Professor Ronald Coase | Credit: Coase-Sandor Institute for Law and Economics, University of Chicago Law School
Ronald Coase (1910-2013) was a British economist and recipient of the Nobel Prize for Economic Sciences. He received this award in 1991 for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.
He studied for the Bachelor of Commerce degree at LSE from 1929 to 1932, and received the Sir Ernest Cassel Travelling Scholarship in 1932, which he used to visit the University of Chicago. After short spells at the Dundee School of Economics and Commerce (later part of the University of Dundee) and the University of Liverpool, Ronald returned to LSE as a member of the LSE staff in 1935. He remained until 1951, in which year he was awarded an earned doctorate in Economics from the University of London.
Coase’s writings were sparse, yet his impact on economics was profound. He did pioneering work on the ways in which transaction costs and property rights affect business and society. In his most influential paper, The Problem of the Social Cost (1960), he developed what later became known as the Coase theorem. His work was a call to legal scholars to consider the process of bargaining about rights outside the context of litigation.
Upon publishing The Problem of Social Cost, Coase at first received negative feedback from the faculty at the University of Chicago over his conclusions and apparent conflicts with A. C. Pigou. Coase presented his paper in 1960 during a seminar in Chicago to twenty senior economists including George Stigler and Milton Friedman. He gradually won over the usually sceptical audience, in what has later been considered a "paradigm-shifting moment" in the genesis of Chicago Law and Economics. Four years later, in 1964, he joined the University of Chicago where he became the Clifton R. Musser Professor of Economics in the Law School and remained for the rest of his life.
The ground-breaking The Problem of Social Cost article, together with an early work, The Nature of the Firm (1937), which surmised a new concept of economic analysis, transaction costs and the reasons for why firms exist, made the breakthrough in economic science that led to his Nobel Prize.
LSE's Department of Economics and Economica journal now co-host the bi-annual Economica-Coase lecture series.
Sources: LSE People, Wikipedia and Nobel Prize