Coase's Parable

40 Pages Posted: 16 Sep 2022 Last revised: 25 Sep 2022

See all articles by F. E. Guerra-Pujol

F. E. Guerra-Pujol

Pontifical Catholic University of Puerto Rico

Date Written: September 5, 2022

Abstract

Some stories have heroes and villains. Others involve a voyage, a quest, or a monster to be defeated. The law is no exception. Broadly speaking, most legal stories are generally about identifying wrongdoers and vindicating the rights of victims, but what if harms are “reciprocal” or jointly-caused? In other words, what if victims are just as responsible as wrongdoers for their plight? It was Ronald Coase who first proposed this novel counter-narrative to the standard victim-wrongdoer narrative in law. Researching and writing in the late 1950s and early 1960s, Professor Coase--an obscure, middle-aged English economist at the time--plucked a number of leading cases from the English Law Reports and other sources. Coase then used these old cases to create a compelling but controversial legal counter-narrative: compelling because Coase’s parable forever changed the way many economists, lawyers, and judges see the law; controversial because it was Coase who first conceived of harms as a “reciprocal” problem. Simply put, whenever one party accuses another party of harming them, it is almost always the case that both parties are responsible for the harm--that is the essence of Coase’s novel and unorthodox parable.

Keywords: Ronald Coase, legal narratives, reciprocal harms

JEL Classification: A12, B15, B31, K13

Suggested Citation

Guerra-Pujol, F. E., Coase's Parable (September 5, 2022). Mercer Law Review Forthcoming, Available at SSRN: https://ssrn.com/abstract=4210659 or http://dx.doi.org/10.2139/ssrn.4210659

F. E. Guerra-Pujol (Contact Author)

Pontifical Catholic University of Puerto Rico ( email )

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