So how do Nobel prize winning economist Ronald Coase and John Fountain come to be mentioned in the same breath? Believe it or not in a symposium at the University of Chicago in 2009 to honour Ronald Coase.
The conference was titled Markets, Firms and Property Rights: A Celebration of the Research of Ronald Coase, held at the University of Chicago Law School Friday, December 4 to Saturday, December 5, 2009.
“This Conference brings together a group of scholars to honor the life and research of Ronald Coase. 2009 marks the 50th anniversary of the publication of Coase’s seminal paper on the Federal Communications Commission. 2010 marks the 50th anniversary of the publication of his paper on “The Problem of Social Cost,” and his 100th birthday.
The presentations on this occasion cover specific topics on which Coase’s work has exerted profound influence, including such areas as telecommunications policy, airline regulation and development, environmental economics, economic development, organization of the firm, and general discussions of the questions of transactions costs and social rationality to which he has contributed so much.”
Every session of the conference is up and available on the web for free downloading and viewing (link here) – it was a great conference celebrating a great thinker …..with all the big names in Economics there to celebrate Coase and his ideas.
Big names you say? The list of sponsoring institutions reads as a who’s who of modern think tank research institutes: the John M. Olin Program in Law and Economics at the University of Chicago Law School, the Stanford Institute for Economic Policy Research, the Information Economy Project at George Mason University, the Ewing Marion Kauffman Foundation, the Milton Friedman Institute for Research in Economics, the George J. Stigler Center for the Study of the Economy and the State, and the China Center for Economic Research. Ditto the list of participants – the who’s who in modern institutional economics and in applied economic theory.
In the session moderated by Sam Peltzman , Charles Jackson from George Mason gave a 20 minute presentation on how Coase’s work influenced the development of a market like system of property rights in the allocation of electromagnetic spectrum in New Zealand.
And in his tribute to how Coase’s work materially influenced things here in New Zealand it turns out that I played an instrumental role – in Jackson’s view. (You can read all about the gory details of radio spectrum reform here at MED)
Back in 1988 the then Department of Trade and Industry (DTI) asked me to provide them with some general back ground information on the possibility for efficient allocation of the electromagnetic spectrum *.It came out as a DTI report “The Economics of Radio Spectrum Management : a Survey of the Literature”. Jackson refers to it as “The Fountain Report” here in the following video clip.
U of Chicago…..2009:
(I like the part where Jackson says:
…. I think any intelligent reader who read his [Fountain’s] report would see that there was a strong theoretical argument that property rights in spectrum were doable and would serve efficiency….
So….in front of all these superb economists….John Fountain, “moi” , gets a shining citation …well more than a citation!! Then, a little later on he asks the question: How did Coase actually influence what happened in NZ? Remember Coase himself had no direct connection to NZ whatsoever. Here is what Jackson says:
Again, let me quote!: I don’t know the whole history* so I can’t tell you directly …..but I think the mere fact that New Zealand funded the Fountain report …..and funded the NERA report….was a consequence of Coase’s ’59 paper and the discussion it stimulated. …….The Fountain report reflected Coase’s papers …and spent significant time discussing them. ……everybody on our project had read the ( Fountain ) report …..
* see my comment end of this post on the background history that Jackson alludes to
So here it is , 22 years later, and well Ronald Coase and I , through the academic research network, are best buddies! Six degrees of separation – inter temporally conceived! And my name and practical applied academic research gets a mention at a prestigious Conference at the Law School of the prestigious University of Chicago to honor and celebrate a prestigious Nobel Prize winner’s life work and influence! Now THAT’s what I call a citation!!
It makes me feel good to be a marginal contributor to an amazing chain of research transmission and implementation that “is” the academic culture (too bad my current academic Employer(s) put zero value on these sorts of long term academic investments!) !
