Law and economics movement

Friedrich Hayek and Henry Simons persuaded the Volker Fund to create a position at the law school from which Aaron Director launched the nation s first formal program in law and economics. After the Volker Fund went out of existence, the Olin Foundation became the programs primary funder. Directors courses had a profound impact on a small but dedicated core of law students, many of whom became evangelists for the law and economics movement. The program published the first issue of the Journal of Law and Economics in 1958. Director s successor, Ronald Coase, wrote what became one of the most widely cited articles in law and economics, an essay entitled The Problem of Social Cost. ... 

Greenspan was joined on this road to Damascus by Richard Posner, the guru of the law and economics movement, who subsequently recognized that the movement to deregulate the financial industry went too far by exa erating the resilience—the self-healing powers—of laissez faire capitalism. A commis-... 

In Europe, the formation of the European Economic Community has created a requirement to bring food additive approvals of the member nations into alignment, so as to eliminate differences in laws that hinder the movement of foodstuffs among these nations. Historically the member countries have differed widely in approaches to food additive approval and their tendency to approve new additives. At the time of this writing, a framework directive for food additives and several specific directives for various categories of additives are nearing completion (3). 

The strength of the temperance movement in overcoming economic realities of the day is illustrated by the effect the Eightieth Amendment had on the collection of fees by the Internal Revenue Service (IRS). In 1916, gross receipts at the IRS were 513 million, of which 241 million were derived from distilled spirits and fermented liquors. Thus, 47 percent of IRS receipts were from alcohol-related income versus 13 percent from personal income tax. The movement s fervor also affected the medical profession. With the cynical belief that physicians would discharge their responsibilities under prohibition no better than they had under the Harrison Act, new legislation was created. The specific law, the Willis-Campbell Act of 1921, was enacted in order to restrict the number of liquor prescriptions permitted by each physician. 

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