That became "one of those accidental factors which seem to have shaped my life," he wrote, and eventually led him to the study of economics.
Coase's ideas grew from roots in the real world. In the 1930s, while a student at the London School of Economics, he toured U.S. factories. What he learned from talking to business owners shaped his first significant paper, "The Nature of the Firm," published in 1937 when he was in his mid-20s.
His second influential paper, published in 1960 and titled "The Problem of Social Cost," made the case that parties in a dispute such as a railroad and a farmer can negotiate ideal agreements without government intervention as long as property rights are clear. The idea, called the Coase Theorem, still helps policymakers think about when taxes are appropriate to resolve problems such as industrial pollution.
In a 1997 interview published in the journal Reason, Coase talked about studying the effects of government regulation using real-world cases.
"Economics has been becoming more and more abstract, less and less related to what goes on in the real world," Coase told the magazine. "In fact, economists have devoted themselves to studying imaginary systems, and they don't distinguish between the imaginary system and the real world. ... All the prestige goes to people who produce the most abstract results about an economic system that doesn't exist."
His most recent book, co-authored with former student Nina Wang, looked at China's market transformation. "How China Became Capitalist" was published last year when Coase was 101.