12. Accountability and Greed in Investment Banking

Capitalism: Success, Crisis and Reform (PLSC 270) Professor Rae explores the creation of incentives and disincentives for individual action. The discussion begins with the Coase Theorem, which outlines three conditions for efficient transactions: 1) clear entitlements to property, 2) transparency, and 3) low transaction costs. Professor Rae then tells the story of a whaling law case from 1881 to highlight the power of incentives and property rights. The conversation then moves to Hernando de Soto’s portr