1932
Graduated from the London School of Economics with bachelor of commerce degree
1932
Nobel Laureate Ronald Coase
Coase won the 1991 Nobel Prize in Economic Sciences for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.
A Prolific and Pioneering Microeconomist
The late Ronald Coase was a pathbreaking economist and legal scholar whose 1937 paper “The Nature of the Firm” established the field of transaction cost economics. In another seminal work, “The Problem of Social Cost,” published in 1961, Coase set out what is now known as the Coase theorem and a new field in economic research, “law and economics.”
Coase was born in 1910 in London. He studied at the London School of Economics, receiving a bachelor of commerce degree in 1932. In 1931 and 1932, he used a scholarship to visit the University of Chicago, where he was strongly influenced by Frank Knight and Jacob Viner, considered two of the founders of the Chicago School of Economics.
In 1951, Coase moved to the United States. After working at the University of Buffalo and the University of Virginia, Coase moved to the University of Chicago in 1964. He became coeditor of the Journal of Law and Economics.
Coase received the Nobel Prize in Economic Sciences in 1991. The Royal Swedish Academy of Sciences stated at the time that Coase “succeeded in specifying principles for explaining the institutional structure of the economy, thereby also making new contributions to our understanding of the way the economy functions. His achievements have provided legal science, economic history and organization theory with powerful impulses and are therefore also highly significant in an interdisciplinary context. . . . Coase’s theories are among the most dynamic forces behind research in economic science and jurisprudence.”
Coase remained a productive scholar for more than 80 years. In 2012, he released a book about the emergence of capitalism in China and Vietnam, How China Became Capitalist, coauthored with Ning Wang. Shortly before his death in 2013, he helped lay the groundwork for a new academic journal, Man and the Economy, which was launched in 2014 and aims to be a general scholarly journal for students of the economy, while accessible and relevant to the concerned public, policymakers, and business and legal professionals.
At his death, Coase earned praise as “one of the most distinguished economists in the world” from Slate and “the greatest of the many great University of Chicago economists” from Forbes.
“A theory is not like an airline or bus timetable. We are not interested simply in the accuracy of its predictions. A theory also serves as a base for thinking. It helps us to understand what is going on by enabling us to organize our thoughts.”
—Ronald Coase
Nobel Prize–Winning Impact
- In his 1937 study, “The Nature of the Firm,” a then-26-year-old Coase posed two questions: Why are there organizations of the type represented by firms, and why is each firm of a certain size? In awarding Coase the Nobel Prize in Economic Sciences, the Swedish Academy of Sciences stated that these two questions “had seldom been the objects of strict economic analysis and, prior to Coase, lacked robust and valid solutions.”
- In his influential 1960 paper, “The Problem of Social Cost,” Coase said his analysis was “concerned with those actions of business firms which have harmful effects on others.” His paper permanently changed the way economists dealt with the topic of negative externalities.
Milestones
Milestones
1937
Coase published his influential essay “The Nature of the Firm”
1937
1951
Moved to the US, where he would work at the University of Buffalo and the University of Virginia
1951
1960
Published “The Problem of Social Cost,” which gave rise to the “Coase theorem,” as his friend and colleague George J. Stigler dubbed it
1960
1964
Accepted a position at the University of Chicago
1964
2000
Founded the Ronald Coase Institute to assist young social science scholars around the world to study important economic problems in their own countries
2000
2012
Coauthored How China Became Capitalist, which examines the emergence of capitalism in China.
Featured Insights
The Nature of the Firm
Coase’s seminal 1937 paper.
The Nature of the FirmThe Problem of Social Cost
Coase’s groundbreaking 1960 paper.
The Problem of Social CostHow China Became Capitalist: A Conversation between Ronald H. Coase and Ning Wang
A 2012 conversation with the authors of the book How China Became Capitalist.
How China Became Capitalist: A Conversation between Ronald H. Coase and Ning Wang