Ronald Coase, 1910–2013

Ronald Coase got an unusual dinner invitation after he published a scholarly article in 1959. A group of 20 economists at the University of Chicago—at least two of whom would end up, like Coase, as Nobel prize winners—weren’t really interested in eating. They just wanted to hear the University of Virginia professor explain his novel theory, which they were all convinced was dead wrong, about how broadcast licenses should work. By dessert, after what he later called a “very grueling” discussion, Coase had quietly won every last one of them over.

The insights Coase laid out that evening reversed “the prevalent thinking of more than a century,” said the Chicago Tribune. He argued that instead of granting licenses, the government should auction them off as property, allowing the companies that bought them to sell them on like real estate. That was part of his broader point—later dubbed “the Coase theorem” to his own discomfort—that many problems addressed through government regulations can be better resolved by striking deals in the marketplace. Coase laid out that position at the beginning of an era that would constantly question “the payback of regulation.” And in the decades to follow, “a lot of people took that and ran.”

Born in London to two postal workers, Coase was a frail child, but when he was 11 a phrenologist told his father that the boy had “considerable mental vigor,” said The New York Times. He was training to become an industrial lawyer when an economist’s lecture inspired him to switch to the London School of Economics, where he later taught. He immigrated in 1951 to the U.S. and took posts at the University of Buffalo, the University of Virginia, and—largely on the strength of his dinner performance—the University of Chicago.

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Even before Coase won the 1991 Nobel prize in economics, he had been transformed into “an icon of the political right,” said The New Yorker. “His subtle reasoning was bowdlerized and distorted” by opponents of big government. A dedicated empiricist, Coase felt he was often misunderstood by those who he said “live in their world without discomfort,” said Bloomberg Businessweek. Too many economists, he said, were “disdainful of what happens in the real world.”