MELISSA BLOCK, HOST:
The Nobel Prize-winning economist Ronald Coase died this week at the age of 102. David Kestenbaum with our Planet Money team says Coase was a careful thinker who liked to tackle deep questions right up to the end.
DAVID KESTENBAUM, BYLINE: When Ronald Coase accepted his Nobel Prize for Economics, he said that he had known some great economists but never counted himself among them. His contribution, he said, had been to study things that were so obvious they tended to be overlooked.
MICHAEL SCHILL: Ronald was an amazing scholar.
KESTENBAUM: Michael Schill is dean of the University of Chicago Law School where Coase was a professor.
SCHILL: He didn't write tons and tons and tons of articles, the ones he wrote - and we should all be so lucky in our life to have one of them, or half of one of them.
KESTENBAUM: One of the papers that won him Nobel Prize concerned a deceptively simple question: Why do companies exist? In theory, in a free market we could all work for ourselves. We wouldn't need giant companies or companies at all. Coase's explanation was that, in essence, the free market can be a hassle. If we were all on our own, we'd waste time bargaining over everything. We'd need zillions of legal contracts between all of us.
Companies, he argued, were in essence shelters from the open markets. Sandeep Baliga, an economist at Northwestern's Kellogg School of Management, says Coase asked deep questions, and he reasoned out his answers almost as a philosopher would.
SANDEEP BALIGA: He always had cute examples about cattle grazing and things like that and no equations whatsoever in his papers. So if you compare it with contemporary economics, they're just completely different. He was anti-math.
KESTENBAUM: Coase could also be very practical. He famously argued that the government should treat the television spectrum and radio spectrum like property and auction off licenses, which eventually the government did, bringing in billions of dollars of revenue. Coase lived through some huge economic events: the Great Depression, the end of the gold standard, the growth of the global economy. And he never really stopped working. I interviewed him last year. He'd just co-authored a book.
RONALD COASE: I'm 101 at the moment. I get older by the minute.
KESTENBAUM: The book was about China, how it had gone from communism to capitalism so suddenly. That surprised him he said. It surprised everyone.
COASE: I thought it would take 100 years if not more.
KESTENBAUM: What does that teach us that we were all wrong about the speed?
COASE: I don't know. I've been wrong so often. I don't find it extraordinary at all.
KESTENBAUM: Michael Schill at the University of Chicago says that just five weeks ago, Ronald Coase told him he was planning to go to China to give some lectures. Schill says that the university was helping renew his passport when he became ill. David Kestenbaum, NPR News.
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