first 10 pages. (To find out more on this, read some of my
papers on transaction costs and property rights, or look at my textbooks).
I became fascinated by Coase's work in my 3rd year as an undergraduate. In
Coase I found the key to understanding the way trade and production
takes place, and I've used his main ways of thinking in every applied paper
As an arrogant graduate student I once wrote a paper that claimed "Coase
doesn't understand transaction costs." When I was on the job market,
Professor Frank Matthewson from UT took me to lunch.
When we got to the restaurant, there was the great Ronald Coase sitting by
the entrance. "Quick!" said Frank, "Before
he leaves let's go and tell him he doesn't understand transaction costs!" I
froze. Fortunately Frank was joking, but when I went back home, I took the
line out of the paper. Later in reviewing his book, I would put things more
I have met Coase several times throughout my career and corresponded with
him a little, but he never remembers who I am. On a trip to the University
of Chicago in 2004 I had the opportunity to give a lecture
on transaction costs with him in the audience. He approached me
afterwards and said "I don't believe we've ever met, but I do
recognize the name." That was good enough for me, the poor man was 95 years
old at the time!
My Brazillian friend Decio Zylbersztajn took the following picutures after
getting lectured back!
that fat, I was wearing a shirt underneath. It was Chicago in December
Clearly, after all these years, Ronald Coase and I see eye to eye.
Notice RC doesn't need a name tag.
This wasn't my first time being close to a famous economist. Many
years ago, the following picture was taken.
time, I had no real idea who the man at the piano was, or that he would win
the Nobel prize just two years later. Later that day
I had my picture taken with James Buchanan, but I just tossed the
picture on my desk when I got home and it is now long lost. I certainly had
no idea who Vernon Smith was, nor that he would also win a Nobel prize.
Of course, neither knew who I was either.
Thirty-one years later I met Vernon second time. By now I knew
who he was, but that knowledge was not reciprocated. At 87, I think
he's aged better than me, but I haven't shrunk as much ... yet.
Here's a picture with me and some of my UW alums (Wing Suen and Leigh
Anderson), along with Yoram and Gene Silberberg. Taken at Gene's
retirement party in 08.
Gene was one of the best teachers I ever had, and he wrote the best
neoclassical textbooks of all time. Although subtitled "A mathematical
approach" the book was laced with an economic argument throughout. No doubt
that's why so many economists rejected it. It never sold as well as Varian's
Here's a similar picture taken at Yoram's "partial" retirement party in
Leigh Anderson was the only other Canadian student in the UW economics department
while I was there. Very early on it was discovered that she went to
in Edmonton with my wife. "Of course," was the response of every other
American student. "Canada is such a small country!"
Here's a picture of Chris Hall, Denise Hall, and Me at the same 2014
event. I believe I
introduced the two of them in the fall of 1982. No one else remembers.
Finally, here's a picture of me and Yoram. It was a partial retirement
because at the age of 83 he was only reducing his teaching from 4 to 1
Someone that day thought we were father and son. I don't see it