 |
The Answer Is Transaction CostsAuthor: Michael Munger
"The real price of everything is the toil and trouble of acquiring it." -Adam Smith (WoN, Bk I, Chapter 5)In which the Knower of Important Things shows how transaction costs explain literally everything. Plus TWEJ, and answers to letters.If YOU have questions, submit them to our email at taitc.email@gmail.com There are two kinds of episodes here: 1. For the most part, episodes June-August are weekly, short (<20 mins), and address a few topics. 2. Episodes September-May are longer (1 hour), and monthly, with an interview with a guest.Finally, a quick note: This podcast is NOT for Stacy Hockett. He wanted you to know that..... Language: en-us Genres: News, Politics, Science, Social Sciences Contact email: Get it Feed URL: Get it iTunes ID: Get it |
Listen Now...
Are Transaction Costs Really Just Human Distance
Episode 21
Tuesday, 24 March, 2026
Send us Fan MailWe connect Adam Smith’s moral psychology to the modern idea of transaction costs and argue that the biggest frictions in markets start with the cost of understanding other people. We show how sympathy, propriety, self command, and reputation turn separate perspectives into workable cooperation and why justice is the real precondition for a stable commercial order. • why transaction costs always exist and why institutions matter when exchange is costly • a brief history of the term from Coase to an early use in Scitovsky • transaction costs as asymmetric information and the cost of social coordination • Smith’s epistemic distance and why sympathy requires imaginative effort • propriety as social calibration through the impartial spectator • self command as the price of being socially intelligible • commerce as a practical school for restraint, trust, and predictability • the prudent man as a model of conduct that reduces suspicion and monitoring • Buchanan’s moral community, moral order, and moral anarchy as lenses on social stability • why society can survive without beneficence but not without justice • a listener’s college admissions case where interviews act as a separating equilibrium and improve aid allocation Links:Liberty Fund eBook--Theory of Moral Sentiments (PAGES DO NOT MATCH UP WITH PRINT EDITION!)TAITC with Steve Medema, on Coase and Transaction CostsDan Klein and Russ Roberts on Theory of Moral SentimentsTibor Scitovsky, 1940, Economica paperGustavo Dudamel’s ‘the wealth of nations’ Melds Opera and Economics - Bloomberg If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz
