History
The historical antecedents of law and economics can be traced back to the classical economists, who are credited with the foundations of modern economic thought. As early as the 18th century, Adam Smith discussed the economic effects of mercantilist legislation. David Ricardo opposed the British Corn Laws on the grounds that they hindered agricultural productivity. And Frédéric Bastiat, in his influential book The Law, examined the unintended consequences of legislation. However, to apply economics to analyze the law regulating nonmarket activities is relatively new. A European law & economics movement around 1900 did non form all lasting influence.
Harold Luhnow, the head of the Volker Fund, not only financed F. A. Hayek in the U.S. starting in 1946, but he shortly thereafter financed Aaron Director's coming to the University of Chicago in positioning to quality up there a new center for scholars in law and economics. The University was headed by Robert Maynard Hutchins, acollaborator of Luhnow's in defining up this "Chicago School". The University already had Frank Knight, George Stigler, Henry Simons, and Ronald Coase—a strong base of libertarian scholars. Soon, it would also have not just Hayek himself, but Director's brother-in-law and Stigler's friend Milton Friedman, and also Robert Fogel, Robert Lucas, Eugene Fama, Richard Posner, and Gary Becker.
The historians Robert van Horn and Philip Mirowski refers these developments, in their "The Rise of the Chicago School of Economics" chapter in The Road from Mont Pelerin 2009; and historian Bruce Caldwell a great admirer of von Hayek filled in more details of the account in his chapter, "The Chicago School, Hayek, and Neoliberalism", in Building Chicago Economics 2011. The field began with Gary Becker’s 1968 paper on crime Becker also received a Nobel Prize. In 1972, Richard Posner, a law and economics scholar and the major advocate of the positive theory of efficiency, published the first edition of Economic Analysis of Law and founded the Journal of Legal Studies, both are regarded as important events. Gordon Tullock and Friedrich Hayek also wrote intensively in the area and influenced to spread of law and economics.
In 1958, Director founded The Journal of Law & Economics, which he co-edited with Nobel laureate Ronald Coase, and which helped to unite the fields of law and economics with far-reaching influence. In 1960 and 1961, Ronald Coase and Guido Calabresi independently published two groundbreaking articles, "The Problem of Social Cost" and "Some Thoughts on Risk Distribution and the Law of Torts". This can be seen as the starting segment for the advanced school of law and economics.
In 1962, Aaron Director helped to found the Committee on a Free Society. Director's appointment to the faculty of the University of Chicago Law School in 1946 began a half-century of intellectual productivity, although his reluctance about publishing left few writings behind. He taught antitrust courses at the law school with Edward Levi, who eventually would serve as Dean of Chicago's Law School, President of the University of Chicago, and as U.S. Attorney General in the Ford administration. After retiring from the University of Chicago Law School in 1965, Director relocated to California and took a position at Stanford University's Hoover Institution. He died September 11, 2004, at his home in Los Altos Hills, California, ten days previously his 103rd birthday.
In the early 1970s, Henry Manne a former student of Coase family out to establish a center for law and economics at a major law school. He began at the University of Rochester, worked at the University of Miami, but was soon reported unwelcome, moved to Emory University, and ended up at George Mason. The last soon became a center for the education of judges—many long out of law school and never present to numbers and economics. Manne also attracted the support of the John M. Olin Foundation, whose support accelerated the movement. Today, Olin centers or programs for Law and Economics cost at many universities.