54-40 or Coase?

Economics scholars (as well as students in property law in US law school programs) are familiar with the Coase Theorem.

The Coase Theorem states that in a world of zero transactions costs and clearly defined property rights (i.e., that you can buy property with relative administrative ease and you can be certain that the property is yours after you've bought it), the efficient allocation of resources is independent of the distribution of property rights.

The Coase theorem, as one of the lynchpin ideas of the law-and-economics schools, essentially says that it doesn't matter how the legal authority -- say, a judge -- allocates the ownership of the property, only that the ownership is clearly defined. At such point, the actors, who will know definitively how property right are assigned, will be able to negotiate and bargain for rights.

Driving recently from Washington state to British Canada, I wondered if perhaps nations act under a somewhat similar principle. Specifically, I began to wonder if the 1849 settlement of the Oregon Country (during the single term of James K. Polk, perhaps the most under-appreciated antebellum US president) served as the "legal allocation" allowing American and Canadian actors to settle in earnest what would become Seattle and Vancouver. Seattle's creation dates to 1851; Vancouver's incorporation was in 1866.

To be sure, there are other contemporary historical elements propelling the growth of Pacific Northwest cities -- various gold rushes, beginning with California's 1848 gold rush, as well as the general westward expansionary push. Certainly the inception of transcontinental railroads in the 1870s in both the US and Canada were a factor in the growth of Seattle and Vancouver.

Perhaps Dominion in Canada in 1867 could be identified as a secondary "Coase" moment, which, more than any other point in evolutionary Canadian history, marks the moment that Canada transformed from colony into nation-state.

An interesting question with implications for game theorists, political scientists, legal scholars and historians alike.