Oedipus As A Tragic Hero - 1637 Words

The play Oedipus Tyrannus, written by Sophocles, is one of the greatest renowned Greek drama tragedies. Have you ever heard the saying if you do not know your past, then it can come back to haunt you? This theme is played upon heavily though out the story to where it also becomes somewhat about self-discovery along the way. The Greek philosopher, Aristotle, based some of his book Poetics on Oedipus. According to Aristotle the definition of a tragic hero is a character that due to the wrongs of their judgment leads them to their own demise. Oedipus’s downfall was brought about by his lack of knowledge, his quick impulsive and angering temperament, and arrogance. As revealed, Oedipus Tyrannus takes place in the Greek city of Thebes. As the†¦show more content†¦Oedipus believed that the oracle was talking about Polybus and Merope so he fled from them. This made the second time that the same prophecy had been told to the people it was about. All of them then took steps in trying to prevent it from their own understanding which in turn ended up being their own ignorance and destruction. King Laius, Queen Jocasta, and Oedipus’s attempt to escape their unfortunate fate leads them into destiny of what they all three of them dreaded the most. Furthermore, Oedipus’s lack of knowledge was shown, when Oedipus sent for the prophet Teiresias. The prophet knew who he was and did not want to disclose that to him for the sorrow it will bring. Instead of heeding the prophet’s warning, he pressed him for a prophecy he had actually already heard. Oedipus was very quick witted, which is how he solved the riddle from the Sphinx, however, when Teiresias said the following riddle, â€Å"You have your eyes but see not where you are in sin, nor where you live, nor whom you live with. Do you know who your parents are? Unknowing you are an enemy to kith and kin in death, beneath the earth, and in this life †, and even outright admitted that Oedipus was the murderer he was seeking, he still did not believe him them. But due to not knowing who he was entirely, he was able to suppress it and chose to remain unknowledgeable. It was as if he was going with the saying that ignorance is bliss; which for him, at theShow MoreRel atedOedipus As A Tragic Hero1506 Words   |  7 PagesA true hero does not merely wear a cape, but this individual possesses admirable characteristics. A hero inspires the people around him and he is honorable. Heroes influential individuals from fairytale stories and myths of a real-life hero. Yet, none of these influential people are perfect. The tragic hero is clearly defined by Aristotle as being a person of admirable character, yet completely human with noticeable flaws. Moreover, this individual is not exempt from suffering. In Sophocles’ tragicRead MoreOedipus-a Tragic Hero706 Words   |  3 PagesRunning head: Oedipus-A Tragic Hero Research Paper ENGL 102: Literature and Composition) Fall 2015 Melinda Meeds L26683811 APA Outline Thesis: In Sophocles’ â€Å"Oedipus†, Oedipus is exemplified as a tragic hero according to Aristotle’s definition because his story appeals to the reader’s humanity in the way he maintains his strengths after inadvertently causing his own downfall. I. Oedipus A. The noble birth. B. Describe Oedipus’ character. II. Tragedy A. DescribeRead MoreOedipus the Tragic Hero1390 Words   |  6 PagesOedipus; The Tragic Hero In the Fourth Century BC, a famous philosopher named Aristotle wrote about the qualities that a tragic hero must possess. Ever since that time, there have been many examples of tragic heroes in literature. None of those characters, however, display the tragic hero traits quite as well as Oedipus, the main character from the play Oedipus Rex by Sophocles. Oedipus is, without a doubt, the absolute quintessence of a tragic hero. His example shines as clear as a sunny summerRead MoreIs Oedipus A Tragic Hero?1167 Words   |  5 Pages2014 Is Oedipus a tragic hero? Aristotle, Ancient Greek philosopher whom did a lot of philosophizing, he believed in a logical reality. Aristotle’s objective was to come up with a universal process of reasoning that would allow man to learn every imaginable thing about reality. The initial process involved describing objects based on their characteristics, states of being and actions. Aristotle once said A man doesn t become a hero until he can see the root of his own downfall†. Oedipus was a mythicalRead MoreOedipus, A Tragic Hero1648 Words   |  7 Pages Oedipus, a Tragic Hero Bob Livingston Liberty University â€Æ' Sophocles presented the world with Oedipus around 2500 years ago. Never-the-less, the story remains among the most riveting of all time. He was, in fact, a man that was driven by a very high internal moral standard. It was that internal moral standard that ultimately entwined him in a sequence of events and circumstances that placed him in the spousal relationship with his mother. Oedipus, in fact, can truly be regarded as a tragic heroRead MoreOedipus As A Tragic Hero1724 Words   |  7 Pagesstory of Oedipus, Oedipus is considered a â€Å"Tragic Hero† because of the tragic fate and effect that he had upon his life. My definition of a tragedy is a great loss that has a unhappy ending to which concluded me to state that Oedipus falls under that category. Throughout the book, Oedipus is leading himself to his own destruction when trying to find the killer of the late King Laios. So when a journal article I found published by The John Hopkins University Press stated that a â₠¬Å"tragic hero is a manRead MoreOedipus a Tragic Hero1516 Words   |  7 PagesOedipus A Tragic Hero English 102 Literature and Composition Summer B 2011 Terry Garofolo 22816762 APA Sophocles presented the world with Oedipus around 2500 years ago. Never-the-less, the story remains among the most riveting of all time. Unfortunately, today when we hear the mention of the name Oedipus we place negative connotations around it. Oedipus, after all, had an unnatural sexual relationship with his own mother! In actuality, however, this relationship emerged entirely innocentlyRead MoreOedipus As A Tragic Hero1094 Words   |  5 PagesIn the play Oedipus the King, Oedipus struggles to accept the truth and lets his temper over power him. He can be displayed as a tragic hero. His refusal to accept the truth led to Oedipus’ down fall. A tragic hero, as defined by Aristotle, â€Å"is a literary character who makes a judgment error that inevitably leads to his/her own destruction.† Sophocles’ Oedipus exemplifies Aristotle’s definition of a tragic hero. In the play, Oedipus unknowingly has cursed the entire town of Thebes. He was cursedRead MoreOedipus, a Tragic Hero?2158 Words   |  9 PagesOedipus, a Tragic Hero? Elizabeth Howell English 102- B33 Professor Katie Robinson Liberty University October 12, 2012 Oedipus, a Tragic Hero? Thesis: Using Aristotle’s five different descriptions of a tragic hero, we will show that Oedipus in Oedipus the King is in fact a tragic hero and how his decisions led to his downfall. Outline: I. Introduction and Thesis Statement II. Is the character of noble birth? A. King of Thebes B. Real father was king III. Though the tragic heroRead MoreOedipus, A Tragic Hero1832 Words   |  8 Pagesmany others will likely fade away. Oedipus Rex is a tragic tale set in Ancient Greece. Greek thinker, Aristotle, said there were certain elements that would make a person qualified as a â€Å"tragic hero.† (Adade-Ywboah, Ahenkora Amankwah, 2012). We think of heroes being larger than life, possessing impeccable honor, integrity, strong leadership and having the higher moral ground. However, tragic heroes are different; they are imperfect and will inevitably face a tragic downfall. Per Aristotle, there are

