What is the big difference between Coase and the Austrians in regards to property rights. On the surface, they seem compatible. What are the difference in nuance?
It’s been a while since I studied this, but from what I remember Coase argues that in a property dispute it does not matter who had the initial property rights. I think he used radio frequencies, as well as a farmer/railway example. If two radio station are using the same frequency and interfering with each other he argues that whichever radio station is more profitable will make a deal with the other and pay them not to use that frequency, thus a advantageous situation for both parties.
I think this mainly differs from the Austrian school becuase property rights are derived from homesteading. In other words, who ever established the initial right and use of the radio frequency through homesteading has a case against the intruder. So I suppose to sumamrize, Coase favors the wealthier party in any property dispute and disregards who established the right to the property first.
To double summarize: Coase Theorum conflicts with the non-aggression principle.
Coase Theorem only applies to cases where property rights are well defined and where transaction costs are zero (and then it only says the outcome will be efficient not that it will conform to justice). It doesn’t conflict with the NAP because it isn’t normative, but positive. Homesteading or the way in which property came into ownership is irrelevant to the truth value of the theorem.
Well, then I suppose the problem is favoring efficiency over justice. I may have botched my argument, but for the sake of trying to answer the OP here is Block on Coase. I forgot about psychic value, but you will see he argues that Coase is against NAP in the end.
Whatever is efficient is just. - some famous utilitarian.
Agreed. The Problem of Social Cost doesn’t ask (or answer) “what is the nature of property rights?”.