It has become dependent on you by locating its plant there,” he said. It’s costly for the power plant to find coal from elsewhere, it would have to ship it in. So, at that point we’re at a competitive point in the market.” Then Hart brings in something Williamson called ‘fundamental transformation.’ “If one of them decided to locate next to you, it’s you versus them and all those other power plants are out of the picture. There are a lot of power companies around the country and any one of them could locate a plant there. “It would be good to have someone next to you using your coal. “If you’re a coal mine, you’re fixed in place,” Hart says. Hart shares an example that illustrates the core of Williamson’s theory of the firm. Not even Hart, who has built on Williamson’s work, is able to fully understand all of Williamson’s ideas in the field of institutional economics. Even his students admit that Williamson’s course is the “tough stuff” and that his style is abstract. While reading a Williamson course, a lay person would become lost almost immediately. Of course, there are lectures referencing and addressing his work. He’s no longer teaching these days but he still has an office on campus. Inside the Haas School of Business, Williamson is an institution himself. “You ask good questions, I give bad answers.” His wife Dolores, who passed away a few years ago, was what made his life rich he says with sincerity. “I guess I have a rich house.” He laughs. He admits his age is beginning to catch up with him and looking out over the Berkley campus, the hills and San Francisco Bay he begins as he begins most sentences. Williamson, how do you define a rich life?” The question floats in the air. On his terrace in Berkeley Hills, California, Williamson shows us why.
Ask anyone who knows Williamson well to describe him and four words crop up repeatedly: firms, organization, transaction and humor.
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