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Law and economics or economic analysis of law is the application of economic methods to analysis of law. Economic concepts are used to explain the effects of laws, to assess which legal rules are economically efficient, and to predict which legal rules will be promulgated.^[1]

Relationship to other disciplines and approaches[link]

As used by lawyers and legal scholars, the phrase "law and economics" refers to the application of the methods of economics to legal problems. Because of the overlap between legal systems and political systems, some of the issues in law and economics are also raised in political economy, constitutional economics and political science. Most formal academic work done in law and economics is broadly within the Neoclassical tradition.^{[citation needed]}

Approaches to the same issues from Marxist and critical theory/Frankfurt School perspectives usually do not identify themselves as "law and economics". For example, research by members of the critical legal studies movement and the sociology of law considers many of the same fundamental issues as does work labeled "law and economics".

The one wing that represents a non-neoclassical approach to "law and economics" is the Continental (mainly German) tradition that sees the concept starting out of the Staatswissenschaften approach and the German Historical School of Economics; this view is represented in the Elgar Companion to Law and Economics (2nd ed. 2005) and—though not exclusively—in the European Journal of Law and Economics. Here, consciously non-neoclassical approaches to economics are used for the analysis of legal (and administrative/governance) problems.

Origin and history[link]

As early as in the 18th century, Adam Smith discussed the economic effect of mercantilist legislation. However, to apply economics to analyze the law regulating nonmarket activities is relatively new. In 1961, Ronald Coase and Guido Calabresi independently from each other published two groundbreaking articles: "The Problem of Social Cost"^[2] and "Some Thoughts on Risk Distribution and the Law of Torts".^[3] This can be seen as the starting point for the modern school of law and economics.^[4]

In the early 1970s, Henry Manne (a former student of Coase) set out to build a Center for Law and Economics at a major law school. He began at Rochester, worked at Miami, but was soon made unwelcome, moved to Emory, and ended at George Mason. The latter soon became a center for the education of judges—many long out of law school and never exposed 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 exist at many universities.

Positive and normative law and economics[link]

Economic analysis of law is usually divided into two subfields, positive and normative.

Positive law and economics[link]

Positive law and economics uses economic analysis to predict the effects of various legal rules. So, for example, a positive economic analysis of tort law would predict the effects of a strict liability rule as opposed to the effects of a negligence rule. Positive law and economics has also at times purported to explain the development of legal rules, for example the common law of torts, in terms of their economic efficiency.

Normative law and economics[link]

Normative law and economics goes one step further and makes policy recommendations based on the economic consequences of various policies. The key concept for normative economic analysis is efficiency, in particular, allocative efficiency.

A common concept of efficiency used by law and economics scholars is Pareto efficiency. A legal rule is Pareto efficient if it could not be changed so as to make one person better off without making another person worse off. A weaker conception of efficiency is Kaldor-Hicks efficiency. A legal rule is Kaldor-Hicks efficient if it could be made Pareto efficient by some parties compensating others as to offset their loss.

Important scholars[link]

Important figures include the Nobel Prize winning economists Ronald Coase and Gary Becker, U.S. Court of Appeals for the Seventh Circuit judges Frank Easterbrook and Richard Posner, Andrei Shleifer and other distinguished scholars such as Robert Cooter, Henry Manne, William Landes, and A. Mitchell Polinsky. Guido Calabresi, judge for the U.S. Court of Appeals for the Second Circuit, author of the 1970 book, The Costs of Accidents: A Legal and Economic Analysis, wrote in depth on this subject, with Costs of Accidents being cited as influential in its extensive treatment of the proper incentives and compensation required in accident situations.^[5] Calabresi took a different approach in his 1985 book, Ideals, Beliefs, Attitudes, and the Law, where he argued, "who is the cheapest avoider of a cost, depends on the valuations put on acts, activities and beliefs by the whole of our law and not on some objective or scientific notion (69)."

