I find that I've been a Coasean all along

Anti-dismal has a piece which tells me that, much to my surprise, I've not been a liberatairan, nor a classical liberal, all this time but in one respect at least I've been a Coasean:


Coase’s ‘market supporting’ credentials do not therefore derive from a position that market contracting is always best.They derive from his point that only the ability to try out different organisational settings and subject them to a test of survivability will reveal what structures are most productive. It is the existence of competition between alternative solutions to the problem of economising on the cost of transacting that is important. Planning and market transacting are both potentially helpful (indeed ideally equally so at the margin) and ‘what this mix should be we find as a result of competition’.

As I've mentioned many a time my view is that there are some things that have to be done and that can only be done with the compulsion available to government. There are also other things that are not best solved by the actions of markets unadorned. Then there's everything else where our own voluntary cooperation in markets guided by the price system will do just fine thank you very much. There are two questions that follow from this.

The first is the obvious one of how many things can be left to said market and how many others need to be done by government or without those markets. My basic feeling (which is what perhaps makes me a classical liberal again) is that there's not all that much that has to be done by government and most can indeed be left alone to our own private interactions.

The second is, well, how do we decide? How do we reach some useful definition of what should be left to which mechanism? And it is here that I have been, unknowingly, a Coasean. For my answer has been that we should have a market in methods of organisation and then see what happens. We can adopt the method that seems to work best in any particular situation.

I would go one stage further and add that I am, in some manner, also a Marxist, in that I'm quite happy with the idea that which is done best, how, can change along with the technologies we have available to do them. This is reminiscent of Marx's point about social relations being determined by technology. And I think that this last might be the most important political point of all. We currently regard both education and health care as being something the State must provide. Sure, we tinker with allowing private providers but the general consensus is that the basic services must be both financed and overseen by hte State. And I'm entirely unconviced that this is going to be true going into the future. It might have been true in the past but given the technological changes in both sectors there's no reason at all to think that the social relations might not be changed by technology.

If, for example, online eduational technology continues to improve as it has been then is it really necessary to turn over all children to the monopoly of the teachers' unions for 11 years of their lives?

Another way to put this is that if we assume that both Marx and Coase were right, then both would be telling us that the mix of State and non-State activities should be changing over time. Rather than the current situation where anything once colonised by the State seems to stay there.