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FB-55611-11
Legal Fiction: An Intellectual History of the Coase Theorem
Steven Medema, University of Colorado, Denver

Grant details: https://securegrants.neh.gov/publicquery/main.aspx?f=1&gn=FB-55611-11

The Importance of Being Misunderstood: The Coase Theorem and the Legacy of ‘The Problem of Social Cost' (Article)
Title: The Importance of Being Misunderstood: The Coase Theorem and the Legacy of ‘The Problem of Social Cost'
Author: Steven G Medema
Abstract: A careful reading of ‘The Problem of Social Cost’ suggests that the negotiation result was not its main message but a means to a different end, and Coase has reinforced this perception in several subsequent commentaries. The argument to be made here, however, is that, viewed from the perspective of the history of economics, the Coase theorem is the most important message to emerge from Coase’s analysis – not because it has been the most remarked upon aspect of Coase’s discussion (which is true) but because of the impact that it has had on economic thinking and policy making.
Year: 2013
Primary URL: http://www.tandfonline.com/doi/abs/10.1080/19390459.2013.835122?journalCode=rjnr20#.V5A1b1ffY3Q
Format: Journal
Periodical Title: Journal of Natural Resources Policy Research 5 (Fall 2013): 249-53

The Coase Theorem Down Under: Revisiting the Economic Record Controversy (Article)
Title: The Coase Theorem Down Under: Revisiting the Economic Record Controversy
Author: Steven G Medema
Abstract: This article examines the debate over the Coase theorem that played out in the Economic Record during the 1970s. This case is uniquely illustrative of the issues with which economists and legal scholars grappled in assessing the Coase theorem’s correctness, relevance, and applicability to legal and economic policy questions and provides insight into the larger set of issues that surrounded the diffusion of the Coase theorem in the economics profession and literature – including its lack of stabilised meaning.
Year: 2014
Primary URL: http://www.tandfonline.com/doi/abs/10.1080/18386318.2014.11681252
Format: Journal
Periodical Title: History of Economics Review 59 (Winter 2014): 1-19.

The Curious Treatment of the Coase Theorem in Environmental Economics 1960-1979 (Article)
Title: The Curious Treatment of the Coase Theorem in Environmental Economics 1960-1979
Author: Steven G. Medema
Abstract: This article examines the first two decades of the history of the Coase theorem in environmental economics, a period during which the theorem’s validity was widely acknowledged but its relevance for economic analysis of environmental issues was almost universally dismissed. The repeated claims of the theorem’s irrelevance and its dismissive treatment in the literature raise the question of why environmental economists were so interested in the Coase theorem in the first place. Several explanations are offered here including the roots of environmental economic theory in the theory of externalities, economists’ fascination with the interesting and challenging theoretical puzzle posed by the theorem, and the normative and ideological thrust that permeated discussions of the theorem, both within and outside the field of environmental economics.
Year: 2014
Primary URL: http://reep.oxfordjournals.org/content/8/1/39.short
Format: Journal
Periodical Title: Review of Environmental Economics and Policy 8 (Winter 2014): 39-57.

Neither Misunderstood Nor Ignored: The Early Reception of Coase’s Wider Challenge to the Analysis of Externalities (Article)
Title: Neither Misunderstood Nor Ignored: The Early Reception of Coase’s Wider Challenge to the Analysis of Externalities
Author: Steven G. Medema
Abstract: The ‘Coase theorem’ has long been the idea most commonly associated with Ronald Coase’s analysis in «The Problem of Social Cost». Yet, Coase frequently argued late in his career that he had been misunderstood, and that the central message(s) of the article lay elsewhere. Though virtually all of the discussion in decades following the publication of «The Problem of Social Cost» focused on Coase’s negotiation result, the fact is that Coase’s message was not, at the start, misunderstood. This paper takes up a number of the treatments of «The Problem of Social Cost» in the years immediately following its publication to demonstrate that Coase’s emphasis on the reciprocal nature of externalities, the importance of transaction costs, the possibility of merger solutions, the costs associated with state action, and the need for a comparative institutional approach were anything but lost on these early commentators. It was only later that the negotiation result became the major fixation of interpreters of Coase’s work.
Year: 2014
Primary URL: http://www.libraweb.net/articoli.php?chiave=201406101&rivista=61
Format: Journal
Periodical Title: History of Economic Ideas 24 (No. 1 2014): 111-132.

1966 and All That: The Birth of the Coase Theorem Controversy (Article)
Title: 1966 and All That: The Birth of the Coase Theorem Controversy
Author: Steven G. Medema
Abstract: The year 1966 was central to the history of the Coase theorem debates, featuring the entry of the idea of a ‘Coase theorem’ into economic discourse and the eruption of the controversy over the the correctness of Coase’s negotiation result. This paper examines economists’ treatments of Coase’s result in 1966 and through the remainder of the decade, a period during which its place in the professional discourse began to solidify and three ‘camps’ began to develop around it: those who believed Coase’s result correct but of limited real-world applicability, those who found it relevant for explaining and devising policy with regard to a wide swath of externality-related phenomena, and those who argued and purported to demonstrate that this result was simply incorrect or wrong-headed on one or another grounds.
Year: 2014
Primary URL: http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9303911&fileId=S1053837214000340
Format: Journal
Periodical Title: Journal of the History of Economic Thought 36 (September 2014): 271-303.

