1966 AND ALL THAT: CODIFICATION, CONSOLIDATION, CREEP, AND CONTROVERSY IN THE EARLY HISTORY OF THE COASE THEOREM

Abstract

The year 1966 was central to the history of the Coase theorem debates, featuring the entry of the idea of a ‘Coase theorem’ into economic discourse and the eruption of the controversy over the the correctness of Coase’s negotiation result. This paper examines economists’ treatments of Coase’s result in 1966 and through the remainder of the decade, a period during which its place in the professional discourse began to solidify and three ‘camps’ began to develop around it: those who believed Coase’s result correct but of limited real-world applicability, those who found it relevant for explaining and devising policy with regard to a wide swath of externality-related phenomena, and those who argued and purported to demonstrate that this result was simply incorrect or wrong-headed on one or another grounds.