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Bonus Quotation of the Day…

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… is from page 5 of the great Harold Demsetz’s insightful 2011 Review of Law & Economics article, “The Problem of Social Cost: What Problem? A Critique of the Reasoning of A.C. Pigou and R.H. Coase“: I want to recognize Coase’s important demonstration that it makes no more sense to speak of A harming B than of B harming A when A and B seek to put the same scarce resource to competing uses.  The history of prior discussion of the externality problem is replete with mistaken attribution of causation when the real source of the problem simply is resource scarcity. DBx: No externality in a market setting is unilateral.  All externalities in any market setting are merely conflicts over the use of scarce resources. Comments

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… is from page 5 of the great Harold Demsetz’s insightful 2011 Review of Law & Economics article, “The Problem of Social Cost: What Problem? A Critique of the Reasoning of A.C. Pigou and R.H. Coase“:

Bonus Quotation of the Day…I want to recognize Coase’s important demonstration that it makes no more sense to speak of A harming B than of B harming A when A and B seek to put the same scarce resource to competing uses.  The history of prior discussion of the externality problem is replete with mistaken attribution of causation when the real source of the problem simply is resource scarcity.

DBx: No externality in a market setting is unilateral.  All externalities in any market setting are merely conflicts over the use of scarce resources.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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