In The Eternal Inferno, Fiends Torment Ronald Coase With The Fate Of His Ideas – The Yorkshire Ranter

19 bookmarks. First posted by robertcottrell 7 weeks ago.

did you see this recent pöst

— 𝕄𝕚𝕜𝕖 𝕃𝕪𝕟𝕔𝕙 (@bombinans) March 20, 2018
12 days ago by mikelynch
I imagine this as a chapter in a book called "How the Modern World Works", which would make you go, "Ohhh, yes, that explains that mess."
ronaldcoase  business 
13 days ago by philgyford
One very large, and especially purist, example of this was British railway privatisation. This did not just transfer a firm from the public into the private sector. Much more importantly, it transformed one large firm into a large number of smaller ones that interacted on a contractual basis. This system further interacted on a similar basis with the government.

When a management problem arose – for example, a train was late – a claim would be raised by one actor on another. For example, the Department for Transport might invoke a contractual penalty because the trains were late. The train-operating company would immediately claim against the infrastructure operator, which might counterclaim. Because the train leasing company might have guaranteed a certain on-time service level under a total outsourcing arrangement with the operating company, it too would then try to claim against anyone else it could think of.

This had important consequences. First of all, the claims-management process was itself costly. This is Coase’s basic argument. Second, because the prices of services exchanged between the component firms were often determined after the event, through the claims process, they were no longer informative about the marginal costs involved, but rather about the contract-management process. As a result, costs overall rose substantially although nobody could put their finger on who was coining it. Thirdly, it simply became enormously complex. A contract, after all, is executed between parties. The number of pairwise interactions within an organisation rapidly becomes very large – in fact, it increases by the factorial of the size of the organisation.
infrastructure  privatization  business  economics  tairg 
13 days ago by debcha
Re last rt:

— together we can beat blephartis (@JoeTheDough) March 10, 2018
IFTTT  Twitter 
14 days ago by joethedough
What have US healthcare, British railways, the shipwreck of Carillion plc, and the F-35 got in common?
from twitter
5 weeks ago by alexhern
The perniciously flawed concept of government outsourcing (via )
from twitter_favs
7 weeks ago by mattedgar
"In many ways, we’ve lived through a giant experiment in proving Ronald Coase wrong, which has now failed." -- On privatization [as state transformation].
via:xmarquez  econ:theory  soc:organizations 
7 weeks ago by phnk
via The Yorkshire Ranter
IFTTT  Feedly 
7 weeks ago by xmarquez