IP: RE: Response to David Reed

[David Farber <dave () farber net>]

> From: Chris Savage <chris.savage () crblaw com>
> To: "'farber () cis upenn edu'" <farber () cis upenn edu>
>
> > -----Original Message-----
> > From: David Farber [<mailto:dave () farber net>mailto:dave () farber net]
> > Sent: Thursday, August 30, 2001 5:03 PM
> > To: ip-sub-1 () majordomo pobox com
> > Subject: IP: Response to David Reed
> >
> >
> >
> > > From: "Gerry Faulhaber" <gerry-faulhaber () home com>
> > > To: <farber () cis upenn edu>
> > > Subject: Response to David Reed
> <snip>
>
> > Let me first remind your readers that in proposing a property
> > rights-market system, I am not claiming that it's perfect --
> > only that it is infinitely better than what we have now.
> > Paraphrasing Winston Churchill (in speaking of democracy), I
> > don't have to show it's perfect; just that it's better than
> > the available alternatives;-)
>
> Ronald Coase got the Nobel Prize in economics for showing (among other 
> things) that if you set up a clear system of property rights in 
> essentially any conflicting-use situation, the parties will use contracts 
> to allocate the resource in question to its most efficient use.  This is 
> the famed "Coase Theorem" announced in a 1960 article called "The Problem 
> of Social Cost."
>
> It turns out that Coase actually came upon his theorem -- or at least the 
> insight underlying it -- in a 1959 paper called "The Federal 
> Communications Commission," in which he explained why and how a market 
> allocation mechanism would work properly for spectrum.
>
> Markets are not perfect.  But they do what they do -- allocate scarce 
> resources among competing uses -- better than anything else we know 
> about.  It may be that there are technical considerations that require 
> some constraints on unfettered market allocations (I'm not an engineer; I 
> am a lawyer; and I'm sort of an economist, at least through undergraduate 
> training and lots of regulatory/antitrust practice).
>
> Since Coase is right as a general matter (anyone care to take him on?  No 
> one has done so successfully over the last 40 years), I'd put a very heavy 
> burden on someone claiming that some technical issues preclude the use of 
> markets to allocate spectrum (or any other scarce resource).
>
> Chris S.
>
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