Re: Coase's Theorem and Intellectual Property

Robin Hanson (
Tue, 22 Dec 1998 14:04:46 -0800

Dick Grey writes:
>>Coase's original paper gave no theorem, and no one else has bothered to
>>write one down because it's almost a tautology: if you assume
>>[list of assumptions]
>Did Coase in fact simply assume these things in his paper? What did he win
>the Nobel prize for, then?

Asking the right question, even if the answer is trivial.

>>I think the key problem is that most "libertarians" don't like simple
>>consequential analyses of legal & political questions, preferring
>>axiomatic analyses instead.
>That's because we don't believe that the end justifies the means. We prefer
>a more principled approach to ethical questions. A consequential analysis
>gives the probable outcome of a given policy, but whether that outcome is
>considered good or bad often depends on the audience.

Having the ends justify the means is "principled." Maybe its not a principle you like, but that's another matter. I think it's an empirical fact about policy debate if one sticks with simple consequences there usually isn't much debate about which consequences are good or bad.

>We have more than
>adequate reason, on nonconsequentialist grounds, to believe that coercion
>inevitably makes most people, and eventually everyone, worse off regardless
>of the achievement of any particular good favored by the purveyors of
>force. Analyses like Coase's serve to buttress this belief by showing how
>solutions arise on a free market, but don't - and shouldn't - form the
>foundation of (anti)political philosophy.

But Coase gives a *consequential* analysis in favor of markets!

>>Or they may be forced to invoke an [un]usual consequence
>>like "reduces liberty"
>So that's not a bad consequence in your book? I predict your judgment would
>be different if it were specifically *your* liberty that's being reduced
>instead of (the hidden assumption) someone else's.

If my liberty was reduced, that should show itself in lots of simple familiar consequences. I wouldn't get to eat the things I like, live in the places I like, etc. I could be displeased by that outcome even without adding on an extra "and my liberty was reduced."

>>I embrace simple consequential analysis as a basis for policy
>So did Machiavelli.

To his credit.

>>I accept these features because simple consequential analysis seems
>>our best chance for creating broad intellectual consensus on policy
>If by an appeal to their material advantage we can persuade the less
>principled to support freedom, that's better than nothing, I suppose.

There are lots more simple consequences than "material advantage." There's having friends, enjoying conversations, liking music, traveling to interesting places, etc.

>>People do form self-serving beliefs about the details of
>>which particular situations lead to which simple consequences. But
>>evidence slowly erodes these views, and I see much less prospect for
>>erosion of disagreements about what axioms to accept or what unusual
>>consequences to include in analyses.
>IOW you prefer the _status quo_ of opportunistic power struggles to a
>principled discussion of the ethical foundations of a good society.

Again, power struggles *are* "principled." And there is no real alternative to participating in them -- "ethical" discussions are just one of many ways to play the power struggle game.

Robin Hanson   
RWJF Health Policy Scholar             FAX: 510-643-8614 
140 Warren Hall, UC Berkeley, CA 94720-7360 510-643-1884