Legal scholar Bruce Ackerman described the “law and economics” movement as “the most important thing in legal education since the birth of the Harvard Law School.” The movement’s roots go back to thinkers like Adam Smith in the eighteenth century, but the modern form arose at the University of Chicago law school in the 1950s, where legal and economic scholars began to mix in a fertile brew.
Businessman John Olin and his colleague William Simon came to the view that the movement offered a superb way to reduce prosperity-damaging actions in our courts and legislatures. So they made the John M. Olin Foundation’s largest investments in planting top practitioners of the law and economics movement across elite universities, spending more than $68 million for this purpose from 1977 to 2002. They funded scholars, conferences, books, graduate students, and new freestanding centers devoted to bringing economic lessons to bear on the development of the law—at the University of Chicago, the University of Miami, UCLA, then many of the nation’s most prestigious law schools, including Harvard, Yale, Georgetown, Stanford, Virginia, Michigan, Columbia, and Cornell. The strategy assumed, correctly, that less prominent schools would feel the need to cover the field as well if it took root in top institutions.
The foundation gave grants to create fellowships for junior faculty and to endow chairs for established scholars. It funded the American Law and Economics Association, and its center at George Mason University began holding intensive seminars for judges that have now educated hundreds of jurists in economic issues, including Supreme Court members like William Rehnquist and Ruth Bader Ginsburg, who have praised it for broadening their education. Paul Brest, longtime dean of Stanford Law School who went on to head the William and Flora Hewlett Foundation, later held up Olin’s strategic grants as an example to philanthropists of the right way to “build fields and movements.” Observers agree that the law and economics movement has strengthened free markets through deregulation, expanded use of cost-benefit analysis, and antitrust reform, expanding economic opportunity in the process.
- John Miller, A Gift of Freedom: How the John M. Olin Foundation Changed America (Encounter, 2005)
- Paul Brest and Hal Harvey, Money Well Spent (Bloomberg, 2008)