Remembering Ronald Coase

Lee Benham

Ronald Coase was a beloved friend. I follow Alexandra with some personal remembrances.

Status symbols
Ronald Coase was not interested in status symbols.

Let me illustrate. On the morning of October 14, 1991 many economists were up early in the morning, anxiously awaiting a telephone call. This is understandable given that the Nobel committee was scheduled to phone the winner in economics that morning. But when the Nobel committee phoned Coase, no one answered. For several days they continued trying to reach him, without success. Reporters fared no better. How was this possible?

At last a reporter for a wire service traveled to the Coases’ home in France and questioned the concierge there. The concierge said they had gone on holiday to Tunisia, but he did not know where. So the reporter began phoning every hotel in Tunisia, searching for Coase. Finally he succeeded and spoke to Coase over the phone. After the phone conversation ended, Marian observed her husband and said in jest, “Ronald, you look as though you have just won the Nobel Prize.” To which he replied, “I have.”

The Nobel committee told Coase that he was the most difficult winner to track down, ever. He had not anticipated the announcement, simply did not consider it, even though he had long been on the short list. He was focused on the interest of travels in Tunisia.

Another example. While living in the United States, Ronald and Marian were invited to a dinner with the Queen in Buckingham Palace. They decided it was a long way to go for a dinner and courteously declined the invitation. Such invitations are often a prelude to awarding of honors.

A third example. As a young economist, Coase was offered the chair which Hayek had held at the London School of Economics. Instead he decided to take a position at the University of Buffalo.

Ronald Coase had a wonderful sense of humor.

After a lecture at Washington University, an undergraduate asked, “Professor Coase, how do you choose your research topics?” Coase replied, “Good topics are everywhere. Gold is all around on the ground. Just bend over and pick it up.” Everyone in the audience looked down at the floor around their feet.

After Coase published his paper on the advantages of auctioning off the radio spectrum rather than having allocation by fiat, he was called to Washington DC to testify. There his proposal was publicly ridiculed by the head of the FCC, among others. I asked Coase, if the people inviting him thought his proposal was absurd, why did they invite him. He answered, “Everyone makes mistakes.“

Ronald Coase was optimistic about the ability of good ideas to win out in the long run. At the same time, he was suspicious of the notion of equilibrium. Why? He referred to his own life experience of extreme events. He was born in 1910, the last year of the Ching Dynasty, and he lived through the major events of the twentieth century. During WWI his father had fought in the Kurdish region of the Ottoman Empire. Coase experienced the Great Depression, the rise and fall of the Nazi regime, the Blitz of WWII while working in Churchill’s government in London, the rise and fall of Communism.

He enjoyed talking to other economist, and he especially loved talking to young scholars. Until his last days, he always made inquiries about how they were doing and about their research. He saw them as the hope of the future and supported them in every way. The Coase Institute now has 470 alumni from 68 countries.

When you read the papers of Ronald Coase, you become aware of more than logic, evidence, and hard work. There is also magic. This is true of his personal observations. With magic-like perception, he saw gold on the ground, everywhere.

Presented at Xiamen University, December 11, 2013. Adapted from a speech given at the Memorials of Ronald Coase, Shenzhen, China, October 19, 2013.  ©2013 Lee Benham