Juris Prudence: Calabresi’s Uneasy Relationship with the Coase Theorem (Article)
Title: Juris Prudence: Calabresi’s Uneasy Relationship with the Coase Theorem
Author: Steven G. Medema
Abstract: This article analyzes Guido Calabresi’s relationship with the idea that has come to be known as the Coase theorem. Because much of Calabresi’s work with the Coase theorem occurred on the front end of the theorem’s history, Calabresi was a player in how the Coase-theorem discussion played out in the early years—particularly within law. This early engagement also made him responsible—both directly, through his writings, and indirectly, through his students and others influenced by his writings—for much of the early diffusion of the Coase theorem in legal literature. Calabresi was a legal scholar with roots in both economics and legal realism who was enamored of the potential power of Coase’s result as he (Calabresi) interpreted it—an interpretation in certain ways radically different from Coase’s own conception of his negotiation result—even if not convinced of its real-world applicability. Although he initially found in Coase’s result the basis for legal-decision criteria that would promote efficient allocations of resources, Calabresi eventually concluded that its true power lay in its implications for the distributional effects of legal rules.
Year: 2014
Primary URL: http://scholarship.law.duke.edu/lcp/vol77/iss2/5/
Format: Journal
Periodical Title: Law and Contemporary Problems 77 (No. 2, 2014): 65-95.

The 8th Duke of Argyll, the Economics of Land Tenancy, and Stigler’s ‘Coase Theorem’ (Article)
Title: The 8th Duke of Argyll, the Economics of Land Tenancy, and Stigler’s ‘Coase Theorem’
Author: Steven G. Medema
Author: Kirk D. Johnson
Author: Warren J. Samuels
Abstract: The view that agricultural tenancy relationships give rise to inefficiencies of various types, including underinvestment in agricultural improvements, has a long history in economic analysis, tracing back at least to Adam Smith’s commentary on the subject in The Wealth of Nations. The present article explores the analysis of tenancy contracting found in the writings of George Douglas Campbell, the 8th Duke of Argyll, who argued the opposite in 1877 – supporting the efficiency of this system against those advocating mandatory compensation for tenant investments at the expiration of leases. Central to Argyll’s position, as we demonstrate, is an argument that embodies the economic logic and results of the modern- day Coase theorem – in particular, its assertion that alternations of legal regimes will not impact the allocation of resources. We also illustrate how Argyll’s defense of the market system combined elements of historical analysis, economic logic, and appeal to the role of habit and custom in market relationships in ways that anticipated more recent development in economic analysis of law and property rights.
Year: 2014
Primary URL: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=52417&idRivista=121
Format: Journal
Periodical Title: History of Economic Thought and Policy 3: (2-2014): 5-28.

Debating Law’s Irrelevance: Legal Scholarship and the Coase Theorem in the 1960s (Article)
Title: Debating Law’s Irrelevance: Legal Scholarship and the Coase Theorem in the 1960s
Author: Steven G. Medema
Abstract: This Article examines the diffusion of Coase's negotiation result in the legal literature during the 1960s. In particular, the Article will focus on how the negotiation result posed a challenge for received legal thinking, how Coase's result related to far older attempts to bring economic thinking to bear on the law, how legal scholars utilized this result in their analysis, and how its treatment by legal scholars compares to that accorded it by economists during this formative stage in the Coase theorem's history. What will emerge, in the end, is an enhanced understanding of how the Coase theorem came to have a place in legal scholarship, as well as some additional insight into this neglected epoch in the history of the economic analysis of law.
Year: 2014
Primary URL: http://scholarship.law.tamu.edu/lawreview/vol2/iss2/3/
Format: Journal
Periodical Title: Texas A&M Law Review 2 (Fall 2014): 159-213.

‘A Magnificent Business Prospect …’: The Coase Theorem, the Extortion Problem, and the Creation of Coase Theorem Worlds (Article)
Title: ‘A Magnificent Business Prospect …’: The Coase Theorem, the Extortion Problem, and the Creation of Coase Theorem Worlds
Author: Steven G. Medema
Abstract: The Coase theorem, circa the 1970s, had no settled meaning or content; instead, that meaning and content was created – and in differing ways – by the modeling choices of scholars who attempted to grapple with and assess the proposition that Coase had laid out in 1960. These modeling decisions included both the theoretical frameworks laid onto the theorem and the assumptions (including meanings ascribed thereto) said to underlie it. The present article illustrates this using the 1960s and 1970s extortion debate as a backdrop, showing how conclusions reached regarding the theorem's validity hinged on the Coase theorem worlds created by the authors involved.
Year: 2015
Primary URL: http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9678564
Format: Journal
Periodical Title: Journal of Institutional Economics 11 (June 2015): 353-78.

Crossing the Atlantic with Calabresi and Coase: Efficiency, Distribution, and Justice at the Origins of Economic Analysis of Law in Britain (Article)
Title: Crossing the Atlantic with Calabresi and Coase: Efficiency, Distribution, and Justice at the Origins of Economic Analysis of Law in Britain
Author: Steven G. Medema
Abstract: The slow diffusion of the economic analysis of law into Europe has been much remarked upon in the literature, but the diffusion itself has not, to this point, been made the subject of historical study. The present paper examines the two earliest substantive discussions of economic analysis of law in the British literature and the somewhat unlikely sources from which these discussions emanated. In doing so, it highlights the possibilities and limitations that were seen to attend the application of economic ideas to legal thinking and points to the impediments to a broad acceptance of the economic approach.
Year: 2015
Primary URL: http://www.libraweb.net/articoli.php?chiave=201506103&rivista=61
Format: Journal
Periodical Title: History of Economic Ideas 23(3 2015): 61-87.


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