e.g a cattleman and a wheatfarmer live side by side. Some of the cows eat or trample the farmers wheat. As Coase pointed out, somebody is going to pay, either the CM or the WF. So who do WE make pay is the real question?
Strict Liability = CM pays.
No Liability = WF pays the CM not to damage him in the future(legal definition of extortion).
Coase compared Q 0f G&S XCed between two systems of enforcing the Law.
He found no difference in Q of G&S XCed. Ergo the powers that be could change the rules any which way that profited them like Pollution Credits.
Coase screwed up in his analysis and made a great big analytical Boo Boo.
I will explain Boo Boo when I get the next question.
