3 ms·

This is one of the most seminal papers in Economics and the only to win a Nobel that does not have a single equation in it :) In general, Coase's transaction c

This is one of the most seminal papers in Economics and the only to win a Nobel that does not have a single equation in it :) In general, Coase's transaction cost framework is very useful in the Internet era - Amazon EC2 can be viewed as a way for firms to lower transaction costs of scaling up and down to zero, something that not even large firms could manage, some time ago. Shopify is a way for small merchants to access costs per transaction that were only available to large ecommerce giants and so on and so forth. Transaction costs are just a model, and just like all models, the transaction cost model is imperfect and not always right, but often useful. What transaction costs in the modern economy are ripe to be pared down?

igorkraw 4y ago
From the top of my head - Suing a powerful adversary if you are in the right - democratically changing a law (and abolishing old laws) to adapt to changed technologies - patents and copyright as a way to motivate innovation (those are transaction costs introduced with a noble intention, but I think they can be improved by e.g. just paying people to - land speculation (georgism ho!) - borders and restrictions on free movement - moralistic bans on drugs and prostitution instead of regulation to make those transactions safe and cut down on externalities The book "radical markets", while not 100% aligned with my politics gives a more detailed overview on some of these
- haltingproblem 4y ago
  Great list. I think #1 is in the process of being unbundled. We _just_ need a coordination platform which brings lead plaintiffs, backers and lawyers together on a platform. Perhaps you mean something else by it? Abolishing old laws already happens in some states but it needs to be lower transaction cost event. This would be a fun platform to build and something that can bring manifold benefit to society. Changing laws is a special and more complex case of creating new laws and has too much complexity maybe 10x harder than repealing old laws. The last two evoke too many beliefs about ideology, moralism and nativist beliefs so I won't go there. Can you extrapolate on land speculation?
  - igorkraw 4y ago
    I meant things like the current Twitter debacle where it might be costlier for Twitter to enforce a legally binding contract than for them to go along with Musk wanting to renegotiate, or the cost and risk of a patent litigation making it exceedingly rare for invalid patents to get nullified, or people not routinely suing big companies for losing their data or breaking their services. Litigation costs money, the risks are asymmetrical and hedged towards large players, which makes the game nudged towards large players, heirs and monopolists. Land speculation is the general Georgist critique of natural monopolies like land allowing people to make profits without labor or risk, creating rents which suck up the efficiency gains of the wider economy.
paulpauper 4y ago
That was back when it was much easier to make contributions to the sciences. Now you need 50+ page paper with 2-4 authors full of stats and regression to get maybe published in a mid tier journal.

igorkraw 4y ago

From the top of my head - Suing a powerful adversary if you are in the right - democratically changing a law (and abolishing old laws) to adapt to changed technologies - patents and copyright as a way to motivate innovation (those are transaction costs introduced with a noble intention, but I think they can be improved by e.g. just paying people to - land speculation (georgism ho!) - borders and restrictions on free movement - moralistic bans on drugs and prostitution instead of regulation to make those transactions safe and cut down on externalities The book "radical markets", while not 100% aligned with my politics gives a more detailed overview on some of these

haltingproblem 4y ago
Great list. I think #1 is in the process of being unbundled. We _just_ need a coordination platform which brings lead plaintiffs, backers and lawyers together on a platform. Perhaps you mean something else by it? Abolishing old laws already happens in some states but it needs to be lower transaction cost event. This would be a fun platform to build and something that can bring manifold benefit to society. Changing laws is a special and more complex case of creating new laws and has too much complexity maybe 10x harder than repealing old laws. The last two evoke too many beliefs about ideology, moralism and nativist beliefs so I won't go there. Can you extrapolate on land speculation?
- igorkraw 4y ago
  I meant things like the current Twitter debacle where it might be costlier for Twitter to enforce a legally binding contract than for them to go along with Musk wanting to renegotiate, or the cost and risk of a patent litigation making it exceedingly rare for invalid patents to get nullified, or people not routinely suing big companies for losing their data or breaking their services. Litigation costs money, the risks are asymmetrical and hedged towards large players, which makes the game nudged towards large players, heirs and monopolists. Land speculation is the general Georgist critique of natural monopolies like land allowing people to make profits without labor or risk, creating rents which suck up the efficiency gains of the wider economy.

paulpauper 4y ago

That was back when it was much easier to make contributions to the sciences. Now you need 50+ page paper with 2-4 authors full of stats and regression to get maybe published in a mid tier journal.