Target for Overnight Rate Free Essays

The target for the overnight rate-the main tool used by the Bank of Canada to conduct  monetary policy. The Bank carries out monetary policy by influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate. We will write a custom essay sample on Target for Overnight Rate or any similar topic only for you Order Now The overnight rate is the interest rate at which major  financial  institutions borrow and lend one day funds among themselves; the Bank sets a target level for that rate. This target for the overnight rate is often referred to as the Bank’s  key interest rate  or  key policy rate. Changes in the target for the overnight rate influence other interest rates, such as those for consumer  loans  and mortgages. They can also affect the exchange  of the Canadian dollar. In November 2000, the Bank introduced a system of eight fixed dates each year on which it announces whether or not it will change the key policy rate. The Target for the Overnight Rate is the main tool used by the Bank of Canada to conduct monetary policy for this reason, it is also known as the policy interest rate. It tells major financial institutions the average interest rate that the Bank wants to see in the market where they lend each other money overnight. When the Bank changes the Target for the Overnight Rate, this change affects other interest rates in the economy. Canada’s major financial institutions routinely borrow and lend money overnight among themselves, in order to cover their transactions at the end of the day. Through the Large Value Transfer System (LVTS), these institutions conduct large transactions with each other electronically. At the end of the day, they need to settle with each other. One bank may have funds left over, while another bank may need money. The trading in funds that allows all institutions to cover their transactions at the end of the day takes place in the overnight market. The interest rate charged on those loans is called the overnight rate. The transmission mechanism of monetary policy The transmission mechanism is the complex chain of cause and effect that runs from the Bank of Canada’s actions to changes in asset prices, aggregate demand, the output gap and, eventually, inflation. Among economists, there is some debate about the nature of the transmission mechanism. Engert and Selody (1998), for example, emphasize the important distinction between the passive-money and active-money views of the transmission mechanism and argue that the possibility of making policy errors can be reduced by paying attention to both views. Even among those who agree on the broad nature of the mechanism, there is recognition of considerable uncertainty regarding the timing and quantitative importance of specific linkages. A collection of speeches and research papers published by the Bank of Canada (1996) provides a mainstream  view  of the transmission mechanism. The transmission mechanism is best understood by tracing through the effects of a hypothetical policy decision. For example, consider a situation akin to that in the autumn of 2004, when the Bank had good reason to expect that the solid economic recovery occurring both in Canada and in the global economy would create pressures for Canadian inflation to rise over the coming months. In this case, the Bank’s policy response was to raise its target for the overnight interest rate. How to cite Target for Overnight Rate, Essay examples

Business Environment for External Environment- myassignmenthelp

Question: Discuss about theBusiness Environment for Internal and External Environment. Answer: Introduction Organisational environment include both internal and external factors; it is necessary that corporations scan such markets before formulating any development strategies. The analysing of markets assists companies to identify possible risks or opportunities that they have due to their weaknesses or strengths. Environmental scanning focus on evaluating, monitoring and dissemination the information from both internal and external environment, it is conducted by the top management of a firm. In order to develop and sustain future growth, corporations are requiring analysing the external factors which influence their business. The report will focus on evaluating the external factors which influence the business of a corporation. Further, the report will provide suggestions to reduce the impact of external factors and attain success in adverse market conditions. Background According to Hamilton Webster (2015), business environment includes various types of internal and external factors that impact an organisational business; it is divided into two parts, micro, and macro environments. The micro business environment defines the internal factors which affect the productivity and performance of an organisation. The macro environment factors are external forces which influence the operations of business along with its internal environment (Wetherly Otter, 2014). For example, health and safety regulations created by government affect the internal operations of business. The external environment includes various factors such as political, social, consumer behaviour and competitor strategy. Influence of External Factors on Business Following are few external factors that affect a companys business and operations. Government Regulations and Economic Policies As per Percival, Schroeder, Miller Leape (2015), the political factors refer to the political conditions and governmental activities which affect the operations of a business. The political environment add various risks factors to a business which leads to major loss of capital and investments, political factors have the power to change the result of business transections completely. For example, increase and decrease in taxation is an element of political factors. The government might enhance the tax of few companies and reduce it for others; these policies directly influence the financial position of a firm. Other