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:
“It is part of the educator’s responsibility to see equally to two things: First, that the problem grows out of the conditions of the experience being had in the present, and that it is within the range of the capacity of students; and, secondly, that it is such that it arouses in the learner an active quest for information and for production of new ideas. The new facts and new ideas thus obtained become the ground for further experiences in which new problems are presented.”
—John Dewey (1859–1952)
“Physical nature lies at our feet shackled with a hundred chains. What of the control of human nature? Do not point to the triumphs of psychiatry, social services or the war against crime. Domination of human nature can only mean the domination of every man by himself.”
—Johan Huizinga (1872–1945)
“The one regret I have about my own abortions is that they cost money that might otherwise have been spent on something more pleasurable, like taking the kids to movies and theme parks.”
—Barbara Ehrenreich (b. 1941)