Review

     Ronald Coase, an economist and a lawyer has gathered together some of his more recent papers in hiw work the Firm, the Market and the Law.  Coase attacks such issues as "why are firms present in the economy?" and discusses shortcomings of the Hotelling-Lerner solution.  In a classic argument, Coase has researched and lucidly points out that the commonly employed Lighthouse example of a public good is flawed.  Coase mixes legal passages with economic analysis in the creation of his unique prose.

     Coase is generally credited with the Coase theorem, an argument in favor of market solutions to problems such as externalities under conditions of perfectly defined property rights and perfect information as well as zero transaction costs.  As Coase points out in his work however, he has been somewhat misinterpreted.  His aim was to persuade economists to incorporate transactions costs into their economic models, not to make further unrealistic assumptions in the name of perfect capitalism.  Instead, it has been the economist Stigler who has attributed the Coase theorem to Ronald Coase, which is today considered one of his most important contributions to the field.