significant political decisions also influence organisations operations; a recent example is Brexit. The UKs government decided to terminate its membership from the European Union. This decision influences the Cross-Border mergers conducted between British and European companies since many mergers were revoked. The international corporate transactions also impacted because of change in sterling exchange rates (Dhingra, Ottaviano, Sampson Van Reenen, 2016). The dynamic economic environment influences the operations of a business; economic factors include demand and supply, inflation, interest rates, recession and many others (Lim Tsutsui, 2012). For example, change in interest rates of banks might influence a corporations decision if they were relying on large loans. An economic recession changes the purchasing behaviour of customers which might force companies to clear small volumes or reduce their prices. In case of employees, jobs tend to be plentiful during economic boom, and in the slow economy, many corporations adopt harsh options such as retrenchment or layoffs to reduce their operations costs. Consumer Behaviour To successfully sell services or products, a corporation is requiring assessing its customers attitude and their demands. The examinations provide necessary information to a company such as what products are liked by consumers and what factors influence their purchasing decisions (Solomon, 2014). Organisations analyse its customers attitude while formulating product development, marketing, and customer service strategies. The attitude of consumers towards a product defines their goodwill and reputation in the market, therefore, companies use effective advertisement strategies to make their brand a household name. For example, Nike started their marketing campaign called Just do it which makes them an international brand because customers reacted positively to the slogan of such campaign. There are several factors which negatively affect customers attitude towards a brand such as hidden prices, use of environment polluting material and false advertising. The corporations are requiring to continuously monitoring customer behaviour because it changes rapidly, for example, awareness regarding organic and environment-friendly products are quickly increasing because people are getting health conscious (Paul Rana, 2012). Competitor Strategy The strategies adopted by competitor significantly affect business decisions as well, an enterprise formulate its organisational policies after assessing competitors policies. One of the primary objectives of organisations is to gain a competitive advantage over other companies which allow them to capture the market and increase their sales (Grant, 2016). Usually, the customers compare price and quality of a new product with already existing products to decide whether purchasing such product is a good deal or not. Therefore, corporations must analyse prices and features of its competitors products before setting standards for their own production process. To gain competitive advantage, a company is requiring using innovative approach in existing market. For example, Uber changed taxi industry by providing online services which allow them competitive advantage. To gain competative advantage over Uber, competitors either provides less expensive prices or high-quality services to their customers (The Economist, 2014). Public Opinion The public opinions have a significant impact on a business growth, and to sustain its development, a corporation cannot ignore public opinions regarding its products, services or reputation. Due to globalisation and popularity of social media sites, opinion of the public can be detrimental or beneficial for corporations (McCombs, 2014). Negative press or media scandal can reduce the corporations reputation which decreases its products sales. Modern customers are considerably vocal regarding their opinion and thoughts on different products and services, therefore, corporations have to ensure that they fulfill their target audience requirements. The popularity of Corporate Social Responsibility principles is one of the examples of public opinion. Modern corporations cannot just focus on maximising shareholders value; they have to ensure that they are fulfilling their social responsibilities as well, such as use of recyclable products, appropriate measures for pollution control, fulfilling stakeholders interest and others (Leiserowitz, Maibach, Roser-Renouf, Smith Dawson, 2013). For example, worlds most prominent corporations are also worlds profitable companies, such as Apple, Google, Starbucks, Microsoft, and others. All of these corporations implement CSR principles and fulfill their stakeholders interest to sustain their growth. Recommendations Following are some suggestions that can be implemented by modern corporations to address external challenges and reduce their impact on business operations. Assessment of various external factors which can influence the business and its operations and developing solid strategies to address them. The corporations can carefully assess the existing and future regulations implemented by national and international government and formulate policies according to them. The company can also establish a legal committee which recommends directors regarding laws which apply to firms operations. To protect themselves from dynamic economic conditions, organisations can make necessary reserves. For example, banking corporations can maintain a certain savings ratio to protect their assets from recession. Corporations can also use specific or general reserve in adverse economic conditions. Proper study of customers behaviour will provide necessary information to firms which they can utilise while manufacturing new products. Establishing a creative thinking environment and promoting innovative ideas will assist corporations in gaining competitive advantage. Proper implementation of CSR principles and involvement in charitable causes will positively influence a corporations public image. Conclusion and Summary To conclude, the external environment includes various factors which positively or negatively influence a companys operations and proper evaluation of external environment is required while formulating organisational policies. A company is requiring analysing national and international government regulations and economic trend before taking any significant business decision. The consumer behaviour and opinions increases or decreases the sales of an enterprise in the market, therefore, it is necessary that firms maintain a positive brand image in the market. Promoting innovative thinking and original ideas can assist corporations in gaining competitive advantage and sustaining their growth. To summarise, assessment and evaluation of external factors is significantly important for modern corporations