Source: http://www-news.uchicago.edu/releases/04/040913.director.shtml
Sept 13, 2004
University of Chicago News Office
Press Contact: Larry Arbeiter
(773) 702-8360
Aaron Director, Founder of the field of Law and Economics
Aaron Director, a distinguished University of Chicago economist who greatly
influenced the modern course of economics and legal thought through his
founding of the field of Law and Economics and his mentoring of generations
of scholars, died Saturday, Sept. 11, at his home in Los Altos Hills, Ca.,
at the age of 102.
A thoughtful and gentle scholar, Director was a passionate defender of
liberty and free markets.
"Aaron Director was one of the truly pivotal figures in the intellectual
history of American law and of the University of Chicago Law School," said
law professor Geoffrey Stone, former Dean of the Law School and Provost at
Chicago. "As an essential proponent of the economic analysis of legal
questions, he opened the way to new questions that have illuminated legal
and political issues for more than half a century."
Director, who at his death held the title of Professor Emeritus in the
University of Chicago Law School, was trained in economics at Yale and at
Chicago, taught economics at Chicago, Northwestern University and Howard
University, and also held positions during World War II in the War
Department and the Department of Commerce.
But it was his appointment to the faculty of the University of Chicago Law
School in 1946 that marked the beginning of his greatest influence. With
fellow faculty member Henry Simons, Director first began to apply the
principles of economics to legal reasoning, eventually training generations
of law students and even his colleagues on the faculty in this then-new way
of thinking about the law. His many students and colleagues, including
future Federal Judges Richard Posner, Robert Bork and Frank Easterbrook,
spread his ideas further, creating what has been called "the greatest
innovation in legal thinking since the adoption of the case method."
"Aaron Director was first and foremost a teacher of teachers," said Douglas
Baird, Professor and former Dean of the University of Chicago Law School.
"Take any course in antitrust or turn to any law review and what you
encounter are the ideas and insights Aaron Director and Edward Levi debated
in the classroom in the 1950s."
Director's own publications were modest in number, but his contributions to
his colleagues' thinking were considerable. University of Chicago colleague
and future Nobel laureate, the late George Stigler often said, "most of
Aaron's articles have been published under the names of his colleagues."
"Aaron Director's strength as a scholar was a remorseless logic and
absolute intellectual integrity," said Judge Bork, who was one of
Director's students at Chicago. "Though he chose to publish little, his
teaching, beginning with the economics of antitrust, made him the seminal
figure in launching the law and economics movement, which has transformed
wide areas of legal scholarship. A warm and patient mentor, he remained my
friend for a full half-century. I know that many others whom he influenced
could say the same."
Law and Economics as a field attempts to apply the scientific methods of
economics-including statistics and price theory-to behaviors that in the
past had been analyzed solely by appeal to the history and intuitions of
the law. With coherent theory, precise hypotheses and a willingness to
subject those hypotheses to empirical tests, it has transformed legal
thinking in the United States and in many nations around the world.
"Aaron was someone who by his personality as much as anything was able to
make this great difference in the way that people looked at the law, even
influencing people whose views were completely different from his own,"
said Nobel laureate Ronald Coase, who was a colleague of Director's at
Chicago's Law School for many years. "In all, he was a very civilized man.
But he did not like any argument that was not solid, because his own
arguments were always very solid."
Director was also intimately involved in a remarkable number of other
important developments in modern economic thought. When The Road to Serfdom
by future Nobel laureate Friedrich von Hayek could not find a publisher in
the U.S. because of its then-unfashionable classical liberal ideas, it was
Director who interceded, persuading his friends at the University of
Chicago and its Press to publish the book in a first run of 2,000 copies.
It went on to sell 100 times that number.
When future Nobelist Ronald Coase was invited to the University of Chicago
for his famous exposition of what later became known as the "Coase
Theorem," he faced his inquisitors at a dinner party at Director's home.
And when von Hayek gathered a group of like-minded scholars to discuss the
threats to freedom that were arising from collectivist government policies
at the famous "Mt. Pelerin" meetings in Switzerland, he relied on Director
to recommend others, and he invited two young colleagues named Milton
Friedman and George Stigler.
Director 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. Director continued to co-teach the course for many years,
with such colleagues as Philip Neal, who would later become Dean of the Law
School at Chicago; Kenneth Dam, who would later serve as U.S. Deputy
Secretary of State; and Posner. And Director's 1931 book The Problem of
Unemployment was co-authored with Paul Douglas, also on Chicago's faculty,
and who would later become a U.S. Senator from Illinois.
