Ronald Coase
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2009
There's plenty of beauty in Economics Paul, but that works okay: Coase's Thm, Arrow's Impossibility Thm, Fixed Pt Thms, etc...
VaR -> Kayfabe | Coase -> Economics | Stable Tastes -> Kayfabe | Arrow's Theorem -> Economics | Rep. Consumer -> Kayfabe | B. Scholes-> Econ
"Economists could not understand how so fine an economist as Coase could make so obvious a mistake." -UChicago peer reviews Coase [Stigler]
"[After] 2 hours of argument, the vote went from 20 against and 1 for Coase to 21 for Coase." -Chicago Econ. reviews itself. [Stigler]
@ubfid Hi Fergus. The Stigler quotes come from the 'Eureka!' chapter in his autobiography: http://bit.ly/CoaseStigler
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.
To me, Coase's result is simultaneously radical in opposite political directions by decoupling efficiency & distribution via securitization.
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?"
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
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.
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.]
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'.
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.
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.
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.
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 âunimplemeted Kaldor-Hicksâ.
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 couldnât work in a manâs world, it feels great to stand as a STEM PhD speaking the language of the academy for them.
@SamHarrisOrg @RadioFreeTom 9/TRADE (CONT.): Then thereâs the appearance of âComparative Advantageâ which was recently revealed as an iron clad Exoteric explanation trade experts give to all but each other because the real Esoteric is âtoo complexâ for the rest of us & has holes.
@RadioFreeTom @SamHarrisOrg Nah. Itâs about institutional betrayal. Nobody resents Elon Musk or Tony Stark for wealth. The poor want experts.
And Iâm 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.
@RadioFreeTom @SamHarrisOrg Oh cool. âInstitutional Betrayalâ 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.
@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....
@RadioFreeTom @SamHarrisOrg
These are from trade theorist @paulkrugman in his âProtectionist Momentâ piece. Iâm not trying to win here. Iâm worried that you arenât watching how this neo-liberal edifice is being abandoned because the expertâs public stance was a lie.
@GodDoesnt @RadioFreeTom @SamHarrisOrg @paulkrugman That doesnât 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 donât exist. Yet they are my Shabbat guests.
@GodDoesnt @RadioFreeTom @SamHarrisOrg @paulkrugman Same here. All Iâm saying is the institutional elites compromise their institutional experts. Every day, institutional experts are free to speak against their institutionâs bias. Itâs the next day when survivor bias kicks in. Now repeat across non-financially independent experts.
@fazinga They are typically educated at top universities. They are typically in non-standard employment. I frequently donât like what they are saying as it is often disturbing.
@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:
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.
@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.
@GodDoesnt @disitinerant @RadioFreeTom @SamHarrisOrg @paulkrugman Nah. Just more systems of selective pressures ...
@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 donât believe in such things.
@RadioFreeTom @SamHarrisOrg @paulkrugman @NSF @theNASciences Do we disagree on fundamentals over this:
@RadioFreeTom @SamHarrisOrg @paulkrugman @NSF @theNASciences And, no I donât 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 canât name it in political 3 card Monty.
@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:
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).
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..
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.
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.
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.
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.
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.
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.
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
Very true, but Eric wanted to stick to the simplest possible model, and I'm obliging him! :-)
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.
Remember, Eric, I'm not talking equations! I'm only talking about your graphs! đ
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.
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.
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.
What if my company hires entry-level native-born workers? Seems like a similar situation. The only difference is citizenship.
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.
No games, Eric. Nothing complicated.
Just Econ 101.
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?
Baroque adjustments?
Is "immigrants buy stuff" a baroque adjustment?
If so, just call me J.S. Bach!
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.
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?
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
In other words, I'm not Haydn anything. Can you Handel the data? :D
Wait, don't those swings *undermine* your Econ 101 point? The power of the Purcell getcha every time. See attached from:
https://politico.com/f/?id=0000015d-c4ac-dd39-a75d-cfbfbc3e0002
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
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.
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!!
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.
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.
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!
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.
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
In the second post on this thread you stated there is resistance by "laypeople" to "experts" because "they donât 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?
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?
Thanks for the clarification. Luckily we have info sharing platforms that override traditional communication mediums, despite their many flaws.
2018
@kierhanratty @skdh Arrow? Marshall? Nash? Von Neumann? Black-Scholes-Merton-Bachelier? Modigliani? Coase?
It's about the same to me.
2020
@erikbryn Yes. Iâm not on the Right. Thatâs up to them. But there is an open borders right just as there is an open borders left. We arenât connecting here Erik. Have you worked in Immigration? If not you have to experience it at a policy level. Itâs wildly bizarre.
As an immigrant and someone with students who are mostly immigrants and who encounter Kafkaesque barriers, Iâm 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.
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?
We should hang out.
Sure, I would enjoy that very much.
Iâll DM you.
Great!
2023
who's your favourite economist?
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.
Yes, but when I said âbrightest mindsâ I meant it.
Arrow, Frisch, Samuelson, VonNeumann, Nash, Friedman, Smith, Mill, Divisia, Coase, Marshall, Fisher, Debreu, Tinbergen, etc.
