Commons, Clark, and the Emerging Post-Coasian Law and Economics

Abstract

rapid growth of interest in the interrelation between law and economics, as manifested in journal articles and new programs in law schools, stems from the appearance of Ronald Coase's classic article, The Problem of Social Cost.' post-Coase appears to be a radical departure from the way economists have perceived many problems, and the post-Coasians have assisted in bolstering that impression.2 impression, however, is somewhat misleading. Over half a century ago, both John R. Commons and John M. Clark presented analyses that in many aspects bear a striking similarity to that of Coase. One would expect great differences between the free market oriented post-Coasians and the interventionist positions of Commons and Clark. To be sure, there are distinctions, some quite sharp, others subtle. Yet, there are many similarities which transcend the ideological differences. Both, for example, eschew what Harold Demsetz refers to as the nirvana approach and concern themselves instead with designing and evaluating imperfect institutions in an imperfect world.4 Clark makes the point this way: We must be on our guard .., against the tendency