i mean, both claims are accurate, no? without air resistance they'd land the same way, whether you want to characterize that as just as gently or just as violently. i agree violently would be the more informative characterization! but in terms of "same" degree of, both are accurate? 1/

in this analogy, the state stands in for the parachute. 2/

in a transaction-cost-free world (as @t0nyyates.bsky.social accurately points out, with transaction costs interpreted broadly, including the costs of overcoming information asymmetries, enforcement problems, etc) you'd have no use of a parachute, it could only get in the way. 3/

I agree for the analogy to work I have to posit the Coase stand-in as making the point in a particularly unhelpful way (just as gentle rather than just as violent), which is maybe a bit mean… 4/

but if your point was to emphasize that AIR RESISTANCE MATTERS, you might make the claim that way, expecting your audience to understand the irony in it. /fin

To kind of summarize Coase's tragic arc, he was made famous for an idealized account under which negotiations among private actors *would* lead to outcomes respecting social costs and benefits, but to Coase the whole point was that the idealization was unrealistic. 1/

The "transaction costs" you have to assume away are literally what Coase made his career as describing as fully the basis of real-world institutions. 2/

The very shape of the social world, the fact that it does not reduce to atoms transacting horizontally in a market, is to Coase down to transaction costs. 3/

Transaction costs may sound like constraints, but they become the bricks by which all the institutions of society are formed, just like bones constrain the blubber our bodies otherwise would be, but also give us their functional forms. 4/

An ancient trick of neoliberals, slyly made into a kind of philosophy of science by Milton Friedman, is to find ways of suggesting the unreality of assumptions don't matter, you can treat the model as evidence its assumptions are approximately true if the model seems to work in practice. 5/

The neoliberals basically inverted Coase's whole framework this way, suggesting it was approximately enough true that transaction costs don't matter, so Coase's suggestion social optimality could be achieved by markets alone under unrealistic circumstances was actually realistic. 6/

It's like a physicist pointing out that if it weren't for air resistance, a person without a parachute would land just as gently as a person with, then a group of "engineers" whipping their arms around and saying, "there's very little resistance, screw the chute, go ahead and jump!" 7/

Coase was made a kind of ironic celebrity on the back of this misuse of his work, which has only been dialed back since 2008 chastened the neoliberals. But as you can see from the piece you quoted, the idea we can eliminate air resistance and so jump without chutes is still with us. /fin

Poor Coase. If you haven't seen this by @xntl.info it's a good read: mchugh-russell.ca/2018/06/07/o... 1/

I'm sure that essay is in earnest. The free-market technoutopians are always earnest. But they are also also participating in Galbraith's "one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." 2/

They let goods like "freedom" and "dynamic efficiency" become a euphemism for their selfishness. /fin

Anyone else think the nuclear announcement is a concession that Xi requested? 1/

The timing is... suspicious. China is the nuclear laggard of the three apocalyptopowers. It wants to catch up, and has the technical and industrial means to do so, but probably needs to test its new tech. But it's invested a lot in portraying itself as good guy to America's putative evil empire. 2/

The US' negotiating position vis China is objectively bad, but people can find creative… sweeteners. /fin