Ronald Coase: Difference between revisions

12:26 PM · Sep 10, 2009

"Economists could not understand how so fine an economist as Coase could make so obvious a mistake." -UChicago peer reviews Coase [Stigler]

6:30 AM · Nov 16, 2009

"[After] 2 hours of argument, the vote went from 20 against and 1 for Coase to 21 for Coase." -Chicago Econ. reviews itself. [Stigler]

6:35 AM · Nov 16, 2009

@ubfid Hi Fergus. The Stigler quotes come from the 'Eureka!' chapter in his autobiography: http://bit.ly/CoaseStigler

6:46 AM · Nov 16, 2009

2010

I guessed wrong when I first heard Coase's theorem phrased as an economics puzzle. No shame in that: it's as deep as it is elegant.

6:44 AM · Feb 7, 2010

To me, Coase's result is simultaneously radical in opposite political directions by decoupling efficiency & distribution via securitization.

2:50 PM · Feb 7, 2010

Via revealed preference, Coase seems to me a modern Solomon asking "Do you really love efficiency, or do you plead before us to seek rent?"

3:00 PM · Feb 7, 2010

2017

Great. Let's do this then as I'm can play as an expert too: Harvard PhD. MIT/Harvard/NBER Post-Docs. Sloan Funded. NSF-Fellowship. Etc...

I'm sorry to tell you, *we* the experts have been lying to Laypeople on Trade, Immigration, STEM and Terror. The crumbling embargo was real. https://x.com/RadioFreeTom/status/941911773376139264

4:46 PM · Dec 16, 2017

1/ I was in multiple closed rooms where experts told me over and over "Well of course we can never say that to the public/donors/students/patients/voters." Cambridge MA, Washington D.C., New York. And now, San Francisco too where it hit quite a few years later.

5:11 PM · Dec 16, 2017

2/ Let me tell you what we've been lying about (in elite terminology) on MAJOR issues one by one: immigration, trade, STEM, mortgage backed securities and self-regulation, terror, fake news and conspiracy. [I will need to run a few errands now, but will return here later today.]

5:19 PM · Dec 16, 2017

3/ IMMIGRATION: EXPERT LIES Experts lie about work based immigration as needed for free markets to remove a tiny 'Harberger Triangle' of inefficiency. It is the reverse: an uncompensated taking of citizen's rights without securitization to transfer a massive 'Borjas Rectangle'.

7:44 PM · Dec 16, 2017

4/ IMMIGRATION (CONTINUED). In free markets, citizens TRADE their rights of preferential labor market access a la Coase's theorem. The giant Borjas Rectangle would stay w/ labor. Inequality could reverse. Women/minorities would enter. Income might again rise. Foreigners welcomed.

7:49 PM · Dec 16, 2017

5/ IMMIGRATION (CONTINUED). Here is an expert article I wrote on the subject (peer reviewed, UN sponsored Journal): https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@ed_protect/@protrav/@migrant/documents/publication/wcms_201871.pdf

Of course the expert community pretends it isn't there as they support a wealth transfer through forced takings of workers' livelihoods.

7:54 PM · Dec 16, 2017

6/ TRADE: EXPERT LIES. In the theory of trade, lies are deeply layered. First there is a nonsensical emphasis on Pareto improvement (as if that was a meaningful social welfare function) & a denial of cardinal utility to stop diminishing returns arguments being applied to wealth.

8:00 PM · Dec 16, 2017

7/ TRADE (continued): [ for @RadioFreeTom @SamHarrisOrg ] Then we substitute a Kaldor-Hicks standard for Pareto welfare as if we were going to tax winners to pay losers. Which trade economists laugh about. Because what factory worker ever heard of “unimplemeted Kaldor-Hicks”.

8:10 PM · Dec 16, 2017

8/ As the grandson of a seamstress, a door2door used clothing salesman, a self educated chemist thrown out of work for his politics and a female college grad who couldn’t work in a man’s world, it feels great to stand as a STEM PhD speaking the language of the academy for them.

8:18 PM · Dec 16, 2017

@SamHarrisOrg @RadioFreeTom 9/TRADE (CONT.): Then there‘s the appearance of “Comparative Advantage” which was recently revealed as an iron clad Exoteric explanation trade experts give to all but each other because the real Esoteric is “too complex” for the rest of us & has holes.

8:29 PM · Dec 16, 2017

@LibertyRBlack The seamstress and the Shmata salesman.