Influence[link]

In the United States, economic analysis of law has been extremely influential. Judicial opinions utilize economic analysis and the theories of law and economics with some regularity. The influence of law and economics has also been felt in legal education. Many law schools in North America, Europe, and Asia have faculty members with a graduate degree in economics. In addition, many professional economists now study and write on the relationship between economics and legal doctrines. Anthony Kronman, former dean of Yale Law School, has written that "the intellectual movement that has had the greatest influence on American academic law in the past quarter-century [of the 20th Century]" is law and economics.^[6]

Critique[link]

Despite its influence, the law and economics movement has been criticized from a number of directions. This is especially true of normative law and economics. Because most law and economics scholarship operates within a neoclassical framework, fundamental criticisms of neoclassical economics have been applied to work in law and economics.

Rational choice theory[link]

Critics of the law and economics movements have argued that normative economic analysis does not capture the importance of human rights and concerns for distributive justice. Some of the heaviest criticisms of the "classical" law and economics come from the critical legal studies movement, in particular Duncan Kennedy[1] and Mark Kelman.

Pareto efficiency[link]

Relatedly, additional critique has been directed toward the assumed benefits of law and policy designed to increase allocative efficiency when such assumptions are modeled on "first-best" (Pareto optimal) general-equilibrium conditions. Under the theory of the second best, for example, if the fulfillment of a subset of optimal conditions cannot be met under any circumstances, it is incorrect to conclude that the fulfillment of any subset of optimal conditions will necessarily result in an increase in allocative efficiency.^[7]

Consequently, any expression of public policy whose purported purpose is an unambiguous increase in allocative efficiency (for example, consolidation of research and development costs through increased mergers and acquisitions resulting from a systematic relaxation of anti-trust laws) is, according to critics, fundamentally incorrect, as there is no general reason to conclude that an increase in allocative efficiency is more likely than a decrease.

Essentially, the "first-best" neoclassical analysis fails to properly account for various kinds of general-equilibrium feedback relationships that result from intrinsic Pareto imperfections.^[7]

Another critique comes from the fact that there is no unique optimal result. Warren Samuels in his 2007 book, The Legal-Economic Nexus, argues, "efficiency in the Pareto sense cannot dispositively be applied to the definition and assignment of rights themselves, because efficiency requires an antecedent determination of the rights (23-4)."

Responses[link]

Law and economics has adapted to some of these criticisms (see "contemporary developments," below). One critic, Jon D. Hanson of Harvard Law School, argues that our legal, economic, political, and social systems are unduly influenced by an individualistic model that assumes "dispositionism" -- the idea that outcomes are the result of our "dispositions" (economists would say "preferences"). Instead, Hanson argues, we should look to the "situation", both inside of us (including cognitive biases) and outside of us (family, community, social norms, and other environmental factors) that have a much larger impact on our actions than mere "choice." Hanson has written many law review articles on the subject and has books forthcoming.

Contemporary developments[link]

Law and economics has developed in a variety of directions. One important trend has been the application of game theory to legal problems. Other developments have been the incorporation of behavioral economics into economic analysis of law, and the increasing use of statistical and econometrics techniques. Within the legal academy, the term socio-economics has been applied to economic approaches that are self-consciously broader than the neoclassical tradition.

Universities with law and economics programs[link]

Almost every major American law school, and most leading economics departments, offer courses in law and economics and has faculty working in the field.

Two of the leading law schools focusing on Law and Economics are the University of Chicago Law School, whose faculty includes Judge Richard A. Posner, Ronald Coase and Gary Becker, and the George Mason University School of Law, whose faculty used to include Nobel laureate Vernon Smith (though Smith and his team have since moved to Chapman University), and perennial Nobel finalist Gordon Tullock. In the spring of 2006, Vanderbilt University Law School announced the creation of a new program to award a Ph.D. in Law & Economics. A ranking of law and economics Ph.D. programs was published in the Southern Economics Journal in 2008, and also includes among the top 10 programs (based on publications in the field) the economics departments at UC Berkeley, Harvard University, University of Connecticut, UC San Diego, Princeton University, MIT, University of Wisconsin - Madison, Florida State University, Central Michigan University, and the University of Michigan.^[8]

