Ronald Coase – still making sense at 102 (!)

10 May, 2013 at 13:49 | Posted in Economics | Comments Off on Ronald Coase – still making sense at 102 (!)

coaseIn the 20th century, economics consolidated as a profession; economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter.

But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task … Today, a modern market economy with its ever-finer division of labor depends on a constantly expanding network of trade. It requires an intricate web of social institutions to coordinate the working of markets and firms across various boundaries. At a time when the modern economy is becoming increasingly institutions-intensive, the reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy.

Ronald Coase, Saving Economics from the Economists

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