8:33 PM · Dec 16, 2017

@RadioFreeTom @SamHarrisOrg Nah. It’s about institutional betrayal. Nobody resents Elon Musk or Tony Stark for wealth. The poor want experts.

And I’m just looking to you & Sam as my fellow experts to help me try to stop those betrayed from sending a wrecking-ball through the infrastructure of our world.

8:45 PM · Dec 16, 2017

@RadioFreeTom @SamHarrisOrg Oh cool. “Institutional Betrayal” is an academic theory for trauma differentiation of @jjforegon. You in particular should find it interesting I think. People betrayed by institutions with mandates to care for them behave differently re trauma.

Helps to explain a lot in 2008-17.

8:56 PM · Dec 16, 2017

@RadioFreeTom @SamHarrisOrg Also, the public that is HIGH agency is looking for alternate non-institutional experts: @nntaleb @BretWeinstein @jordanbpeterson @CHSommers @SamHarrisOrg @HeatherEHeying @PiaMalaney @peterthiel @DouglasKMurray @Raheelraza @tristanharris @sparker etc....

9:04 PM · Dec 16, 2017

@RadioFreeTom @SamHarrisOrg

These are from trade theorist @paulkrugman in his “Protectionist Moment” piece. I’m not trying to win here. I’m worried that you aren’t watching how this neo-liberal edifice is being abandoned because the expert’s public stance was a lie.

9:22 PM · Dec 16, 2017

@GodDoesnt @RadioFreeTom @SamHarrisOrg @paulkrugman That doesn’t solve it. Are the Harvard and UChicago Econ departments elite or expert? National Academy complex? Same question. NPR? CFR?

Where are the non-elite experts? They are off the institutional grid. They were disappeared. They don’t exist. Yet they are my Shabbat guests.

9:32 PM · Dec 16, 2017

@GodDoesnt @RadioFreeTom @SamHarrisOrg @paulkrugman Same here. All I’m saying is the institutional elites compromise their institutional experts. Every day, institutional experts are free to speak against their institution’s bias. It’s the next day when survivor bias kicks in. Now repeat across non-financially independent experts.

9:40 PM · Dec 16, 2017

@fazinga They are typically educated at top universities. They are typically in non-standard employment. I frequently don’t like what they are saying as it is often disturbing.

9:42 PM · Dec 16, 2017

@SamHarrisOrg @RadioFreeTom 10/TRADE (CONT.) Look at the slide & listen to this talk from a former Clinton administration economist. Notice the words 'Esoteric' vs. 'Exoteric'. Claiming the real arguments are too complex to math guys like me is laughable:

10:14 PM · Dec 16, 2017

11/ TRADE (CONT.) Now what happened when @PiaMalaney, a Harvard PhD Economist finally got to explain to the 'experts' why the world is rejecting experts, and in their own professional language? She's *totally* ignored by the panel.

As if nothing happened.

10:26 PM · Dec 16, 2017

@SamHarrisOrg @RadioFreeTom

12/ End.

I'll pause here. But there's an entire world of Ivy-Level experts who the public suspects exist. People who have paid for their integrity with their careers. Either undisappear these good folks ... or prepare for 7 more years of Trump.

10:30 PM · Dec 16, 2017

@GodDoesnt @disitinerant @RadioFreeTom @SamHarrisOrg @paulkrugman Nah. Just more systems of selective pressures ...

1:29 AM · Dec 17, 2017

@RadioFreeTom @SamHarrisOrg @paulkrugman What are your thoughts here @RadioFreeTom? I can go into detail on a number of these. We could do the fake STEM shortage backed by the @NSF and @theNASciences if you don’t believe in such things.

5:42 PM · Dec 17, 2017

@RadioFreeTom @SamHarrisOrg @paulkrugman @NSF @theNASciences Do we disagree on fundamentals over this:

6:05 PM · Dec 17, 2017

@RadioFreeTom @SamHarrisOrg @paulkrugman @NSF @theNASciences And, no I don’t call something a conspiracy because I disagree w/ experts. I usually agree w/ them! What I disageee with is using expertise to transfer wealth & agency from the supposedly childlike voters who intuit something is rigged but can’t name it in political 3 card Monty.

6:11 PM · Dec 17, 2017

@nntaleb @RadioFreeTom @SamHarrisOrg @BretWeinstein @jordanbpeterson @CHSommers @HeatherEHeying @PiaMalaney @peterthiel @DouglasKMurray @Raheelraza @tristanharris @sparker Hi Nassim, With 66 dyadic relationships between 12 individuals there was zero implied pairwise mutual endorsement or respect implied. I’m certainly happy to make that explicit here for the record if that wasn’t clear.