In Europe, a consortium of universities from ten different countries is running the European Master Program in Law and Economics, also known as EMLE, which is a European program in the field since 1990. This programme offers the unique opportunity for interdisciplinary studies of law and economics at two or even three European and Non-European universities. Each partner university awards a Master degree (LL.M. / M.A. / M.Sc.). The programme also provides students with an advanced understanding of the economic effects of divergent laws and prepares students for a professional career, for example, in public organisations, in multinational law firms or consultancy firms. Graduates are also well prepared for doctorate research in a PhD programme such as the European Doctorate in Law and Economics (EDLE), which is operated by three European centers in Law and Economics. http://www.edle-phd.eu]

The University of Toronto's Faculty of Law offers a combined J.D./M.A. Economics, as well as a J.D./Ph.D. Economics.

In 2009 the University of Copenhagen and the Copenhagen Business School established an interdisciplinary elite master program in International Law, Economics and Management that is jointly offered by both institutions. The program is not only a Copenhagen Master of Excellence, but also one of only twelve elite programs in Denmark and attracting students from all over Europe.

Since 2009 there has been created a new PhD program in Law and Economics of Finance and Money from Goethe University in Frankfurt am Main/Germany. The program is entirely created for the purpose of research in fields such as regulation of Financial Institutions and Market Regulation. The program is thought to be finished within four years and is entirely taught in English.

The Collegio Carlo Alberto in Turin, Italy hosts an International Ph.D. Program in Institutions, Economics and Law within the Centre for the Comparative Analysis of Law and Economics, Economics of Law, Economics of Institutions. Members of the teaching staff come from various academic institutes in Europe and the United States. A separate Doctoral Program in Law and Economics is currently run by the School of Economics at the University of Siena. Also in Italy, the International University College of Turin, with students and faculty from worldwide, runs a biennial Master of Sciences in Comparative Law, Economics and Finance, which challenges mainstream views on the subject.

Central European University in Budapest, Hungary offers both an MA and LLM in Law and Economics. The program is offered in both the university's Economics Department, as well as in its Legal Studies Department. This program is registered in the United States by the Commission on Higher Education of the Middle States Association of Colleges and Schools.

Switzerland's University of St. Gallen has a Law and Economics Program on both the undergraduate (Bachelor of Arts in Law and Economics) and graduate levels (Master of Arts in Law and Economics). The graduate program was initiated in October 2005 at the first international scientific conference on Law and Economics by the President of the University, Ernst Mohr and the St. Gallen Professor and leading business lawyer Peter Nobel. The Law and Economics Program is supported by an International Academic Council lead by leading experts in the field of law and economics, such as Richard A. Posner, Ronald J. Gilson, Victor Goldberg or Geoffrey P. Miller.

Operating outside this particular framework, Utrecht University offers students the possibility to major in law and economics as part of their undergraduate studies, or to specialize in law and economics in a one-year post-graduate programme.

University of Economics, Prague, specifically the Department of Institutional Economics at the Faculty of Economics and Public Administration, offers Law and Economics as a possible specialization for graduate students, while a complete graduate program is being prepared.

The University of Leicester runs a degree program called "Economics and Law", with various modules taught in the specific area.The University of Cambridge offers the option of a 'Law and Economics' paper within the Land Economy Tripos.[2] The University of Manchester Law School, Nottingham University Business School and City University Law School, London have undergraduate courses in Law and Economics. University College London offers undergraduate courses in Law and Economics in its Economics Faculty and post-graduate courses in its Law Faculty.

The Centre for Economic Studies and Planning, Jawaharlal Nehru University, was the first to introduce a Post-graduate Optional course in Law and Economics in India. In the past few years Law and economics has also become one of the major research areas at the centre. The Delhi School of Economics also offers law and economics courses at the post graduate level. The National University of Juridical Sciences (NUJS) offers two courses in Law and Economics to its undergraduate students, as does NALSAR University of Law. A Post-graduate Optional Course is now offered in University of Hyderabad by the Department of Economics, School of Social Sciences.

