An interesting fact is that (no doubt with a great deal of effort) we 
can train our senses to interpret the Chaplin mask as it actually is and 
not in terms of previous biases based on our historical experiences with 
faces. This is also true, it seems, of our interpretation of abstract 
concepts such as those used in economics.

With regard to the pollution permit problem, my argument was that the 
reason Coase had so much trouble persuading the Chicagoans of the 
correctness of his approach to external effects (an approach based on 
his definition of a resource as a legal right to control others' 
actions) is that these economists had "pre-classified" the external 
effects problem as a problem in price theory. Their propensity to 
pre-classify in this way presumably reflected their experiences as both 
students, teachers, and researchers in economics.

Coase, studying practical problems of business and not general 
equilibrium models with quantifiable variables, seems to have had weaker 
experiences with price theory. One assumes that Demsetz was similar.

One might reasonably ask how much damage we do to clear thinking in 
economics by introducing economics with a model of the prices of 
homogeneous goods in a spaceless environment.where time is, at best, 
artificial and uncertainty is nonexistent.

Could Steve have had this in the back of his mind when he posted the 
link to the optical illusion video?


Pat Gunning