9:32 PM · Dec 17, 2017

@nntaleb @RadioFreeTom @SamHarrisOrg @BretWeinstein @jordanbpeterson @CHSommers @HeatherEHeying @PiaMalaney @peterthiel @DouglasKMurray @Raheelraza @tristanharris @sparker Will read. Thanks!

9:35 PM · Dec 17, 2017

https://www.ilo.org/sites/default/files/wcmsp5/groups/public/@ed_protect/@protrav/@migrant/documents/publication/wcms_201871.pdf

@Noahpinion So if we push out supply curves there is no first order depressing effect on price...except that maybe it rises? Man this is big. Like Nobel Big!

I mean...I did use supply and demand curves of Borjas. So...What did I get wrong? Do I need to retract:

5:10 PM · Dec 18, 2017

The mistake, IMO, is in modeling immigration purely as a shift in labor supply (partial equilibrium). Since immigrants buy stuff locally, immigration also causes a rightward shift in labor *demand* (general equilibrium).

5:28 PM · Dec 18, 2017

Hence my use of the term '1st-order' (partial equilibrium). A full model would go well beyond what you write including social services, chain migration, dependency ratios, negative externalities, concentrated impact, vote dilution, patent production, sending country impact, etc..

6:08 PM · Dec 18, 2017

A big game in economics is often who gets to use simple models & who gets forced into adding a million baroque complexities. I agree that immigrants add to demand. Also tax social services. Also pay taxes. Also send remittances. Also found businesses. Also crowd out natives. etc.

6:12 PM · Dec 18, 2017

Perhaps you were so busy reacting to the name Borjas that you missed the point of introducing Coase. Coase allows those many nth order effects to be subsumed in the choices of those impacted both positively & negatively. Hence the ability to have unlimited migration. Re-read it.

6:15 PM · Dec 18, 2017

Let's not play games. The unpopular transfer from L to K by a forced taking of the rectangle without the securitization of labor's valuable asymmetric rights and workers rights to trade them stands as an issue having nothing to do with your attack on Borjas.

Your move.

6:19 PM · Dec 18, 2017

Yes, the key is that immigration causes labor demand, as well as labor supply, to shift to the right.

That's going to shrink that rectangle a lot, and could even make the rectangle positive for native-born workers rather than negative.

6:24 PM · Dec 18, 2017

Just to show this with an easy thought experiment, imagine a bunch of rich retirees moved here and spent down their savings. That would shift ONLY labor demand, and not labor supply, unambiguously boosting wages for native-born workers.

6:29 PM · Dec 18, 2017

Now, working immigrants are not rich retirees. But you can apply the same principle. Working immigrants supply labor, but they also demand goods and services produced by labor. So both curves shift, not just one.

6:30 PM · Dec 18, 2017

Tim Bartik

@TimBartik

Also, because immigration causes shift in demand for capital goods, such as housing, in the short-run and medium run there are "accelerator" effects that temporarily boost labor demand even further. See JMP by Greg Howard: https://economics.mit.edu/files/13670

6:36 PM · Dec 18, 2017

Very true, but Eric wanted to stick to the simplest possible model, and I'm obliging him! :-)

6:38 PM · Dec 18, 2017

Look again at my paper and you will see something very odd from a mathematician: there are no equations. That came from reviewing this style of argument you are engaging in now. The point isn't this or that effect. It is forced transfers by capital vs voluntary trade with labor.

7:06 PM · Dec 18, 2017

Remember, Eric, I'm not talking equations! I'm only talking about your graphs! 😊

6:38 PM · Dec 18, 2017

So put in a moving demand curve or even negative rectangles or other red herrings.

The issue is choice. Our work based immigration programs are loved by employers and generally resented by those on whom they are imposed because they involve an unpopular and unsecuritized taking.

7:14 PM · Dec 18, 2017

Sure! No disagreement about that. I'm only taking issue with the idea that immigration can be modeled as a labor supply shock with no labor demand shock! We must include both.

7:16 PM · Dec 18, 2017

No one is arguing that in a full model. The issue isn't about immigrants either. It is about forcible non-Coasian taking of rights through law by employers without trade or consent of labor aided by economics 'experts' portrayed falsely under the banner of free markets.

7:20 PM · Dec 18, 2017

What if my company hires entry-level native-born workers? Seems like a similar situation. The only difference is citizenship.

