The principle of institutional direction: Coase's regulatory critique of intervention

That Coase's political convictions changed from an early socialism to a later neo-liberalism stands in apparent contrast to the theoretical consistency of his early ('The Nature of the Firm') and later ('The Problem of Social Cost') contributions to economics. Offering further evidence about his early views in particular, this paper takes a fresh look at Coase's views on competition and antitrust to show that he consistently stressed the role of what we shall call the principle of 'institutional direction', and that this principle involves an important criticism of both neo-liberal and socialist views on regulation and state intervention.