The Problem Of Social Cost
'The Problem of Social Cost' (1960) by Ronald Coase is an article dealing with economic problem of externalities. It draws from a number of English legal cases and statutes to illustrate Coase's belief that legal rules are only justified by reference to a cost benefit analysis, and that nuisances that are often regarded as being the fault of one party are more symmetric conflicts between the interests of the two parties. If there were no such things as the costs of doing a transaction, legal rules would be irrelevant to the maximization of production. Because in the real world there are costs of bargaining and information gathering, legal rules are justified to the extent of their ability to allocate rights to the most efficient right-bearer. Along with an earlier article, The Nature of the Firm, this was cited as being a reason for Coase's award of the Nobel Memorial Prize in Economic Sciences in 1991. As of June 2012, The Problem of Social Cost is the most cited law review article in history.
Read more about The Problem Of Social Cost: Summary, Theoretical Challenges, Cases and Statutes, See Also
Famous quotes containing the words problem, social and/or cost:
“And just as there are no words for the surface, that is,
No words to say what it really is, that it is not
Superficial but a visible core, then there is
No way out of the problem of pathos vs. experience.”
—John Ashbery (b. 1927)
“I was like a social worker for lepers. My clients had a chunk of their body they wanted to give away; for a price I was there to receive it. Crimes, sins, nightmares, hunks of hair: it was surprising how many of them has something to dispose of. The more I charged, the easier it was for them to breathe freely once more.”
—Tama Janowitz (b. 1957)
“The Fountaine of parents duties is Love....Great reason there is why this affection should be fast fixed towards their children. For great is that paine, cost, and care, which parents must undergoe for their children. But if love be in them, no paine, paines, cost or care will seeme too much.”
—William Gouge (20th century)