A well-defined task can easily be put out to the market, where a contractor is paid a fixed sum for doing it.
The firm comes into its own when simple contracts of this kind will not suffice.
Instead, an employee agrees to follow varied and changing instructions, up to agreed limits, for a fixed salary.
Coase had first set out his theory while working as a lecturer in Dundee, in 1932, having spent the prior academic year in America, visiting factories and businesses.
“The nature of the firm”, his paper, did not appear for another five years, in part because he was reluctant to rush into print.
他的论文——《公司的性质》(The nature of the firm)在那之后的5年中没有出场，部分是因为他不情愿匆忙出版。
Though widely cited today, it went largely unread at first.
But a second paper, “The problem of social cost”, published in 1960, by which time he had moved to America, brought him to prominence.
但是，在他已经移居美国的1960年发表的第二篇论文——《社会成本问题》(The problem of social cost)却让他名声大振。
It argued that private bargaining could resolve social problems, such as pollution, as long as property rights are well defined and transaction costs are low (they rarely are).
He had been asked to expound his new theory earlier that year to a sceptical audience of University of Chicago economists.
By the end of the evening, he had won everyone around.
Coase was invited to join the university's faculty in 1964; and there he remained until his death in 2013 at the age of 102.