Bilkent University Faculty of Law in Turkey has also launched a graduate degree program on September 2010, titled "Law and Economics". The program runs for one year, containing courses and seminars on conventional economic analyses of law, along with the application of these analyses on the energy and telecommunication sectors of Turkey. Seminars and courses are taught in both Turkish and English.

In the National University of Singapore, a highly selective Double Honours Programme in Law and Economics was launched in 2005, whereby students complete two Bachelors' degrees in five years.

The University of Bonn has recently founded a Center for the Advanced Studies of Law and Economics (CASTLE).

The International Max Planck Research School for Competition and Innovation is a PhD program offered jointly by the Max Planck Institute for Intellectual Property and Competition Law and the Ludwig Maximilians University in Munich (Germany). The program selects outstanding candidates from the fields of law and economics to produce doctoral research in the area of the law and economics of intellectual property and competition law.^[9]

China University of Political Science and Law provides a Master/PhD program of Law and Economics. Its Center for Law and Economics, which was established in 2005, hold lectures and exchange activities regularly.

The University of Reading has launched a new LLM/MSc in Law and Economics providing a critical approach to the interrelation between the two disciplines. The programme shall enable law students to understand the economic effects of legal rules and economics students to understand the institutional legal framework of market economies.

See also[link]

Notes[link]

Further reading[link]

• Bouckaert, Boudewijn, and Gerrit De Geest, eds. (2000). Encyclopedia of Law and Economics (Edward Elgar, Online version.
• Coase, Ronald (1990). The Firm, The Market, and the Law (Chicago: University of Chicago Press, reprint ed. ISBN 0-226-11101-6.
• Cooter, Robert and Thomas Ulen (2007). Law and Economics (Addison Wesley Longman, 5th edition. ISBN 0-321-33634-8
• Friedman, David (1987). "law and economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 144–48.
• _____ (2000). Law's Order. Princeton. Chapter-preview links.
• Georgakopoulos, Nicholas L. (2005). Principles and Methods of Law and Economics: Basic Tools for Normative Reasoning (Cambridge University Press, ISBN 0-521-82681-0).
• Kennedy, Duncan (1998). "Law-and-Economics from the Perspective of Critical Legal Studies" (from The New Palgrave Dictionary of Economics and the Law PDF
• Kornhauser, Lewis (2006). "The Economic Analysis of Law," Stanford Encyclopedia of Philosophy.
• Mestmäcker, Ernst-Joachim (2007). A Legal Theory without Law: Posner v. Hayek on Economic Analysis of Law. Tübingen: Mohr. ISBN 978-3-16-149276-1. 
• Polinsky, A. Mitchell, and Steven Shavell (2008). "law, economic analysis of," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract and pre-publication copy.
• Posner, Richard A. (2007). Economic Analysis of Law (Aspen, 7th edition). ISBN 978-0-7355-6354-4.
• _____ (2006). "A Review of Steven Shavell's Foundations of Economic Analysis of Law," Journal of Economic Literature, 44(2), pp. 405-414 (press +).
• Shavell, Steven (2004). Foundations of Economic Analysis of Law. Harvard University Press. Description and scroll to chapter-preview links.
• Robé, Jean-Philippe, The Legal Structure of the Firm, Accounting, Economics, and Law: Vol. 1 : Iss. 1, Article 5, Available at: http://www.bepress.com/ael/vol1/iss1/5 (2011).

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Guido Calabresi (born October 18, 1932) is an Italian American legal scholar and senior judge on the U.S. Court of Appeals for the Second Circuit. He is a former Dean of Yale Law School, where he has been a professor since 1959. Calabresi is considered, along with Ronald Coase and Richard Posner, a founder of the field of law and economics.

Biography[link]

Guido is the son of the late cardiologist Massimo Calabresi and European literature scholar Bianca Maria Finzi-Contini Calabresi (1902–1982). Calabresi's parents, active in the resistance against Italian fascism, eventually fled Milan for New Haven, Connecticut, immigrating to the United States in September 1939. The family became naturalized American citizens in 1948. Guido's older brother Paul Calabresi (1930–2003) was a prominent medical and pharmacological researcher of cancer and oncology.

