Pinpointing the time and place Ronald Coase’s eureka moment: Palo Alto, California (1958-59 academic term)

To recap my series of blog posts on Ronald Coase, I have been tracing the intellectual origins of what I like to call “Coase’s axiom”: the counter-intuitive idea that harms are a reciprocal problem. Did this idea or axiom originate with with Frank Knight’s critique of A. C. Pigou? [1] With Arnold Plant’s courses on industrial law while Coase was a student at the London School of Economics (LSE), [2] or more generally, with the opportunity-cost approach to economics that was developed at the London School of Economics in the 1930s? [3] What about Wesley Hohfeld’s theory of legal relations? [4] I will now conclude my series with two observations. One is that the answer to the questions I have posed in the previous paragraph is most likely “All of the Above.” The other is that Coase’s notion of reciprocal harms is qualitatively different than anything else that came before him: Knight, Plant, and the so-called “LSE tradition” all focus on costs, while Hohfeld’s focus is on reciprocal…