Coase dismisses Knight's view that firms exists to serve the purpose of concentrating income uncertainty to the owners of the firm, not the workers. He does this by hypothesising precisely the opposite - a firm which presents a fixed income service interface whilst internally paying workers on a profits basis. While I agree that this isn't an essence of the firm, I do disagree that Coase's argument challenges that - just because it is possible to create a firm which pays its workers on a profits basis assuming fixed income service costs, this isn't a convincing argument against the idea.
After all, in a sense, all companies create a fixed income cost base with a view to making variable (and hopefully excess) profits. Just like marketers, in fact. Though with marketers, the uncertainty is even lower due to the reduced complexity in not having a firm and employees.
I think Coase is right that firms aren't the sine qua non of providing fixed income for workers - financial contracts can do this, in theory, which you can pick up in a market, independent of firms per se. Insurance policies do this kind of thing. These could, in theory, exist in a pre-firm world.
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