Not exactly news anymore, but I wanted to note the death of Ronald Coase. Smarter and more knowledgeable people have written and will write about the significance of his work. I will only speak to my own feelings.
“The Nature of the Firm” ― a paper Coase mostly wrote as an undergraduate and published at the ripe old age of 26 ― is the single most brilliant thing I’ve ever read. I was blown away when I read it, and I still am when I think about it. The reason for this is, I believe, the following. Most scientific work ― regardless of the discipline ― explains complicated, almost esoteric things. But every now and then, a researcher comes across a perfectly familiar phenomenon; realizes ― as perhaps nobody had before ― that though familiar, it stands in need of an explanation; and goes on to give that explanation. It is these discoveries that are, in my entirely subjective view, the most amazing. Sir Isaac Newton’s explanation for why apples, and other things, fall to the ground is of this sort. So is Hans Bethe’s explanation for how stars, including the Sun, produce light. Ronald Coase’s explanation for the existence of firms belongs to the same category. And of course, unlike gravity or stellar nucleosynthesis, Coase’s explanation for the existence of firms requires no formulae, no mathematics, nothing beyond logic and common sense. Simplicity is the mark of genius.
As Frank Easterbrook once pointed out, “we live in a world where knowledge is scarce and costly, ignorance rampant.” Coase expanded our capital of knowledge immensely, and his death is a sad loss for all of us.