Having considered the Coase Thereom a bit more, I think I can phrase the principle being described better than even Coase did. I’ll call this the Vandivier-Coase Thereom:
- When transaction costs are sufficiently small relative to total surplus, an efficient and invariant outcome will prevail, and as transaction costs approach zero the result will become even more efficient.
Note that my definition does not even require property rights be considered at all. Classically, the Coase Thereom requires zero or negligible transaction costs with well defined property rights. My definition doesn’t require property rights because I believe property rights can be delineated de facto, whether or not they are clearly laid out or even known. What is a property right? Check out this definition from Wikipedia:
- the right to use the good
- the right to earn income from the good
- the right to transfer the good to others
- the right to enforcement of property rights
In my view, all of these can exist de facto. In other words, “Might makes right.” You have the right to use the good, for example, not because it is recognized, but merely because you can use the good. Given this conception, there is once again no government necessary. Moreover, even if government existed, it wouldn’t matter what the government says if the government did not possess the power to enforce those rights. Therefore, even when government justifies or protects rights, it does so using a de facto power.