Theories aren’t for sissies.

A world without transaction costs is the economist’s version of a spherical cow. Coase’s goal in describing a transaction-cost-free world was to focus attention on the importance of transaction costs to economic policy. …Economic policy analysts on the political right began treating “zero transaction costs” not as a heroic simplifying assumption, but as a plausible policy goal.

via The Coase Theorem is widely cited in economics. Ronald Coase hated it.

Related: “A farmer has a problem with foxes eating his hens. So he asks his physicist friend to help find a solution. The physicist spends a day thinking, then replies ‘Well, I’ve found a solution, but it will only work for spherical chickens in a vacuum.’”

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