Coase brought non-stop acclaim to the University of Chicago following his unceremonious departure from UVA. University of Chicago Law School

Credited with launching the field of Law and Economics, Ronald H. Coase was one of the world's most acclaimed living economists. That is until Monday, September 2, when he died at the age of 102.

"If there's such a thing as the founding fathers of Law and Economics, he is up there," says University of Virginia law professor George Cohen. "He got the whole enterprise started."

For the past five decades, Coase's ideas have brought accolades to the University of Chicago, acclaim that, ironically, could have gone to UVA, where Coase was teaching when he published his most famous treatise— except that UVA let him leave due to what appears to have been a misunderstanding.

His seminal paper, "The Problem of Social Cost," was published in 1960 when the British-born Coase was living in Charlottesville and teaching economics at what UVA then called its Thomas Jefferson Center for Studies in Political Economy.



"He introduced this whole notion," says Cohen, "that people through private negotiation can reach an efficient solution."

What Coase and his colleagues were challenging, Cohen says, was the widespread belief that the only way to protect scarce resources— such as air, water, or habitat— was via taxation. Unfortunately, as Coase and Center co-founder James M. Buchanan would learn, using markets to achieve efficient and beneficent goals would run afoul of the university administration intent on a more "modern" outlook.

In 1994, Coase told this reporter how one of his UVA colleagues accidentally received a copy of a secret dossier compiled by then Dean of the Faculty Robert Harris in which Harris outlined a plan to change the economics faculty. Under then President Edgar Shannon, Harris allegedly used non-promotion and non-offer-matching to force Jefferson Center scholars to disperse. Coase left UVA for Chicago in 1964; Buchanan departed four years later.

"I think [the report] was very damning because it makes quite clear what their attitude was and there was actually a policy to get rid of us," Coase said. "My wife once heard someone at a cocktail party describe me as someone to the right of the John Birch society. It wasn't true. You know, I'm English and have a completely different history from most of the other people and am not really much involved at all in American politics."

Buchanan and Coase got the last laugh, as each would win the Nobel Prize for Economics, Buchanan in 1986 and Coase in 1991.

"The secret report became known in a very peculiar way," Coase told me. "What happened was that Warren Nutter, who was chairman of the department, asked for some file, and when he got it, there it was.

"The University of Virginia was not interested in retaining me," continued Coase. "It was a political thing. They had decided that my views, which they never understood— they never tried to ascertain my views actually." While that controversy raged long before Cohen began teaching, the novel theories that Coase left behind are still taught at UVA and across the world "His ideas have had remarkable influence and changed the way people thought about a lot of issues," says Cohen. "He was a tremendous figure."