I have deep issues with economics. But I donât think I understand your point.
2024
You mean the Friedman money and banking seminar where @haralduhlig was the principal critic who then started to understand only after the seminar?
Iâd be happy to do this with Harald on board. It might motivate us to finish our work that happened after the seminar.
I donât know you @florianederer. But I do know you as a consistantly bad actor. As you may know, the most famous Chicago seminar was that of Coase. Where the seminar became famous *because* Chicago got it wrong. And it took much longer to see the argument.
Harald got it wrong during the seminar. And I also know that Chicago, at least historically, eventually usually gets it right. But Iâd be happy to structure a bet that would penalize your being a bad actor.
I write this not because I care about your opinion. But because Cliff is a colleague. And, at least here, you are a troll. Letâs figure out if there is a mutually agreeable bet that gives me an ability to inflict a cost on this behavior of yours.
And one last point. Arrow and Samuelson were both supportive of this work. But perhaps you see what they do not. Who knows. You are certainly very sure of your position. As am I.
One of us is wrong.
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.
Yes. All that was made perfectly clear in the paper. I canât help but suspect @JohnnyVedmore didnât actually read the paper or didnât fully understand what he read. Because his basic assertions are all blatantly contradicted by the substance of the paper. âŠ
Which is a relief to me because I admire you and would feel betrayed to find out youâre actually Evil Eric, globalist controlled opposition.
Hope you have a good day. đđ
Appreciate that! Itâs all in the paper.
To be a bit fair to this JV I donât 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.
In this brutal campaign, potentially the most important idea for labor surviving, coexisting and thriving with AI got lost. It was raised by @NicoleShanahan inside the @RobertKennedyJr campaign, before they folded into MAGA/MAHA. She whispered it in a sea of shouts and screams, and to the best of my knowledge no one heard it.
The idea is this: UBI is a crude dehumanizing welfare tool which should be abandoned in favor of a Coasian free market solution.
Unfortunately for this idea to work, we have two massive branding problems:
A) Businessmen pretend to be Free Marketeers They are not. Coasian economics gives them an option to live their stated free market dream but where workers can now get wealthy. And, as you might fear, CEOs and VCs hate it. Thus you canât trust the âfree marketeersâ because the free market may be used to help labor over capital.
B) UBI may be dull, blunt, socialist and stupid but it has a massive brand. Coase is a efficient and brilliant but has no marketing department. Itâs a boutique âIYKYKâ product for true free marketeers. Ask any top economist about the most ingenious three ideas ever had by an economist and many of them will include âCoasian Property Rightsâ because it is totally non-obvious and pure.
If you want to save the planet from the twin threats of Communist UBI and Post Capitalist AI, do *NOT* put a tech CEO or VC as AI/Labor Tsar. I know that sounds crazy, but that is simply due to point A). Coase makes you choose between profiteering and free marketeering. And capitalists choose personal wealth over free markets almost always (see the link below).
You want a Tsarina to save the free market in @NicoleShanahan to cut all Americans in using free markets.
Donât let UBi make Americans into welfare recipients. Make them *owners* and make them WEALTHY. Please resist the temptation and do *not* give this portfolio to business people claiming to be free marketeers. Use Coase instead.
This should have been front and center given the looming threat to labor. Letâs start talking about it now. There is no time to lose.
[For how this works technically, change Migrant Workers to AIs in the following:
and the entire framework goes over, more or less word for word.]
đ
Or try this:
2025
Use the Coase, Andrew. Put away the UBI. Partner with @NicoleShanahan as politician; the Coase is strong with this one
Coasian rights are the solution to both our immigration nightmare and our AI labor apocalypse:
- Coase >> UBI
Letâs debate it out.
Guys, AI is going to eat a shit ton of jobs. I donât see anyone really talking about this meaningfully in terms of what to do about it for people. Whatâs the plan?
For how this works, I wrote a paper explaining it in the case of immigration that has very little math in it (I.e. the underlying math is hidden by moving it from formulae to pictures) so everyone can understand it.
To make it into an AI free market solution, change Foreign Worker to âAI systemâ and the idea mostly just goes through mutatis mutandis:
One word answer: Coase.
Letâs start there.
End UBI. UBI is welfare. We need *market* solitions to the AI labor market tsunami.
Letâs use the power of Coasian economics to protect human dignity.
cc: @PiaMalaney, @NicoleShanahan
It's weird that we can all clearly see how AI is about to wipe out millions of jobs all at once, destroy every artistic field, make it impossible for us to discern reality from fiction, and destroy human civilization as we know it, and yet not one single thing is being done to stop it. We aren't putting up any fight whatsoever.
Related Pages
- Arrow's Impossibility Theorem
- Borjas Rectangle Theory
- Boskin Commission
- Council of the Canceled with Eric Weinstein, Jay Bhattacharya and Mike Benz (X Content)
- CPI
- François Divisia
- Gauge Theory
- Ken Arrow
- Immigration
- Migration For The Benefit of All: Towards a New Paradigm for Migrant Labor (Content)
- Renewing our Belief in the Future of Humanity with Eric Weinstein (YouTube Content)