Disclaimer on funding. By the way. I got paid $5000 for that DTI report . Not bad you say? Well, I heard via the grapevine that NERA consultants got $500,000+ for their report ! And, what’s worse – and this really betrays how dumb smart economists can be! – I invested a huge amount of time trying to understand both the engineering literature on radio spectrum modulation, switching and transmission technologies and characteristics as well as reviewing the available literature economics . My hourly “consulting rate” was probably less than $5 an hour!!
For those of you that know me you’ll know I am NOT a speedy real time- efficient worker (like say Glenn or Seamus or Eric ). I am borne with the unfortunate, or fortunate as the case may be, intellectual curse of feeling a personal necessity to track down carefully EVERY little rabbit hole that seems even remotely connected to the problem (a little like Lisa!). At that time there were two major works (rabbit holes) on an economic approach to radio spectrum management ,Levin and DeVany, – and I read and reread them both – so many times, as well as Coase’s work and a heap of other material by the likes of Alchian and Demsetz on property rights and transacting under uncertainty, incomplete contracts, and externalities) .
- Levin, H J The Invisible Resource-Use and Regulation of the Radio Spectrum Johns Hopkins University Press, Baltimore (1971).
- DeVany, Arthur, Ros Eckert, Charles Meyers, Donald O’Hara, and Richard Scott, 1969,“A Property System for Market Allocation of the Electromagnetic Spectrum: A Legal-Economic-Engineering Study,” 21 Stanford Law Review 1499-1561 (March).
A personal reflection on how I got into radio spectrum research in the first place
When I arrived in NZ in 1976 there were NO (ie zero) legal FM radio stations (I came from the San Franciso Bay area that had a large number of FM radio stations serving all kinds of niche markets ). Well, there was one illegal FM radio station , Radio Hauraki , a “pirate FM” station that broadcast from a boat parked just outside the 12 mile international boundary limit!
And then in the early 80’s a Royal Commission had to be held to legitimize the State monopoly on radio and television Broadcasting! (talk about entry barriers!) NZ Treasury knew of some work I had been doing with a student (Catherine Simes) on a previous Government report on FM radio Broadcasting – written by guess who (the incumbent monopolist broadcaster) – saying that there was simply no room in the spectrum for more FM radio stations. This was complete Bullgeschichte (BS) written up by someone in the then state monopoly Broadcasting Corporation..
I spent a summer with Catherine trolling through every submission to that early report – 2 large boxes of original paper submissions, sent down here by DTI by courier . My how times change – there was no internet in those days and Govt departments like DTI were very academically friendly and trusting . In those thousands of pages we found one radio engineer who put up his hand and said “NO – this is all monopoly protectionist crap” …. and more importantly why . The radio frequency spectrum spacing standards that were “necessary” according to the Broadcasting Corporation were on the basis of el cheapo 1940’s style radio receivers and archaic black and white television sets that had poor capability for filtering out spillovers form any source – including electric ovens! . He pointed us – (well not just us, anyone who cared to look – but we were the only ones who looked) – to some US research by the Federal Communications Commission (FCC) and others on improving competition in FM radio broadcasting. These papers (none published academically by the way) explained that and why technically in the 89-108 MHZ band reserved for FM there was no reason in principle why one couldn’t have 40+ FM radio stations in those areas, and more with a small investment at the source inn directional antennas many more.
With the feasibility set now opened up to us we used this research to turn the microsopic eye to every sham argument put up the incumbent monopolist supplier. Treasury liked this and asked me to contribute to their submission to the Royal Commission on broadcasting – you have to laugh! A Royal Commission is required to get into an industry! What an entry barrier!! I talked with the DTI radio spectrum guys while I was up there working with Treasury ….and so the story went. So why didn’t I become the guru of NZ telecomms and spectrum regulations? as a famous guy once said “I could’a been a contender” . Well a little (big) problem with my spine collapsing and a couple of years chronic pain and….by the time I got back on track, early ’92, well other things took over!! Thanks to Paul Walker for bringing Jackson’s presentation in the Coase conference to my attention.