Does the institution of slavery refute the Coase Theorem?

We think it does … because slaves by definition are unable to bargain for their freedom. Our colleague and good friend Glen Whitman says it does not … read his reasons and our objections to his argument in the comments section to this fascinating blog post on “Haitian zombies and slave economics.” (Recall that the Coase Theorem predicts that an economic asset will be allocated to its most valuable use regardless of who initially owns that asset, provided that market frictions or “transaction costs” are low — i.e. provided that the owner of the asset is able to bargain with potential buyers who want the asset.) Who is right? 

An efficient auction?

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
This entry was posted in Economics, Law, Zombies and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s