The Coasian Cult

Contrary to Milton Friedman’s dogmatic ruminations about “positive economics,” the Coase Theorem was accepted by the entire University of Chicago economics department based on Friedman’s acceptance of it after a dinner party at his home with Coase and members of the department.  This is according to Coase himself.  There was no “testable hypothesis” in “The Problem of Social Cost,” and no ”empirical testing” of any kind.  Friedman announced the idea to be acceptable, and so it was, without question, by the Chicago “positivists.”  Very cult-like, wouldn’t you say?

In fact, there are quite a few “libertarians” today who view Coase not only as one of the most influential economists of his time, which he certainly was, but as a Cult Leader Whose Views Should Never Be Questioned. 

(By the way, Friedman’s book, Essays in Positive Economics is, oddly enough, an entirely normative work filled with policy recommendations stating that government SHOULD do this and that, but is devoid of any empirical testing).

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