STOREP is pleased to announce that the 2022 STOREP grant of 3,000€ for innovative small-scale research projects is awarded to
DAVID GINDIS (University of Hertfordshire)
Pareto in the Pines: How Henry Manne Taught Economics to Law Professors and Helped Law and Economics Extend Beyond Chicago and Yale
Keywords: Henry Manne; Rochester; Law and Economics Movement; Intellectual Entrepreneurship; Economics Education
JEL codes: A12; A20; B21; B25; B31; B41; K00
The study of how law and economics relate to each other has a long history and has been addressed by various schools of thought on both sides of the Atlantic (Pearson, 1997; Backhaus, 2005; Medema and Mercuro, 2006). Yet the typical historical account of the contemporary take on the topic (Kitch, 1983; Duxbury, 1995; Mackaay, 2000; Rowley, 2005) usually focuses on how the economic analysis of law emerged as a niche topic at Chicago and Yale in the 1950s and 1960s (with Aaron Director, Ronald Coase, Gary Becker, George Stigler, and Guido Calabresi) before really taking off in the 1970s (thanks to Richard Posner’s hit textbook). The typical account usually stops there, as if an origins story is sufficient.
This leaves unanswered the important question of how the teaching of law and economics spread from Chicago and Yale to become, by the early 1990s, an institutionalized feature of American legal education not just at top law schools but at most other law schools as well (Kronman, 1993). How, in other words, did the the economic way of thinking come to permeate, if not dominate, legal reasoning in law journal articles, casebooks, student papers, and judicial opinions (Morgan, 1991) in areas as diverse as contract, property, corporate, bankruptcy, antitrust, labor, securities, and environmental law? Simply assuming that the sheer intellectual aura of Chicago in the marketplace of ideas was sufficient is unsatisfactory.
Enter Henry Manne, a Chicago and Yale graduate, variously characterized as an “intellectual entrepreneur” (Ribstein, 2009) or an “organizational entrepreneur” (Teles, 2008), who once described himself as a “full-time missionary for law and economics” (Manne, 2005). Manne was an institution-builder par excellence, who vastly expanded the reach of law and economics (Priest, 2020). Manne worked tirelessly on this front – first at George Washington University (1962-1968), then at Rochester (1968-1974), Miami (1974- 1980), Emory (1980-1986), and George Mason (after 1986). His highly successful fund- raising activity enabled him to organize various kinds of events bringing together select groups of economists and lawyers, many of whom had attended his intensive summer training courses in economics for law professors.
The project relies on archival material – some of which remains to be secured – to trace the origins, operations, and reach of the first four editions of the Economics Institutes for Law Professors, colloquially known as “Pareto in the Pines,” which Manne ran at Rochester from 1971 to 1974. More specifically, building on earlier research (Gindis, 2021), the project (a) examines the teaching programs and the lists of instructors, matching these with both Manne’s brand of law and economics and the key societal debates of the time; (b) maps participants by institution, highlighting Manne’s strategy of selecting participants from a mix of top and mid-tier law schools, with a view to maximizing geographical spread; and (c) compares the reports Manne wrote to donors with how the Institutes were portrayed in the press, by various commentators, and the participants themselves.
It is easy to dismiss the Institutes as “Henry Manne’s summer indoctrination sessions” (Leff, 1974), but the fact that they were almost immediately oversubscribed suggests that there was a real demand for economics education in law schools. The project shows (d) that this sentiment was fuelled by prevailing narrative that legal education was in crisis and required reform (Packer and Ehrlich, 1972). Finally, the project looks at (e) the institutional connections the Institutes enabled Manne to forge with Rochester’s Department of Economics, whose Dean was an Institute instructor, and the Graduate School of Management, with the aim of determining the extent of William Mecking and Michael Jensen’s involvement (Gindis, 2020). As such, this research will feed into a larger project focusing on Manne’s attempt to set up a new economics-oriented law school at Rochester.
References
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Gindis, David (2020), “On the Origins, Meaning and Influence of Jensen and Meckling’s Definition of the Firm,” Oxford Economic Papers, 72(4): 966-984.
Gindis, David (2021), “Law and Economics Under the Palms: Henry Manne at the University of Miami, 1974-1980,” unpublished, earlier version available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3567105.
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Mario Cedrini