Mainstream economists, during the nineteenth and early part of the twentieth century gave considerable attention to the price system but not to the underlying property right system on which the price system rests in a capitalist economy. So, economists were surprised when R. H. Coase (1959) claimed, in an article on the Federal Communication Commission, that the FCC is unnecessary to avoid interference between broadcasters in the uses they make of frequency signals. He wrote:

The interference that concerned supporters of FCC regulation is in the nature of an externality, and, so, Coase's claim, if correct, implied rejection or at least revision of the externality doctrine that had by that time become accepted doctrine in economics. He was called upon to defend this implication, and he did this in his classic 1960 article on “The Problem of Social Cost.” In that article, Coase examines the consequences of alternative assignments of ownership rights. He asks readers to compare the consequences for resource allocation of giving farmers the right to graze their cattle without being liable for damages done to a neighboring farmer's crops by cattle that accidentally stray from the path on which they are being led to the consequences that would follow if, instead, the farmer enjoyed a right to grow crops unmolested by the rancher's cattle.