Calabresi married Anne Gordon Audubon Tyler, a social anthropologist, freelance writer, social activist, philanthropist and arts patron. Both received their primary education at the Foote School in New Haven, graduating in 1946 and 1948, respectively. They reside in Woodbridge, Connecticut and have three children. Anne Gordon Audubon Calabresi (Anne Calabresi Oldshue), a psychiatrist, graduated cum laude from Yale, attended medical school at Case Western Reserve University and completed residency at Harvard.^[1] Massimo Franklin Tyler ("M.F.T.") Calabresi, a journalist, also graduated from Yale.^[2] Bianca Finzi-Contini Calabresi attended Yale as well, graduating summa cum laude, and has a Ph.D. in Renaissance literature from Columbia.^[3] Calabresi's nephew, Steven G. Calabresi, is a renowned Constitutional Law professor at Northwestern University and a co-founder of the Federalist Society.

Education[link]

Calabresi received his B.S. summa cum laude from Yale College in 1953, majoring in economics—a choice which would have significant connections with his later pursuits. He was then selected as a Rhodes Scholar, studying at Magdalen College, Oxford, which awarded him a B.A. with First Class Honors in 1955. He received his law degree (LL.B.) magna cum laude from Yale Law School in 1958, graduating first in his class, and was also a law review member as Note Editor of the Yale Law Journal from 1957 to 1958. Following graduation from Yale Law, Calabresi served as a law clerk for U.S. Supreme Court Associate Justice Hugo Black from 1958 to 1959. Additionally, he earned a M.A. in politics, philosophy, and economics from the University of Oxford in 1959; and is a member of Phi Beta Kappa and the Order of the Coif.^[4]

Career[link]

Calabresi joined the faculty of the Yale Law School upon completion of his Supreme Court clerkship, becoming the youngest ever full professor at Yale Law, and was Dean from 1985 to 1994. He now is Sterling Professor Emeritus of Law and Professorial Lecturer in Law at Yale.

Calabresi is a member of the Connecticut Bar Association and from 1971 to 1975 served as town selectman for Woodbridge, Connecticut.^[5]

Calabresi is, along with Ronald Coase, a founder of law and economics. His pioneering contributions to the field include the application of economic reasoning to tort law, and a legal interpretation of the Coase theorem. Under Calabresi's intellectual and administrative leadership, Yale Law School became a leading center for legal scholarship imbued with economics and other social sciences. Calabresi has been awarded more than forty honorary degrees from universities across the world. He is a member of the Royal Swedish Academy of Sciences.^[6]

On February 9, 1994, former President Bill Clinton nominated Calabresi as circuit judge to the U.S. Court of Appeals for the Second Circuit, he was confirmed by the United States Senate on July 18, received his commission on July 12, and entering duty on September 16, 1994, replacing Thomas Joseph Meskill. President Clinton is a 1973 graduate of the Yale Law School, although he never had Calabresi as a professor. Among Calabresi's expansive group of former students are Supreme Court Justices Samuel Alito, Clarence Thomas and Sonia Sotomayor, former United States Attorney General Michael Mukasey, feminist legal scholar and law professor at the Universities of Michigan and Chicago Catharine MacKinnon, former White House Counsel Gregory Craig, Senator John Danforth, Harvard Law School professor Richard H. Fallon, Jr., civil and human rights legal scholar Kenji Yoshino, noted torts scholar and law professor at the University of Virginia Kenneth Abraham, and New York University School of Law torts professor Catherine Sharkey.^[7]

Calabresi took senior status on July 21, 2009.^[8]

Yale, in 2006, created the Guido Calabresi Professorship of Law, with Kenji Yoshino serving as the inaugural professor of the endowed chair.

Calabresi is the author of four books and over 100 articles on law and related subjects.

Major works[link]

• 1961, "Some Thoughts on Risk Distribution and the Law of Torts," Yale Law Journal.
• 1970. The Cost of Accidents: A Legal and Economic Analysis. Yale University Press.
• 1972 (with Douglas Melamed), "Property Rules, Liability Rules and Inalienability: One View of the Cathedral," Harvard Law Review. (Very often cited.)

