As someone who studied economics, "the nature of the firm" was something I could never bring myself to read because it just doesn't seem relevant or accessible.

As someone who studied economics, "the nature of the firm" was something I could never bring myself to read because it just doesn't seem relevant or accessible. I finally bit the bullet recently, read the actual paper, and wrote about a 1000 word summary here: https://alexpetralia.github.io/2018/03/05/NL-2018-03-05.html https://alexpetralia.github.io/2018/03/05/NL-2018-03-05.html I'll summarize briefly because I'm happy I did bite the bullet: * We pay for a lot of things, and that "price mechanism" seems to be pretty good. If something's bad, we pay less; if it's good, we pay more. Everything relevant to a transaction seems to be "consolidated" into this thing called price * Our whole economy runs on this price mechanism. Everyone pays for goods and services, and the economy works pretty well because of it ("the invisible hand") * But for some reason, most of us work jobs. This means _someone tells you what to do_ inside the walls of the firm. There is no price mechanism here. * That is bizarre. We coordinate all of production in the economy using "the price mechanism," but suddenly within a firm we don't coordinate production using it. * Why don't we use the price mechanism inside a firm? Why does someone tell you what to do? Is it better or worse (ie. "more efficient") than the price mechanism? Why? * This is what Coase tried to figure out, and he came up with a lot of really insightful conclusions