This blog is almost fed up of reading on Keynes vs. Friedman or Keynes vs. Hayek (can’t give it up though).
So for a change came across this nice piece by Richard Posner which discusses Coase with Keynes (Keynes remains common still).The paper was presented at a conference celebrating Prof. Coase’s 100th birthday in 2009.
On a first look, there is hardly anything similar between the two giants. Coase was a micro chap and Keynes mainly a macro chap:
I am sure that Ronald will not like my bracketing him with Keynes, as I am about to do. But if he is patient, he will hear me modify criticisms of his approach to economics that I made in an essay I wrote many years ago—sixteen to be exact—for the Journal of Economic Perspectives.
At first glance Keynes and Coase have nothing in common except that they were great English economists who loved ballet and attacked Pigou (a colleague of Keynes’s at Cambridge—the professor of economics, Keynes being merely a fellow)—but attacked different parts of Pigou: his theory of unemployment, in the case of Keynes, and his theory of externalities, in the case of Coase.That is not much to build a comparison on. Keynes was liberal, Coase is conservative. Keynes was a macroeconomist, Coase is a microeconomist. Keynes was upper class, a celebrity, a great public figure, a baron, a man of the world, a speculator, in his youth a homosexual (what we who study such things call an “opportunistic homosexual”), a brilliant writer on diverse subjects, a best seller—a man of Eton, Cambridge, the Apostles, Bloomsbury. Ronald is none of these things. And he is an expatriate— almost an American. Keynes didn’t much like Americans.
However, there are similarities in their approach to economics:
But these differences are superficial from the standpoint of how one approaches economics. Keynes and Coase shared an approach to economics that was once dominant, that fell into disfavor, but that is undergoing a revival as a result of the worldwide financial crash of September 2008, which took the economic profession by surprise and created profound doubts about the profession’s understanding of the economy.
What is this similarity?
- Both eschewed excessive usage of math/modelling in economics
- Both showed one can contribute to economics despite not being mathematicians
- Both liked the works of Frank Knight on uncertainty
Though, in terms of economics there is one big difference. One associates all Keynes works with government intervention etc. Coase opposed government regulation in all activities (more on the lines of Friedman).