In 1958 he founded the Journal of Law and Economics, where Coase eventually
joined him as co-editor, and which has been of fundamental importance in
developing the field.
In 1962, Director helped to found the Committee on a Free Society at the
University of Chicago, which was established to "clarify and reinforce the
tradition of individual liberty in its economic, political, historical and
philosophical dimensions."
While Simons had concentrated on the tax aspects of law and economics,
Director then focused on antitrust law. Director showed early on that
antitrust laws governing patents and resale prices have little effect and
should focus instead on issues of price fixing and on the largest mergers
of competing firms. Today, law and economics ideas are fundamental to
teaching and rulings in areas as diverse as corporate law, torts, criminal
law and even constitutional law. As early as 1993, articles using economic
analysis were cited in major U.S. law journals more often than those using
any other methodology.
Kenneth Scott, an emeritus professor of law at Stanford University, recalls
Director as a man of gentleness but also a rapier intellect.
"His comments in workshops were few but invariably penetrating," Scott
said. "They reminded me of a Thurber cartoon in which one fencer slices
through the neck of the other (who seems not to realize what has just
happened), saying merely 'Touche.'"
Maurice Rosenfield, a retired Chicago lawyer who earned his J.D. degree at
the University of Chicago, recalls Director as "an incredibly influential
member of the faculty, among both students and also his colleagues. He was
also the most interesting man you could imagine. He was always available to
anyone with a question, and so wise and eloquent, and with such unique
insights. Yet he carried no pretension-he was always gracious."
"I was especially grateful to him, not only as a beneficiary of his
education, but also because of his friendship and his accessibility to me
and my colleagues at the University," said Bernard Meltzer, the Edward H.
Levi Distinguished Service Professor Emeritus at the University. "My family
also benefited from his capacity for friendship, particularly his special
touch with children. Each Christmas he was the bearer of intriguing new
jigsaw puzzles which he had crafted in his own shop. He demonstrated that
he worked with his hands as effectively as he worked with his head. The
puzzles reflected a unity of his personal and professional life, in which
he strove to understand the roots of puzzles in the law and how best to
solve them. We all will cherish the memory of his friendship."
Many of Director's ideas, though out-of-fashion at the time, have become
increasingly accepted in recent years. At a panel discussion at the
University in 1950, he stated that "there is room neither for subsidies to
individual economic activities or for price fixing of particular products,"
and he argued as well for the removal of all tariff protection, elimination
of the tax bias toward large corporations and a drastic revision of patent
laws to increase innovation. He also said, "Monopolistic determination of
wages is in no sense different from monopolistic fixing of enterprises. If
they are not to be trusted with governing industry, neither are unions."
And "I know that there is widespread belief that the proper solution is
responsible or statesmanlike behavior on the part of those who hold too
much power. I regret to say that I am skeptical and find more wisdom in
Adam Smith's observation: 'I have never known much good done by those who
affected to trade for the public good.'"
In 1965, Director retired from the University of Chicago and moved to
California, where he built a home in Los Altos Hills. He accepted a
position at the Hoover institution, and for several years he returned to
Chicago to co-teach the antitrust course with Posner.
Aaron Director was born in 1901 in Charterisk, which was then in Russia and
now in the Ukraine. He immigrated with his family to Portland, Ore., in
1913. At Lincoln High School, he was editor of the yearbook, which
predicted that he "will eventually become a newspaper editor." After
graduating from Yale University in 1924 after only three years, he took his
then "progressive" politics on a journey traveling around the world, or "at
least those aspects of the world of interest to a young radical," as Ronald
Coase wrote in a biography of Director in the Palgrave Dictionary of
Economics and the Law. Director worked at times in a coal mine, as a
migrant farm worker, and in a textile factory. He returned to Portland and
taught labor history for two years at Portland Labor College, before coming
to Chicago as a graduate student in 1927. At Chicago, he took courses with
some of the most distinguished scholars of the day, including Frank Knight
and Paul Douglas. But according to Coase, the course that transformed his
thinking was taught by Jacob Viner. "It is easy to understand why a solid
course by this great teacher and great economist would have swept away like
chaff in a windstorm the nebulous idealism and Socialist views of
Director's Yale days," Coase wrote in Palgrave.
He stayed at Chicago for several years as an instructor, also bringing his
younger sister Rose to the University. There, she finished her
undergraduate work and entered graduate school in economics, where she
would meet her future husband, Milton Friedman.
Director is survived by his sister, Rose Director Friedman, of San
Francisco, Calif. Services are pending at the University of Chicago.
Contributions may be made to the Law and Economics Program at the
University of Chicago Law School.
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