Knowledge Problem

Demsetz Discusses Coase’s Mistake on Pigou and Social Costs

Michael Giberson

Last summer, Harold Demsetz spoke at the Property and Environment Research Center on Ronald Coase’s big mistake in “The Problem of Social Cost.” PERC has just posted the video.

Harold Demsetz lecturing on Coase's mistake in "The Problem of Social Cost."

The article he is presenting is, “Fallacies in the Economic Doctrine of Externalities,” but I bet in the written article he doesn’t say, “what the hell is a court doing in this model?” (at least not in those words).

Demsetz notes that his title is a nod toward Frank Knight’s 1924 response to Pigou, “Some Fallacies in the Interpretation of Social Cost.”