without which corporations cannot sustain their growth. References Dhingra, S., Ottaviano, G., Sampson, T., Van Reenen, J. (2016). The impact of Brexit on foreign investment in the UK.BREXIT 2016, 24. Grant, R. M. (2016).Contemporary Strategy Analysis Text Only. John Wiley Sons. Hamilton, L., Webster, P. (2015).The international business environment. Oxford University Press, USA. Leiserowitz, A. A., Maibach, E. W., Roser-Renouf, C., Smith, N., Dawson, E. (2013). Climategate, public opinion, and the loss of trust.American behavioral scientist,57(6), 818-837. Lim, A., Tsutsui, K. (2012). Globalization and commitment in corporate social responsibility: Cross-national analyses of institutional and political-economy effects.American Sociological Review,77(1), 69-98. McCombs, M. (2014).Setting the agenda: Mass media and public opinion. John Wiley Sons. Paul, J., Rana, J. (2012). Consumer behavior and purchase intention for organic food.Journal of consumer Marketing,29(6), 412-422. Percival, R. V., Schroeder, C. H., Miller, A. S., Leape, J. P. (2015).Environmental regulation: Law, science, and policy. Wolters Kluwer Law Business. Solomon, M. R. (2014).Consumer behavior: Buying, having, and being(Vol. 10). Upper Saddle River, NJ: Prentice Hall. The Economist. (2014). Uber-competitive. [Online] The Economist. Available at: https://www.economist.com/news/business/21633833-uber-risks-consumer-backlash-over-its-tough-tactics-uber-competitive [Accessed on 14/11/2017] Wetherly, P., Otter, D. (Eds.). (2014).The business environment: themes and issues in a globalizing world. Oxford University Press.

Yes I Can Essay Example

Yes I Can Essay This paper is concerned with those actions of business ? rms which have harmful e? ects on others. The standard example is that of a factory the smoke from which has harmful e? ects on those occupying neighbouring properties. The economic analysis of such a situation has usually proceeded in terms of a divergence between the private and social product of the factory, in which economists have largely followed the treatment of Pigou in The Economies of Welfare. The conclusion to which this kind of analysis seems to have led most economists is that it would be desirable to make the owner of the factory liable for the damage caused to those injured by the smoke, or alternatively, to place a tax on the factory owner varying with the amount of smoke produced and equivalent in money terms to the damage it would cause, or ? ally, to exclude the factory from residential districts (and presumably from other areas in which the emission of smoke would have harmful e? ects on others). It is my contention that the suggested courses of action are inappropriate, in that they lead to results which are not necessarily, or even usually, desirable. II. THE RECIPROCAL NATURE OF THE PROBLEM The traditional approach has tended to obscure the nature of the choice that has to be made. The question is commonly thought of as one in which A in? cts harm on B and what has to be decided is: how should we restrain A? But this is wrong. We are dealing with a problem of a reciprocal nature. To avoid the harm to, B would in? ict harm on A. The real question that has to be decided is: should A be allowed to harm B or should B be allowed to harm A? The problem is to avoid the more serious harm. I instanced in my previous article the case of a confectioner the noise and vibrations from whose machinery disturbed a doctor in his work. To avoid harming the doctor would in? ict harm on the confectioner. We will write a custom essay sample on Yes I Can specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Yes I Can specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Yes I Can specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The problem posed by this case was essentially whether it was worth while, as a result of restricting the methods of production which could be used by the confectioner, to secure more doctoring at the cost of a reduced supply of confectionery products. Another example is a? orded by the problem of straying cattle which destroy crops on neighbouring land. If it is inevitable that some cattle will stray, all increase in the supply of meat can only 1 COASE: The Problem of Social Cost be obtained at the expense of a decrease in the supply of crops. The nature of the choice is clear: meat or crops. What answer should be given is, of course, not clear unless we know the value of what is obtained as well as the value of what is sacri? ced to obtain it. To give another example, Professor George J. Stigler instances the contamination of a stream. If we assume that the harmful e? ect of the pollution is that it kills the ? sh, the question to be decided is: is the value of the ? sh lost greater or less than the value of the product which the contamination of the stream makes possible. It goes almost without saying that this problem has to be looked at in total and at the margin. III. THE PRICING SYSTEM WITH LIABILITY FOR DAMAGE I propose to start my analysis by examining a case in which most economists would presumably agree that the problem would be solved in a compeletely satisfactory manner: when the damaging business has to pay for all damage caused and the pricing system works smoothly (strictly this means that the operation of a pricing system is without cost). A good example of the problem under discussion is a? orded by the case of straying cattle which destroy crops growing on neighbouring land. Let us suppose that a farmer and cattle-raiser are operating on neighbouring properties. Let us further suppose that, without any fencing between the properties, an increase in the size of the cattle-raiser’s herd increases the total damage to the farmer’s crops. What happens to the marginal damage as the size of the herd increases is another matter. This depends on whether the cattle tend to follow one another or to roam side by side, on whether they tend to be more or less restless as the size of the herd increases and on other similar factors. For my immediate purpose, it is immaterial what assumption is made about marginal damage as the size of the herd increases. To simplify the argument, I propose to use an arithmetical example. I shall assume that the annual cost of fencing the farmer’s property is $9 and the price of the crop is $1 per ton. Also, I assume that the relation between the number of cattle in the herd and the annual crop loss is as follows: NUMBER IN HERD (STEERS) 1 2 3 4 ANNUAL CROP LOSS (TONS) 1 3 6 10 CROP LOSS PER ADDITIONAL STEER (TONS) 1 2 3 4 Given that the cattle-raiser is liable for the damage caused, the additional annual cost imposed on the cattle-raiser if he increased his herd from, say, 2 to 3 steers is $3 and in deciding on the size of the herd, he will take this into 2 COASE: The Problem of Social Cost account along with his other costs. That is, he will not