The Answer Is Transaction Costs

Author: 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.....
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The Main Course was Transaction Costs: Milton's Dinner with Ronald
Tuesday, 18 August, 2026

Send us Fan MailWe tell the story of the Chicago dinner where Ronald Coase walks into a hostile room, and by the end everyone votes with him, led by Milton Friedman changing his mind in real time. Along the way, we unpack why transaction costs, not moral blame, often explain when law and institutions shape outcomes. • the Aaron Director dinner and the vote that flips • why Milton Friedman becomes a political symbol and lightning rod • critiques from the right and left on markets, shareholder value, trade, and Chile • Pigouvian externalities versus Coase’s reciprocal harm framing • the Coase theorem as a benchmark and why real transaction costs make institutions decisive • the “twedge” on comparative advantage and the “no free lunch” remix • listener question on tax horizons, regime uncertainty, and the permanent income hypothesis LINKS:Who's afraid of Milton Friedman (a video)Milton Friedman Lives (a blog post)Steve Medema, "What Happened on Blackstone Ave?"Mary Roach, BONKIf 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