The chapter delves into a 1937 paper on firms, examining their existence in capitalist markets and their deviation from decentralized market transactions. It discusses the importance of understanding firm hierarchy, decision-making structures, and the influence of transaction costs on utilizing command and control. The conversation also critiques the dominance of game theory in business education and emphasizes the need for a deeper study of how firms operate, especially for future executives and managers.
Nobel Laureate Ronald Coase of the University of Chicago talks with EconTalk host Russ Roberts about his career, the current state of economics, and the Chinese economy. Coase, born in 1910, reflects on his youth, his two great papers, "The Nature of the Firm" and "The Problem of Social Cost". At the end of conversation he discusses his new book on China, How China Became Capitalist (co-authored with Ning Wang), and the future of the Chinese and world economies.