increase the size of the herd unless the value of the additional meat produced (assuming that the cattle-raiser slaughters the cattle) is greater than the additional costs that this will entail, including the value of the additional crops destroyed. Of course, if, by the employment of dogs, herdsmen, aeroplanes, mobile radio and other means, the amount of damage can be reduced, these means will be adopted when their cost is less than the value of the crop which they prevent being lost. Given that the annual cost of fencing is $9, the cattle-raiser who wished to have a herd with 4 steers or more would pay for fencing to be erected and maintained, assuming that other means of attaining the same end would not do so more cheaply. When the fence is erected, the marginal cost due to the liability for damage becomes zero, except to the extent that an increase in the size of the herd necessitates a stronger and therefore more expensive fence because more steers are liable to lean against it at the same time. But, of course, it may be cheaper for the cattle-raiser not to fence and to pay for the damaged crops, as in my arithmetical example, with 3 or fewer steers. It might be thought that the fact that the cattle-raiser would pay for all crops damaged would lead the farmer to increase his planting if a cattle-raiser came to occupy the neighbouring property. But this is not so. If the crop was previously sold in conditions of perfect competition, marginal cost was equal to price for the amount of planting undertaken and any expansion would have reduced the pro? s of the farmer. In the new situation, the existence of crop damage would mean that the farmer would sell less on the open market but his receipts for a given production would remain the same, since the cattle-raiser would pay the market price for any crop damaged. Of course, if cattle-raising commonly involved the destruction of crops, the coming into existence of a cattle-raising industry might raise the price of the crops involve d and farmers would then extend their planting. But I wish to con? ne my attention to the individual farmer. I have said that the occupation of a neighbouring property by a cattleraiser would not cause the amount of production, or perhaps more exactly the amount of planting, by the farmer to increase. In fact, if the cattle-raising has any e? ect, it will be to decrease the amount of planting. The reason for this is that, for any given tract of land, if the value of the crop damaged is so great that the receipts from the sale of the undamaged crop are less than the total costs of cultivating that tract of land, it will be pro? table for the farmer and the cattle-raiser to make a bargain whereby that tract of land is left uncultivated. This can be made clear by means of an arithmetical example. Assume initially that the value of the crop obtained from cultivating a given tract of land is $12 and that the cost incurred in cultivating this tract of land is $10, the net gain from cultivating the land being $2. I assume for purposes of simplicity that the farmer owns the land. Now assume that the cattle-raiser starts operations 3 COASE: The Problem of Social Cost on the neighbouring property and that the value of the crops damaged is $I. In this case $11 is obtained by the farmer from sale on the market and $1 is obtained from the cattle-raiser for damage su? red and the net gain remains $2. Now suppose that the cattle-raiser ? nds it pro? table to increase the size of his herd, even though the amount of damage rises to $3; which means that the value of the additional meat production is greater than the additional costs, including the additional $2 payment for damage. But the total payment for damage is now $3. The net gain to the farmer from cultivating the land is still $2. The cattle-raiser would be better o? if the farmer would agree not to cultivate his land for any payment less than $3. The farmer would be agreeable to not cultivating the land for any payment greater than $2. There is clearly room for a mutually satisfactory bargain which would lead to the abandonment of cultivation. * But the same argument applies not only to the whole tract cultivated by the fanner but also to any subdivision of it. Suppose, for example, that the cattle have a well-de? ned route, say, to a brook or to a shady area. In these circumstances, the amount of damage to the crop along the route may well be great and if so, it could be that the farmer and the cattle-raiser would ? nd it pro? table to make a bargain whereby the farmer would agree not to cultivate this strip of land. But this raises a further possibility. Suppose that there is such a well de? ned route. Suppose further that the value of the crop that would be obtained by cultivating this strip of land is $10 but that the cost of cultivation is $11. In the absence of the cattle-raiser, the land would not be cultivated. However, given the presence of the cattle-raiser, it could well be that if the strip was cultivated, the whole crop would be destroyed by the cattle. In which case, the cattle-raiser would be forced to pay $10 to the farmer. It is true that the farmer would lose $1. But the cattle-raiser would lose $10. Clearly this is a * The argument in the text has proceeded on the assumption that the alternative to cultivation of the crop is abandonment of cultivation altogether. But this need not be so. There may be crops which are less liable to damage by cattle but which would not be as pro? table as the crop grown in the absence of damage. Thus. if the cultivation of a new crop would yield a return to the farmer of $1 instead of $2, and the size of the herd which would cause $3 damage with the old crop would cause $I damage with the new crop, it would be pro? able to the cattle-raiser to pay any sum less than $2 to induce the farmer to change his crop (since this would reduce damage liability from $3 to $1) and it would be pro? table for the farmer to do so if the amount received was more than $1 (the reduction in his return caused by switching crops). In fact, there would be room for a mutually satisfactory bargain in all cases in which change of crop w ould reduce the amount of damage by more than it reduces the value of the crop (excluding damage)—in all cases, that is, in which a change in the crop cultivated would lead to an increase in the value of production. COASE: The Problem of Social Cost situation which is not likely to last inde? nitely since neither party would want this to happen. The aim of the farmer would be to induce the cattle-raiser to make a payment in return for an agreement to leave this land uncultivated. The farmer would not be able to obtain a payment greater than the cost of fencing o? this piece of land nor so high as to lead the cattle-raiser to abandon the use of the neighbouring property. What payment would in fact be made would depend on