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The University regrets to report the death of Professor Ronald Coase, Assistant Lecturer in Commerce 1934-1935.
Professor Coase won the Nobel Prize in Economics in 1991 by injecting a note of reality into the world of market theories. In a 60-year career he wrote only about a dozen significant papers and used little or no mathematics, yet his impact on his discipline was profound.
In the 1930s the received wisdom among many Western economists was that in an ‘efficient’ free market individuals should operate as independent contractors, and that centralised economic planning, as practised in the Soviet Union, was doomed. If that was so, Professor Coase wondered, why did huge companies such as Ford exist, with centralised operations, staff employed on long-term contracts and central planning?
The answer, which Professor Coase set out in his article The Nature of the Firm in 1937, is that making things required collaboration, and organising collaboration carried costs which account for a considerable share of the total use of resources in the economy. Companies emerge when it becomes cheaper to gather people, tools and material under one roof, rather than going out to find the best deal every time labour or materials are required.
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