Given the brilliance of the discussion of Sidgwick and Coase, I am 
hesitant to ask a question that probably should have been answered 
for me in Econ 10, back in 1962-63, except James Tobin was priming 
the pump and I went on to become a political theorist.

I have a question about Coase, that has been intensified by the 
discussion -- especially the noise around the airport example.  My 
impression is that Coase, whom I have not read for about two decades, 
is absolutely brilliant in terms of giving a free market, 
individualistic, static explanation of how, in any circumstances 
where the costs of negotiation are low (zero?), the two parties will 
come up with the optimal solution for each of the parties.  That is 
fine, but has always struck me as very individualistic, with no 
attention to what I would think of as social interests.  Cannot, for 
instance, there be a social decision (a governmental dictate) that 
airplanes should be forced to try to reduce their noise, and 
therefore the government should introduce a bias into the 
negotiations, or a regulation that insists that noise be reduced 
(rather than individuals be moved -- and traditional communities be 
upset).  The society / the government might think, for instance, that 
restrictions on noise might lead to technological innovation about 
noise control that would produce benefits throughout the society, or 
that penalizing noise (rather than everyone on Long Island who lives 
under the JFK air lanes) is a socially more acceptable result.  Or, 
to go to the example I remember from Coase, why not make the 
railroads reduce their sparks -- perhaps also by giving them a 
corridor that farmers need to stay out of.

The main reason I mention this issues is that, when I first ran 
across Coase, it seemed to me that environmental issues were 
completely ignored by his article -- or, rather, they were left to 
the negotiations of the individual parties, neither of whom need care 
about the environment.  So I wanted the terms of the negotiations to 
be biased in favor of the environment.

I realize that I may have phrased the above in a relatively (!) 
ignorant way (especially I may be missing a dynamic where airlines 
and railroads may be encouraged to reduce their pollution because it 
may lessen how much they have to pay .... -- but don't lots of other 
people (who haven't yet been attacked by railroads or airlines) 
benefit if railroads and airlines are 'encouraged' to reduce 
pollution ....)

(I also do not remember at all how Coase brings into question issues 
of causality in his last few pages, but that may be just as well ....)

If the above is just a hopelessly ignorant question, I apologize.  It 
is a serious question to the extent that I remember convincing 
myself, twenty-five years ago, that Coase's narrow argument was 
brilliant but not helpful for environmental issues (or, perhaps, 
other 'social' concerns), unless the government added back 
regulations or a bias into the negotiations.

Peter G. Stillman