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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Oct. 11, 2013/ 7 Mar-Cheshvan, 5774

The beauty of simplicity

By Paul Greenberg




http://www.JewishWorldReview.com | How simple a great idea can be. Once a great thinker explains it simply. A thinker like Ronald Coase, the economist, teacher and sage who has just died at the remarkable age of 102.

The man could explain how and why today's American economy is so different in structure from the one I grew up with from the 1950s well into the 1970s, which was dominated by Fortune 500 companies and household names like Ford, GM, GE, DuPont, and Boeing.

Why were all those behemoths created? Ronald Coase explained it simply in his classic paper, "The Nature of the Firm," which may be the best known and most frequently cited treatise on economics since Adam Smith was writing.

Those corporations were formed, to use Coase's phrase, to save "transaction costs." Or how much it costs -- in money, time and general hassle -- to conduct a business. Or create an industry. Or just turn out a product. Especially one with a lot of moving parts.

Suppose a Henry Ford or Thomas Edison or Andrew Carnegie -- name your own favorite captain of industry -- had had to hire somebody different to provide every part of a Model T or a steel empire. It's so much more efficient to combine all those operations in one company. It saves, yes, transaction costs. That's the nature of the beast, or rather "The Nature of the Firm." So these companies formed -- and grew and grew.

Visiting an insurance company's headquarters in the 1950s, or a newspaper's for that matter, was to be greeted by a sea of desks, complete with one each clerical worker -- little cogs in the great corporate machine.

It was assumed that many of us would spend a lifetime with one company, rising (or falling) through the ranks. It was the age of the Company Man, and there was a distinct IBM man as surely as there was a Coca-Cola or New York Times or J. Walter Thompson man. Or (tailored) woman.

"Mad Men's" Don Draper of Sterling Cooper Draper Pryce didn't come from nowhere but out of that buttoned-down era and world. The world of "The Man in the Gray Flannel Suit" and "The Lonely Crowd," to recall a couple of popular book titles at the time.



What ever happened to all those corporate giants? Many are still around, if diminished in size and influence, but a great sea change has occurred. By the 1990s, those Fortune 500 companies, pillars of the American economy for decades, had cast off 3 million jobs over a decade of downsizing. Change is stress, and that was a big change, not just in the American economy but the American psyche.

A later book Ronald Coase helped write, "The Dynamic American Firm," would offer some needed perspective on that big change:

"Like 'de-industrialization,' the rapid rise in business services and self-employment over the past several years has set alarm bells ringing in enlightened centers of thought. 'In the future,' one displaced executive told Time magazine, 'we are going to be moving from job to job in the same way that migrant workers move from crop to crop.' Perhaps. But unlike the migrant worker, today's corporate refugee, equipped with a personal computer, printer, copier and fax machine -- all purchased for about $7,000 -- can earn a good living toiling in the comfort of his, or her, home. That is so because the information revolution has greatly reduced transaction costs -- for big firms and small contractors alike."

Ronald Coase's thoughts on American economic organization, blessedly theory-free because they were based on studies of how American businesses actually make decisions, were almost as influential as his 1960 essay on "The Problem of Social Cost," which has been called the most cited law-review article in history. It's an incisive look at how inefficient government regulation, taxation, subsidization and litigation can be when compared to negotiation between competing interests.

His now well-known example: The case of the farmer whose land is being damaged by emissions from passing trains. Coase's solution: not a penalty or fine or still another lawsuit or 10,000-word bill in Congress, but a simple deal, one that benefits all concerned. Let the farmer agree not to cultivate that vulnerable part of his land in return for a payment from the railroad to cover whatever profit the farmer would forgo by letting it lie fallow. Talk about reducing transaction costs -- for the farmer, the railroad, and the tax-paying public. A good deal all around except maybe for the lawyers, who are definitely a surplus crop these days.

Naturally enough, ideas like Ronald Coase's -- great ideas simply explained -- deeply offended his colleagues in academe. He was denied promotion at the University of Virginia till he left for a school that could appreciate him and great ideas in general. (The University of Chicago, of course.) At least since Jonathan Swift's time, it's been easy enough to spot a scholar with talent or imagination, or just a capacity for original thought: "When a true genius appears, you can know him by this sign: that all the dunces are in a confederacy against him."

Ronald Coase understood the beauty of simplicity, which seems to elude the kind of "planners" who strew obstacles here, there and everywhere. Like all the stumbling blocks they've put in the way of charter schools, the most promising innovation in public education in years. Or consider Obamacare, which is anything but simple. One more part of that gigantic mechanism seems to crash, stall or somehow fail every day.

When a mathematician cuts through all the complexities in an equation, his solution may be described as elegant. In that sense, Ronald Coase was an elegant thinker.

According to the citation when he was awarded his Nobel in 1991, "Coase may be said to have identified a new set of 'elementary particles' in the economic system." He himself would only smile at such a claim. "I've never done anything that wasn't obvious," he once said. Maybe so -- but it wasn't obvious until he pointed it out.

Paul Greenberg Archives

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JWR contributor Paul Greenberg, editorial page editor of the Arkansas Democrat-Gazette, has won the Pulitzer Prize for editorial writing. Send your comments by clicking here.

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