Ronald H. Coase, 102, whose insights about why companies work and when government regulation is unnecessary earned him a Nobel Memorial Prize in Economic Science in 1991, died Monday in Chicago.
By his own description, Coase was an “accidental” economist who spent most of his career teaching at the University of Chicago Law School and not its economics department. Yet he is best known for two papers that are counted among the most influential in the modern history of the science.
In one, “The Nature of the Firm,” which was largely developed while he was still an undergraduate and published in 1937, Coase revolutionized economists’ understanding of why people create companies and what determines their size and scope.
He introduced the concept of transaction costs — the costs each party incurs in the course of buying or selling things — and showed that companies made economic sense when they were able to reduce or eliminate them by performing some functions in-house rather than dealing in the marketplace.
The ideas laid out in the paper explain why, in the first half of the 20th century, companies tended to become more vertically integrated (for example, Ford Motor building its own steel mills and buying its own rubber plantations rather than relying on suppliers), and why, more recently, companies have tended to do the opposite, aggressively outsourcing even basic functions like paying their employees.
In the second of his groundbreaking papers, “The Problem of Social Cost,” published in 1960, Coase challenged the idea that the only way to restrain people and companies from behaving in harmful ways was through government intervention. He argued that if there were no transaction costs, the affected parties could negotiate and settle conflicts privately to their mutual benefit, and that fostering such settlements might make more economic sense than pre-empting them with regulations.
The paper made the idea of property rights fundamental to understanding the role of regulation in the economy.
Ronald Harry Coase was born Dec. 29, 1910, in Willesden, England. Though he spent more than 50 years living and working in the United States, he retained his English accent and habits all his life.
Judith Daniels, 74, the founding editor-in-chief of Savvy, the first glossy magazine aimed at executive women, died Sunday at her home in Union, Maine.
The cause was stomach cancer.
For generations, women’s magazines had focused on home, hearth and hairstyles. Daniels’ brainchild was the first to target the emerging class of high-level, high-earning professional women. Beginning its life in 1977 as an insert in New York magazine, Savvy made its debut as a stand-alone publication with the January 1980 issue.
“Savvy will not tell you how to be a good secretary,” one of its early promotional fliers read. “Savvy will tell you how to hire a good secretary — and how to fire.”
The magazine’s articles ranged from current affairs to investments to advice on buying a fur coat. “I wanted a guilt-reducing publication,” Daniels told the Chicago Tribune in 1981. “Other magazines, like Cosmo, were always saying it’s OK to be excited about men. What I wanted to do was to release women and say it’s OK to be excited about your work.”
A former managing editor of New York magazine and the Village Voice, Daniels remained with Savvy until 1982, when she joined Time Inc. as a roving senior editor; she was later named managing editor of Life magazine. Savvy — by then renamed Savvy Woman — ceased publication in 1991, amid declining advertising revenue throughout the industry.
Judy Rae Glassman was born on March 19, 1939, in Cambridge, Mass. As an adult she began calling herself Judith, which she felt had more gravitas.
She earned a bachelor’s degree in English from Smith College in 1960 and afterward — in a typical trajectory for young women of the day — took secretarial training. Her first job in the world of letters was as a secretary with the book publisher Farrar, Straus & Giroux in New York.
Daniels joined New York magazine in 1968 as a $100-a-week photo researcher, rising to become managing editor. At New York, and later at the Voice, where she was named managing editor in 1974, she kept a file of clippings about women and work, a subject that had long fascinated her.
“I thought, ‘Well, maybe there should be a magazine like that,’” she said in 1980.
New York Times