7:22 PM · Dec 18, 2017

Noah, I'm just really not sure what game you're playing. Economists add (e.g. "your model forgot this externality!") and subtract effects (e.g. "for simplicity we neglect"). None of this matters to my paper or point. None of it. My point is expert aided non-consensual transfers.

7:29 PM · Dec 18, 2017

No games, Eric. Nothing complicated.

Just Econ 101.

7:30 PM · Dec 18, 2017

You're not even close. In econ 101, agents are rational. Remember? If workers benefit from immigration they will support it in droves. Right?

Let me guess, we have to add baroque adjustments to rationality to explain this self-defeating rejection of mass immigration? Something?

7:34 PM · Dec 18, 2017

Baroque adjustments?

Is "immigrants buy stuff" a baroque adjustment?

If so, just call me J.S. Bach!

7:46 PM · Dec 18, 2017

@Noahpinion @TimBartik Oh wow! That's what I *love* about economists: a total reliance on ad hoc selective application of standards to reach desired conclusions.

This is fun. Please apply that selective standard evenly to all of Econ 101 and let's watch your *entire* field disintegrate.

I'll wait.

7:43 PM · Dec 18, 2017

Ha! I'm trying Noah. But it's hard to Teleman something when his econ job depends on his not understanding it, no?

Now engage with the point. Why are the rational worker agents from Econ 101 not favoring this mass immigration that enriches them? Is this Econ 101 or Room 101?

7:50 PM · Dec 18, 2017

Well, I don't have polls of rational worker agents specifically, but just today I did write a post showing several polls indicating pro-immigrant sentiment in the United States: https://bloomberg.com/view/articles/2017-12-18/anti-immigration-fervor-is-different-this-time

7:56 PM · Dec 18, 2017

In other words, I'm not Haydn anything. Can you Handel the data? :D

7:58 PM · Dec 18, 2017

https://politico.com/f/?id=0000015d-c4ac-dd39-a75d-cfbfbc3e0002

Wait, don't those swings *undermine* your Econ 101 point? The power of the Purcell getcha every time. See attached from:

Noah, I answered all your points substantively. Nothing depended on Partial v General or demand curve modeling. It's about capture. https://t.co/poJztJTjOz

8:44 PM · Dec 18, 2017

It's not about polls. It's not about Partial vs General equlibrium models. Not about Econ 101. It's about taking something valuable almost no one would give by choice by having experts defend the interests of employers with selective modeling.

8:47 PM · Dec 18, 2017

A) I'm concerned not with the interests of employers, but with the national interests of the United States of America and its economic health. B) I don't rely on selective modeling, but on empirical evidence, which I believe supports my position pretty solidly!!

8:50 PM · Dec 18, 2017

Noah, I answered every point. You are both for & against Econ 101 while I have no investment in it. If you want to forcibly transfer rights instead of letting workers trade them, ask yourself who you are really trying to benefit.

I'm trying to open borders too, but not as theft.

9:13 PM · Dec 18, 2017

If you want to write a paper detailing my failures, it will be an honor to review it fairly. But it had ZERO dependence on any of the points you made. Including demand curves. Be well.

9:14 PM · Dec 18, 2017

I will consider it. More likely a blog post. In any case, I hope you realize that the vast majority of immigration advocates in the econ profession are being intellectually honest, and not lying to anyone!

Take care, Eric!

9:21 PM · Dec 18, 2017

@Noahpinion @TimBartik If you're honest, then stop w/ the red herrings on Demand Curve modeling as my point is TOTALLY agnostic to that. You write that my paper "Is a good idea that deserves much more thought!" Okay. Don't tell me. Show me a lack of capture. Put in demand curve shocks. NOTHING changes. https://t.co/n8s40niyuf

9:32 PM · Dec 18, 2017

Great. Let's do this then as I'm can play as an expert too: Harvard PhD. MIT/Harvard/NBER Post-Docs. Sloan Funded. NSF-Fellowship. Etc...

I'm sorry to tell you, *we* the experts have been lying to Laypeople on Trade, Immigration, STEM and Terror. The crumbling embargo was real. https://x.com/RadioFreeTom/status/941911773376139264

4:46 PM · Dec 16, 2017

Miriam Makhyoun

@MiriamMakEnergy

In the second post on this thread you stated there is resistance by "laypeople" to "experts" because "they don’t speak the language of the academy. I think we can translate." and now you're saying experts are lying because the public won't get it. Root cause analysis anyone?

6:51 PM · Dec 16, 2017

@MiriamMakEnergy Sorry Miriam: The laypeople don't speak the academy's language so the academy resists the laity and disparages them. Renegade experts who are tired of the expert cartels' embargo against sharing more deep expertise with the laity can translate the laity to the cartels. Helpful?