the shrewdness of the farmer and the cattle-raiser as bargainers. But as the payment would not be so high as to cause the cattle-raiser to abandon this location and as it would not vary with the size of the herd, such an agreement would not a? ect the allocation of resources but would merely alter the distribution of income and wealth as between the cattle-raiser and the farmer. I think it is clear that if the cattle-raiser is liable for damage caused and the pricing system works smoothly, the reduction in the value of production elsewhere will be taken into account in computing the additional cost involved in increasing the size of the herd. This cost will be weighed against the value of the additional meat production and, given perfect competition in the cattle industry, the allocation of resources in cattle-raising will be optimal. What needs to be emphasized is that the fall in the value of production elsewhere which would be taken into account in the costs of the cattle-raiser may well be less than the damage which the cattle would cause to the crops in the ordinary course of events. This is because it is possible, as a result of market transactions, to discontinue cultivation of the land. This is desirable in all cases in which the damage that the cattle would cause, and for which the cattle-raiser would be willing to pay, exceeds the amount which the farmer would pay for use of the land. In conditions of perfect competition, the amount which the farmer would pay for the use of the land is equal to the di? rence between the value of the total production when the factors are employed on this land and the value of the additional product yielded in their next best use (which would be what the farmer would have to pay for the factors). If damage exceeds the amount the farmer would pay for the use of the land, the value of the additional product of the factors employed elsewhere would exceed the value of the total product in this use after damage is taken into account. It follows that it would be desirable to abandon cultivation of the land and to release the factors employed for production elsewhere. A procedure which merely provided for payment for damage to the crop caused by the cattle but which did not allow for the possibility of cultivation being discontinued would result in too small an employment of factors of production in cattle-raising and too large an employment of factors in cultivation of the crop. But given the possibility of market transactions, a situation in which damage to crops exceeded the rent of the land would not endure. Whether the cattle-raiser pays the farmer to leave the land uncultivated or himself rents the land by paying the land-owner an 5 COASE: The Problem of Social Cost amount slightly greater than the farmer would pay (if the farmer was himself renting the land), the ? nal result would be the same and would maximise the value of production. Even when the farmer is induced to plant crops which it would not be pro? table to cultivate for sale on the market, this will be a purely short-term phenomenon and may be expected to lead to an agreement under which the planting will cease. The cattle-raiser will remain in that location and the marginal cost of meat production will be the same as before, thus having no long-run e? ect on the allocation of resources. IV. THE PRICING SYSTEM WITH NO LIABILITY FOR DAMAGE I now turn to the case in which, although the pricing system is assumed to work smoothly (that is, costlessly), the damaging business is not liable for any of the damage which it causes. This business does not have to make a payment to those damaged by its actions. I propose to show that the allocation of resources will be the same in this case as it was when the damaging business was liable for damage caused. As I showed in the previous case that the allocation of resources was optimal, it will not be necessary to repeat this part of the argument. I return to the case of the farmer and the cattle-raiser. The farmer would su? er increased damage to his crop as the size of the herd increased. Suppose that the size of the cattle-raiser’s herd is 3 steers (and that this is the size of the herd that would be maintained if crop damage was not taken into account). Then the farmer would be willing to pay up to $3 if the cattle-raiser would reduce his herd to 2 steers, up to $5 if the herd were reduced to 1 steer and would pay up to $6 if cattle-raising was abandoned. The cattle-raiser would therefore receive 53 from the farmer if he kept 2 steers instead of 3. This $3 foregone is therefore part of the cost incurred in keeping the third steer. Whether the $3 is a payment which the cattle-raiser has to make if he adds the third steer to his herd (which it would be if the cattle-raiser was liable to the farmer for damage caused to the crop) or whether it is a sum of money which he would have received if he did not keep a third steer (which it would be if the cattle-raiser was not liable to the farmer for damage caused to the crop) does not a? ct the ? nal result. In both cases $3 is part of the cost of adding a third steer, to be included along with the other costs. If the increase in the value of production in cattle-raising through increasing the size of the herd from 2 to 3 is greater than the additional costs that have to be incurred (including the $3 damage to crops), the size of the herd will be increased. Otherwise, it will not. The size of t he herd will be the same whether the cattle-raiser is liable for damage caused to the crop or not. It may be argued that the assumed starting point—a herd of 3 steers—was arbitrary. And this is true. But the farmer would not wish to pay to avoid crop damage which the cattle-raiser would not be able to cause. For example, the maximum annual payment which the farmer could be induced to pay could not 6 COASE: The Problem of Social Cost exceed $9. the annual cost of fencing. And the farmer would only be willing to pay this sum if it did not reduce his earnings to a level that would cause him to abandon cultivation of this particular tract of land. Furthermore, the farmer would only be willing to pay this amount if he believed that, in the absence of any payment by him, the size of the herd maintained by the cattle-raiser would be 4 or more steers. Let us assume that this is the case. Then the farmer would be willing to pay up to $3 if the cattle-raiser would reduce his herd to 3 steers, up to $6 if the herd were reduced to 2 steers, up to $8 if one steer only were kept and up to $9 if cattle-raising were abandoned. It will be noticed that the change in the starting point has not altered the amount which would accrue to the cattle-raiser if he reduced the size of his herd by any given amount. It is still true that the cattle-raiser could receive an additional $3 from the farmer if he agreed to reduce his herd from 3 steers to 2 