progressivism, individualism, and the public ... - Telmarc Group

The Telmarc Group
PROGRESSIVISM, INDIVIDUALISM, AND THE PUBLIC
INTELLECTUAL
to those who could not afford them and the elimination of Glass Steagall. Like Hayek,
the individualists does not like a libertarian look upon laissez fairs as the model of perfect
economic viability, there is a role for Government, to ensure that "property" is protected
and those having fiduciary responsibilities and accruing the gains have a concomitant
liability, personally if necessary.
The authors continue:
"From a legal and policy perspective, Coase’s thesis had two profound implications.
First, and most obviously, Coase demonstrated that in many cases the only form of
government intervention required to address an apparent externality was to create
clear property rights and workable means of adjudication, and the market would do the
rest. More intrusive forms of government intervention—whether in the form of tax
incentives, regulations, or even (as in the case of the electromagnetic spectrum)
expropriation—were simply not necessary.
Coase also recognized, however, that there are times when the costs of negotiating
among multiple parties would make market solutions infeasible.
When the transfer of rights has to come about as a result of market transactions carried
out between large numbers of people or organizations acting jointly, the process of
negotiation may be so difficult and time-consuming as to make such transfers a practical
impossibility … In these circumstances it may be preferable to impose special
regulations (whether embodied in a statute or brought about as a result of the rulings of
an administrative agency).
Thus Coase recognized that the least cost way was having clear property rights and costs
and then seek remediation between the parties. However, and this is critical, Coase was
not laissez fair, namely leave all decisions to the free market, for there were time when
tee costs of doing so exceeded the benefit if left amongst the parties and thus the least
cost way was to have the Government take that function. Thus the Coasian world was not
a world with any Government but a world with a rational Government where the
Government did what was cost effective.
Finally the author's state:
"Until Coase, externalities were seen as bad acts, the willful imposition of harm by a
wrongdoer on an innocent victim. Given this characterization, the appropriate policy
objective was to stop the wrongdoer and make the victim whole. But Coase explained that
the relationship between the party “imposing” the externality and the one “affected by”
it was in fact reciprocal. For example, a rule prohibiting a locomotive from emitting
sparks into the farmer’s fields imposed costs on the railroad that are no different, in kind,
from the costs that would be borne by the farmer under a rule requiring crops to be
planted further back from the tracks. The Coasian objective, then, is to determine which
rule imposes the least costs on society overall—whether it is more efficient, that is, to
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