7:25 PM · Dec 16, 2017

Miriam Makhyoun

@MiriamMakEnergy

Thanks for the clarification. Luckily we have info sharing platforms that override traditional communication mediums, despite their many flaws.

7:29 PM · Dec 16, 2017

2018

@kierhanratty @skdh Arrow? Marshall? Nash? Von Neumann? Black-Scholes-Merton-Bachelier? Modigliani? Coase?

It's about the same to me.

8:38 PM · Jun 28, 2018

2020

@erikbryn Yes. I’m not on the Right. That’s up to them. But there is an open borders right just as there is an open borders left. We aren’t connecting here Erik. Have you worked in Immigration? If not you have to experience it at a policy level. It’s wildly bizarre.

7:00 AM · Jan 6, 2020

Erik Brynjolfsson

@erikbryn

As an immigrant and someone with students who are mostly immigrants and who encounter Kafkaesque barriers, I’m more aware of immigration issues that I wish I needed to be.

I suspect we differ on the optimal policy, even if neither of us is for open borders.

7:07 AM · Jan 6, 2020

You are aware that I wrote a paper on using Coase to ethically open borders? And another one that caught the National Academy and National Science foundation conspiring to use immigration to lower STEM wages?

7:07 AM · Jan 6, 2020

We should hang out.

7:07 AM · Jan 6, 2020

Erik Brynjolfsson

@erikbryn

Sure, I would enjoy that very much.

I’ll DM you.

7:07 AM · Jan 6, 2020

Great!

7:19 AM · Jan 6, 2020

2023

Nathan Barnard

@NathanB60857242

who's your favourite economist?

11:07 AM · Jan 30, 2023

François Divisia or Ken Arrow or Paul Samuelson or Satoshi or Ronald Coase etc.... would be easy to defend.

But Graciela Chichilnisky or Bert Balk would be more interesting offbeat choices I could defend. I don't think they got their due for what is coming in mathematical econ.

5:01 AM · Jan 31, 2023

Martin Bauer

@martinmbauer

Yes, but when I said ‘brightest minds’ I meant it.

8:43 PM · Feb 13, 2023

Arrow, Frisch, Samuelson, VonNeumann, Nash, Friedman, Smith, Mill, Divisia, Coase, Marshall, Fisher, Debreu, Tinbergen, etc.

I have deep issues with economics. But I don’t think I understand your point.

8:43 PM · Feb 13, 2023

2024

You're getting it. May I throw in a few details?

Migrant worker programs already exist. They are loved by businesses for their ability to lower wage outlays by destroying the bargaining positions of natives. That has been true from long before I entered the scene.

The problem has been that Business has been able to advertise three false things:

A) Taking away the rights of native workers is pro-free-market.

B) Business is xenophilic.

C) All opposition to business immigration is bigotted and racist nativism.

This work stepped into that business framework to show that ALL THREE are false.

I'm quite proud of this work. It's free market. It's pro worker. It's pro natives. It's pro business. It's pro xenophile. So it's a nightmare for those lying about immigration. No one implements it because business doesn't care about natives, immigrants or free markets. It cares about money. And workers and natives don't understand coasian analysis is their best friend. It can be used to prove that business hates free markets. As I did here. Rather successfully I might add. The threatening and misguided Mr. JV to the contrary.

Thanks for taking the time to look at the work. I can't engage with these people for the obvious reasons. But at some point I would love to get back to this Coasian approach to fighting corporatism posing as capitalism.

7:21 PM · Oct 5, 2024

Stuart Sims

@SimsYStuart

Yes. All that was made perfectly clear in the paper. I can’t help but suspect @JohnnyVedmore didn’t actually read the paper or didn’t fully understand what he read. Because his basic assertions are all blatantly contradicted by the substance of the paper. …

7:34 PM · Oct 5, 2024

Stuart Sims

@SimsYStuart

Which is a relief to me because I admire you and would feel betrayed to find out you’re actually Evil Eric, globalist controlled opposition.

Hope you have a good day. 😊🙏

7:34 PM · Oct 5, 2024

https://cis.org/Arthur/Wall-St

Appreciate that! It’s all in the paper.

To be a bit fair to this JV I don’t think he knows that we were fighting *for* workers and natives against the open border *conservatives* at the Wall Street Journal. Or Coase. I have been prominent as a restrictionist for 35 years. Never heard of the guy before this. So I think he is confused.

7:46 PM · Oct 5, 2024

2025