Coase's FCC Legacy

Accuracy in Academia | December 1, 2009 | Bethany Stotts

[bs9021]

Coase’s FCC Legacy

Bethany Stotts, December 1, 2009

At first blush the Federal Communications Commission (FCC)—which regulates “interstate and international communications” using “radio, television, wire” and “satellite”—doesn’t seem like much of a free-market mecca. But panelists at a recent conference held at George Mason University (GMU) argued that the FCC was significantly affected 50 years ago by Ronald H. Coase’s noted article, “The Federal Communications Commission.”

In this paper Coase argues that, with regard to broadcast radio, “the government and its historians based their regulatory views ‘on a misunderstanding of the nature of the problem’” and “goes on to present the argument for an efficient market based on property rights in radio spectrum,” according to the free market Ludwig von Mises Institute.

Coase “begins the process of unwinding what Adam Thierer and I call in an article we’ve just published in The American, ‘the progressive conceit’ … and as I reread the article as Adam and I were thinking about writing this article, I was frankly surprised to see how much of the seeds of what became the law and economics counterthesis to the progressive movement, how many of the seeds in those ideas were present in this 1959 article…” said Dr. Jeffrey A. Eisenach, an adjunct professor at GMU and Chairman of Empiris, a D.C.-based economics consulting firm. He argues that Coase unwound “a whole series of progressive assumptions at the core of which” were two notions:

a) that “markets often, usually, frequently, commonly fail” and,

b) “that when they do, government can, often, usually, generally, will make it better.”

Dr. Eisenach is the former President of the Progress & Freedom Foundation, which co-sponsored the event with the GMU Mercatus Center....