coase theorem and austrian economics and association

fakename — Mon, 06 Sep 2010 03:42:40 GMT

Doesn't AE have a way to describe coase theoretic outcomes? I think that there is an analogue but I just don't know how to express it -somehow I think the CT is just a type of the general pattern that people tend to create things for their own purposes. So for general economic phenomena when you need something
(but there's an obstacle to getting it) you allocate more money to buy it and that can be an incentive to increase supply. Similarly, in CT, when two industries are at cross-purposes (like when one industry receives an externality from another) they can reconcile through internalizing the costs (assuming sufficiently low transaction costs).

I also wanted to explore this idea from a political/social angle. If the above theorem is true, then practically it amounts to saying that everything that share's similar purposes will tend to associate. But there are somethings that are similar that aren't at all going to associate -For instance a CIA agent who knows a terrorist attack is coming and a libertarian who knows a terrorist attack is coming. Even though both should be working together since they share a common goal (to predict), yet they probably won't be allies.

Economics Questions

coase theorem and austrian economics and association