The Principle of Institutional Direction : Coase's Regulatory Critique of Intervention

That Coase`s political convictions changed from an early socialism to a later neo-liberalism stands in apparent contrast to the theoretical consistency of his early (`The Nature of the Firm`) and later (`The Problem of Social Cost`) contributions to economics. Offering further evidence about his early views in particular, this paper takes a fresh look at Coase`s views on competition and antitrust to show that he consistently stressed the role of what we shall call the principle of `institutional direction`, and that this principle involves an important criticism of both neo-liberal and socialist views on regulation and state intervention