Notable decisions[link]

• Leibovitz v. Paramount Pictures Corp., 137 F.3d 109 (2nd Cir. 1998).

See also[link]

• List of law clerks of the Supreme Court of the United States

References[link]

External links[link]

• Calabresi's profile at Yale Law School.
• Guido Calabresi at the Biographical Directory of Federal Judges, a public domain publication of the Federal Judicial Center.

It has been suggested that this article or section be merged into Americans with Disabilities Act of 1990 . (Discuss) Proposed since October 2011.

Americans with disabilities comprise one of the largest minority groups in the United States. According to the Disability Status: 2000 - Census 2000 Brief approximately 20% of Americans have one or more diagnosed psychological or physical disability:

Census 2000 counted 49.7 million people with some type of long lasting condition or disability. They represented 19.3 percent of the 257.2 million people who were aged 5 and older in the civilian non-institutionalized population -- or nearly one person in five..."^[1]

This percentage varies depending on how disabilities are defined. According to Census Brief 97-5, "About 1 in 5 Americans have some kind of disability, and 1 in 10 have a severe disability."^[2]

Although Americans live in the only industrialized nation without universal healthcare^{[citation needed]}, those with disabilities can generally find adequate levels of subsidized support from a variety of sources, generally at the regional level. While most rural areas — especially in the Great Plains region — have little or no government-organized medical support infrastructure for the permanently disabled indigent population, most major urban centers have healthcare systems. One of the largest developed systems is the Harris County Mental Health and Retardation Authority (MHMRA).^{[citation needed]} Started in 1992 as a spinoff of the local University of Texas Health Science Center, MHMRA proved to be a success as it focused on handling complex Medicare and Medicaid paperwork for patients, in a system which greatly cut down on administration costs and sped the approval process.^[3]

Americans with disabilities are protected by the Americans with Disabilities Act of 1990.

External links[link]

• American Association Of People With Disabilities
• United Cerebral Palsy, nonprofit supporting people with all disabilities
• Census Bureau Data on Disability
• The National Organization on Disability
• DisabilityInfo.gov - The New Freedom Initiative's Online Resource for Americans with Disabilities

References[link]

Henry Butler
Henry Butler after opening for B.B. King at the Kodak Theatre in Hollywood, California in January 2007.
Background information
Birth name	Henry Butler
Born	(1949-09-21) September 21, 1949 (age 62)
Origin	New Orleans, Louisiana, United States
Genres	Jazz
Occupations	Pianist
Instruments	Piano
Labels	Impulse Records Windham Hill Basin Street Records

Henry Butler (born September 21, 1949, New Orleans, Louisiana) is an American jazz pianist.

He is known for his technique^[1] and his ability to play in many styles of music. Referred to by Dr. John as "the pride of New Orleans", Butler is his generation's representative in the Crescent City's lineage of piano players such as Professor Longhair, James Booker, Tuts Washington, and Jelly Roll Morton.

Butler has recorded for several record labels, including Impulse, Windham Hill, and Basin Street Records.

Blinded by glaucoma since birth, Butler has not stopped pursuing photography as a hobby;^[2] some of his photographs have been shown in galleries in New Orleans. Butler is a 1974 graduate of Michigan State University and received the MSU Distinguished Alumni Award in 2009.

Following the devastation of Hurricane Katrina, Butler left New Orleans and relocated to Colorado. Butler now resides in New York as of September 2009.

Discography[link]

• Fivin' Around (1986)
• The Village (1988)
• Orleans Inspiration (1990)
• Blues & More (1992)
• For All Seasons (1996)
• Blues After Sunset (1998)
• The Game Has Just Begun (2002)
• Homeland (2004)

References[link]

External links[link]

Wikimedia Commons has media related to: Henry Butler

• Official website
• Culture Catch Music Salon & Dusty Wright Interview with Henry
• Bonnaroo Interview with Henry by Ellen Mallernee
• Le Show interview: Shearer, Harry (May 3, 1998). "le Show". HarryShearer.com. http://media.harryshearer.com/?ProgramID=263. Retrieved January 5, 2009.