Today is the 100th birthday of Ronald Coase
To mark the occasion The Economist has run "Why Do Firms Exist?"
And here's what George L. Priest said about "The Problem of Social Cost":
The political or ideological dimension of the Coase Theorem is often ignored. To Coase, the implication of the proposition that "In the absence of transaction costs, the assignment of liability will have no effect on the allocation of resources" is that courts and the government can do no good by interfering in markets. If government action can somehow reduce transaction costs, that may enhance welfare; otherwise, courts and the government are fooling themselves by attempting to improve upon market outcomes and should stay out. Coase’s ambition was to deflate arguments for more intrusive government, not—as it happened—to revolutionize our understanding of the operation of the legal system.