The meaning of business
Why do firms exist? Strangely, no-one appears to have asked this question until a 27 year-old economist did so in 1937. Ronald Coase published his answer in The Nature of the Firm, now considered a seminal text. He studied the circumstances that led entrepreneurs to hire people as employees instead of simply contracting jobs out to traders and came up with the answer we now simply refer to as transaction costs. People are hired when the various associated costs are lower than they would be otherwise. ...