Social cost was in many ways a reaction to pugo. The so called pagovian tax, which is that when you have a negative externality, you should impose a tax on the apparent perpetrator. And i think what cost would have said, and maybe he said it, ah, and think probably mentioned on this programme, is that that's one way to solve it. It may not be the best way. But cose understood that the real world has complexities in it that most economists overlook when they do their theories. So kind of acted ligt o, sir. That might be cheaper than foregoing an output, which the tax will produce. Cos said basically, look,
Don Boudreaux of George Mason University and Cafe Hayek talks with EconTalk host Russ Roberts about the intellectual legacy of Ronald Coase. The conversation centers on Coase's four most important academic articles. Most of the discussion is on two of those articles, "The Nature of the Firm," which continues to influence how economists think of firms and transaction costs, and "The Problem of Social Cost," Coase's pathbreaking work on externalities.