I tend to regard the Coase theorem as a stepping stone on the

Hear now the voice of Ronald Coase, a sage of the modern age, who spoke words that shine with quiet wisdom: “I tend to regard the Coase theorem as a stepping stone on the way to an analysis of an economy with positive transaction costs.” In this phrase lies more than dry economics; it is a vision of progress, of humility before complexity, and of truth revealed step by step. Like the ancients who built their temples stone upon stone, Coase reminds us that even the most powerful ideas are not ends in themselves, but stepping stones toward deeper understanding.

The Coase theorem, in its simplicity, declares that if transaction costs are absent—if bargaining were free and perfect—then resources would always flow to their most efficient use, regardless of who holds them first. It is a vision of order, as if the invisible hand of reason itself were enough to guide human affairs. Yet Coase himself, with clarity rare among thinkers, declared that this vision is but a path, not the destination. For in the real world, where every bargain has a cost, where lawyers and delays and disputes consume time and treasure, the pure theorem falters. Thus, the master turned his eyes not to a dream, but to reality: the study of economies as they are, heavy with positive transaction costs.

This is wisdom: to see that the truth of life is never in perfection, but in imperfection. The theorem is like the ideal form described by Plato—beautiful, but beyond reach. What matters is not worship of the ideal, but the courage to descend into the marketplace, where men haggle, courts judge, and contracts are broken. There, amid the noise and dust, lies the true labor of understanding how societies organize, how institutions rise, and how order emerges from friction.

Consider the tale of the ancient Romans, who once believed their laws alone could secure justice. But as their empire grew vast, they saw that the costs of enforcing every decree weighed heavily upon the state. Endless litigation, corrupt officials, and distant provinces strained the system. It was not the purity of law that saved them, but the creation of institutions—praetors, governors, and markets—that balanced efficiency with reality. Their lesson was Coase’s lesson: that it is not enough to imagine a world without costs; we must reckon with the costs themselves.

Thus Coase teaches us humility in thought. He reminds us that even the most elegant theories must be tested against the rough edge of reality. The stepping stone is not to be despised; it is to be honored as a path that carries us further. But to remain standing upon it, refusing to move forward, is folly. The wise do not cling to the stone—they walk across it, and search for the next.

The lesson for our own lives is profound. Many of us dream of perfection—perfect justice, perfect peace, perfect efficiency. But we forget that life is lived not in ideals, but in the weight of real costs: the cost of time, of effort, of sacrifice. To live wisely is to acknowledge these transaction costs in our own existence, and to build institutions, habits, and virtues that allow us to overcome them. Just as societies craft laws and customs to reduce the friction of human exchange, so must each soul craft discipline and resilience to overcome the frictions of living.

Practical actions rise from this teaching: do not be blinded by ideals, but let them guide you as stars in the night sky. Accept that every choice carries cost, and measure those costs with care. When you build relationships, consider the patience and forgiveness they demand. When you pursue a goal, remember the obstacles that must be managed, not ignored. And when you hold to a theory or belief, ask yourself: is this a stepping stone, or the whole journey?

So let us honor Coase, not only for his theorem, but for his deeper vision. For he showed that the greatness of thought lies not in creating unbreakable idols, but in paving roads that lead us closer to truth. The Coase theorem, like all noble teachings, is a beginning, not an end—a flame that lights the path, but does not consume the journey. And thus the wise will walk on, stone by stone, until the whole bridge of understanding is built.