Ronald Coase, the British Tradition, and the Future of Economic Method

Abstract

Ronald Coase won the Nobel Prize in economics with an approach to doing economics that is distinctly old fashioned. In terms of method, Coase belongs to the late nineteenth and early twentieth century British tradition. To demonstrate this, we use the Appendix of this paper to juxtapose Coase’s views on method with those reflected in W.A.S. Hewins’ essay on economics in the classic 1911 edition of the Encyclopedia Britannica ² For all intents and purposes Coase’s views are identical with those expressed in Hewins’ essay.3 This may seem a bit odd, given the close association of Coase’s name with the Chicago school. However, as Posner (1993b) and Medema (1994a,b; 1995b) have pointed out, it would be incorrect to associate Coase with the so-called Chicago view. In fact, Coase quite clearly identifies his own views with those of Alfred Marshall, and, given the important role played by Marshall in the establishment of the British approach to doing economics in the early 20th century, it becomes less surprising that Coase’s views coincide so closely with this British tradition.