and that the $3 represents the value of the crop that would be destroyed by adding the third steer to the herd. Although a di? erent belief on the part of the farmer (whether justi? ed or not) about the size of the herd that the cattle-raiser would maintain in the absence of payments from him may a? ct the total payment he can be induced to pay, it is not true that this di? erent belief would have any e? ect on the size of the herd that the cattle-raiser will actually keep. This will be the same as it would be if the cattle-raiser had to pay for damage caused by his cattle, since a receipt foregone of a given amount is the equivalent of a payment of the same amount. It mi ght be thought that it would pay the cattle-raiser to increase his herd above the size that he would wish to maintain once a bargain had been made, in order to induce the farmer to make a larger total payment. And this may be true. It is similar in nature to the action of the farmer (when the cattle-raiser was liable for damage) in cultivating land on which, as a result of an agreement with the cattle-raiser, planting would subsequently be abandoned (including land which would not be cultivated at all in the absence of cattle-raising). But such manoeuvres are preliminaries to an agreement and do not a? ect the longrun equilibrium position, which is the same whether or not the cattle-raiser is held responsible for the crop damage brought about by his cattle. It is necessary to know whether the damaging business is liable or not for damage caused since without the establishment of this initial delimitation of rights there can be no market transactions to transfer and recombine them. But the ultimate result (which maximises the value of production) is independent of the legal position if the pricing system is assumed to work without cost. V. THE PROBLEM ILLUSTRATED ANEW The harmful e? ects of the activities of a business can assume a wide variety of forms. An early English case concerned a building which, by obstructing currents of air, hindered the operation of a windmill. A recent case in Florida 7 COASE: The Problem of Social Cost concerned a building which cast a shadow on the cabana, swimming pool and sunbathing areas of a neighbouring hotel. The problem of straying cattle and the damaging of crops which was the subject of detailed examination in the two preceding sections, although it may have appeared to be rather a special case, is in fact but one example of a problem which arises in many di? erent guises. To clarify the nature of my argument and to demonstrate its general applicability, I propose to illustrate it anew by reference to four actual cases. Let us ? rst reconsider the case of Sturges v. Bridgman which I used as an illustration of the general problem In my article on â€Å"The Federal Communications Commission. † In this case, a confectioner (in Wigmore Street) used two mortars and pestles in connection with his business (one had been in operation in the same position for more than 60 years and the other for more than 26 years). A doctor then came to occupy neighbouring premises (in Wimpole Street). The confectioner’s machinery caused the doctor no harm until, eight years after he had ? rst occupied the premises, he built a consulting room at the end of his garden right against the confectioner’s kitchen. It was then found that the noise and vibration caused by the confectioner’s machinery made it di? cult for the doctor to use his new consulting room. â€Å"In particular . . . the noise prevented him from examining his patients by auscultation for diseases of the chest. He also found it impossible to engage with e? ect in any occupation which required thought and attention. The doctor therefore brought a legal action to force the confectioner to stop using his machinery. The courts had little di? culty in granting the doctor the injunction he sought. â€Å"Individual cases of hardship may occur in the strict carrying out of the principle upon which we found our judgment, but the negation of the principle would lead even more to individual hardship, and wo uld at the same time produce a prejudicial e? ect upon the development of land for residential purposes. † The court’s decision established that the doctor had the right to prevent the confectioner from using his machinery. But, of course, it would have been possible to modify the arrangements envisaged in the legal ruling by means of a bargain between the parties. The doctor would have been willing to waive his right and allow the machinery to continue in operation if the confectioner would have paid him a sum of money which was greater than the loss of income which he would su? er from having to move to a more costly or less convenient location or from having to curtail his activities at this location or, as was suggested as a possibility, from having to build a separate wall which would deaden the noise and vibration. The confectioner would have been willing to do this if the amount he would have to pay the doctor was less than the fall in income he would su? er if he had to change his mode of operation at this location, abandon his operation or move his confectionery business to some other location. The solution of the problem depends essentially on whether the continued use of the machinery adds more to the confectioner’s income than it subtracts from 8 COASE: The Problem of Social Cost the doctor’s. But now consider the situation if the confectioner had won the case. The confectioner would then have had the right to continue operating his noise and vibration-generating machinery without having to pay anything to the doctor. The boot would have been on the other foot: the doctor would have had to pay the confectioner to induce him to stop using the machinery. If the doctor’s income would have fallen more through continuance of the use of this machinery than it added to the income of the confectioner, there would clearly be room for a bargain whereby the doctor paid the confectioner to stop using the machinery. That is to say, the circumstances in which it would not pay the confectioner to continue to use the machinery and to compensate the doctor for the losses that this would bring (if the doctor had the right to prevent the confectioner’s using his machinery) would be those in which it would be in the interest of the doctor to make a payment to the confectioner which would induce him to discontinue the use of the machinery (if the confectioner had the right to operate the machinery). The basic conditions are exactly the same in this case as they were in the example of the cattle which destroyed crops. With costless market transactions, the decision of the courts concerning liability for damage would be without e? ect on the allocation of resources. It was of course the view of the judges that they were a? ecting the working of the economic system-and in a