Four Great Economists

Ronald Coase passed away this week at the age of 102. Three other greats have passed this year, Armen Alchian (98), James Buchanan (93),  and Robert Fogel (86). They were also four of my favorite economists. Two were Nobel Prize winners, two started their careers as socialists and two were primarily knowns as empirical economists. None were particularly known for advanced mathematics.

Coase was best known for the so-called “Coase Theorem” (warning:pdf) and founding the journal Law and Economics. I haven’t read much of Coase directly (apparently the “Coase Theorem” paper is hard to follow), but the exposition in both David Friedman’s and Steven Landsburg’s Price Theory textbooks give very clear and insightful presentations of the ideas.

Alchian was probably my favorite of the bunch. He wrote on The Firm, property rights and many other subjects. He looked at things from a hundred different angles. That type of thinking went into the problems section of his textbook.  Many of the questions are open ended and very challenging. My favorite paper of his is “Private Property and the Relative Cost of Tenure“. He points out that the reasons often given for tenure don’t really make sense, but looking at it through the lens of property rights brings it into focus. It ends with several ideas for testing his hypothesis.

Alchian was mentioned in the book The Prisoners Dilemma. As an economist at Rand, he was selected to participate in a repeated prisoner’s dilemma experiment. As he made his moves he made notes about what he thought the other player was up to, what he thinks that he is doing, and how he should proceed. The result strikes me as funny.

I haven’t read much Buchanan, but his quotes are frequently featured by Don Boudreaux at Cafe Hayek. He was the most philosophically focused of the four, and the most prolific. Reading Buchanan set me to looking at issues of voting and public choice.

Robert Fogel was one of the founders of Cliometrics, the quantitative study of history. His book Without Consent or Contract changed the way I thought about the Civil War. I’m still not certain that it was a good thing that the war happened, but I’m not certain that it was the worst outcome. The entire book is well written history, and the quantitative emphasis really gives perspective that a lot of history writing lacks. His book Railroads and American Economic Growth showed that the common view that railways were essential to growth in the U.S. was not correct, and in fact the upper bound for growth lost was only around 5%. He may not have been correct (pdf) but reading his book you realize how much history that you’ve missed.

His latest book was The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World. It shows how the length of life in first world countries has increased substantially since about 1900. The change in life expectancy really is remarkable, as shown here, for example.  I guess it’s too much to ask that these four might have lived a few years more.



5 Responses to “Four Great Economists”

  1. David Friedman Says:

    I remember, when I was finishing my Price Theory text, writing Armen Alchian to tell him that all I had left to do was filing off the serial numbers on the problems I had stolen from him.

    People interested in a fairly detailed explanation of Coase’s most famous article and its implications, at least as I see them, can find it in:

    Coase’s comment on the piece was that one never understood one’s ideas until someone else explained them. I will never know if he had his tongue firmly in his cheek.

  2. darfferrara Says:

    The dry British humour is tough to discern sometimes.

    You may have stolen some problems from Alchian, but you came up with some good questions of your own. I’m pretty sure that Alchian didn’t have any questions about convincing forty orcs not to kill you when you only have ten arrows (the first puzzle from Hidden Order). And I’m not sure what the solution to that is either.

  3. Don Boudreaux Says:

    Excellent post! (One small matter, though: I blog, not at EconLog, but at Cafe Hayek.)

    • darfferrara Says:

      I apologize! I had inappropriately assume perfect substitutability of libertarian blogs. It’s been fixed.

  4. David Friedman Says:

    “Coase was best known for the so-called “Coase Theorem” (warning:pdf) and founding the journal Law and Economics.”

    He was best known for “The Problem of Social Cost.” The Coase Theorem is one piece of the argument, but seeing it as the whole argument is a serious mistake.

    The JLE was founded by Aaron Director. Coase just wrote its most famous article.

    Sorry to take so long. For some reason I didn’t notice that sentence the first time I read the piece.

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