desirable direction. Any other decision would have had â€Å"a prejudicial e? ect upon the development of land for residential purposes,† an argument which was elaborated by examining the example of a forge operating on a barren moor. which was later developed for residential purposes. The judges’ view that they were settling how the land was to be used would be true only in the case in which the costs of carrying out the necessary market transactions exceeded the gain which might be achieved by any rearrangement of rights. And it would be desirable to preserve the areas (Wimpole Street or the moor) for residential or professional use (by giving non-industrial users the right to stop the noise, vibration, smoke, etc. , by injunction) only if the value of the additional residential facilities obtained was greater than the value of cakes or iron lost. But of this the judges seem to have been unaware. The reasoning employed by the courts in determining legal rights will often seem strange to an economist because many of the factors on which the decision turns are, to an economist, irrelevant. Because of this, situations which are, from an economic point of view, identical will be treated quite di? erently by the courts. The economic problem in all cases of harmful e? ects is how to maximise the value of production. In the case of Bass v. Gregory fresh air was drawn in through the well which facilitated the production of beer but foul air was expelled through the well which made life in the adjoining houses less pleasant. The economic problem was to decide which to choose: a lower cost of beer and worsened amenities in adjoining houses or a higher cost of beer and improved amenities. In deciding this question, the â€Å"doctrine of lost grant† is 9 COASE: The Problem of Social Cost about as relevant as the colour of the judge’s eyes. But it has to be remembered that the immediate question faced by the courts is not what shall be done by whom but who has the legal right to do what. It is always possible to modify by transactions on the market the initial legal delimitation of rights. And, of course, if such market transactions are costless, such a rearrangement of rights will always take place if it would lead to an increase in the value of production. VI. THE COST OF MARKET TRANSACTIONS TAKEN INTO ACCOUNT The argument has proceeded up to this point on the assumption (explicit in Sections III and IV and tacit in Section V) that there were no costs involved in carrying out market transactions. This is, of course, a very unrealistic assumption. In order to carry out a market transaction it is necessary to discover who it is that one wishes to deal with, to inform people that one wishes to deal and on what terms, to conduct negotiations leading up to a bargain, to draw up the contract, to undertake the inspection needed to make sure that the terms of the contract are being observed and so on. These operations are often extremely costly, su? ciently costly at any rate to prevent many transactions that would be carried out in a world in which the pricing system worked without cost. In earlier sections, when dealing with the problem of the rearrangement of legal rights through the market, it was argued that such a rearrangement would be made through the market whenever this would lead to an increase in the value of production. But this assumed costless market transactions. Once the costs of carrying out market transactions are taken into account it is clear that such a rearrangement of rights will only be undertaken when the increase in the value of production consequent upon the rearrangement is greater than the costs which would be involved in bringing it about. When it is less, the granting of an injunction (or the knowledge that it would be granted) or the liability to pay damages may result in an activity being discontinued (or may prevent its being started) which would be undertaken if market transactions were costless. In these conditions the initial delimitation of legal rights does have an e? ect on the e? ciency with which the economic system operates. One arrangement of rights may bring about a greater value of production than any other. But unless this is the arrangement of rights established by the legal system, the costs of reaching the same result by altering and combining rights through the market may be so great that this optimal arrangement of rights, and the greater value of production which it would bring, may never be achieved. The part played by economic considerations in the process of delimiting legal rights will be discussed in the next section. In this section, I will take the initial delimitation of rights and the costs of carrying out market transactions as given. It is clear that an alternative form of economic organisation which could achieve the same result at less cost than would be incurred by using the market 10 COASE: The Problem of Social Cost would enable the value of production to be raised. As I explained many years ago, the ? rm represents such an alternative to organising production through market transactions. Within the ? rm individual bargains between the various cooperating factors of production are eliminated and for a market transaction is substituted an administrative decision. The rearrangement of production then takes place without the need for bargains between the owners of the factors of production. A landowner who has control of a large tract of land may devote his land to various uses taking into account the e? ect that the interrelations of the various activities will have on the net return of the land, thus rendering unnecessary bargains between those undertaking the various activities. Owners of a large building or of several adjoining properties in a given area may act in much the same way. In e? ect, using our earlier terminology, the ? rm would acquire the legal rights of all the parties and the rearrangement of activities would not follow on a rearrangement of rights by contract, but as a result of an administrative decision as to how the rights should be used. It does not, of course, follow that the administrative costs of organising a transaction through a ? rm are inevitably less than the costs of the market transactions which are superseded. But where contracts are peculiarly di? ult to draw up and an attempt to describe what the parties have agreed to do or not to do (e. g. the amount and kind of a smell or noise that they may make or will not make) would necessitate a lengthy and highly involved document, and, where, as is probable, a long-term contract would be desirable, it would be hardly surprising if the emergence of a ? rm or the extension of the activities of an existing ? rm was not the solution adopted on many occasions to deal with the problem of harm ful e? ects. This solution would be adopted whenever the administrative costs of the ? m