|Died||September 11, 2004 102) (aged|
|Institution||Portland Labor College|
University of Chicago Law School
|Field||Law and Economics|
|Chicago school of economics|
|Alma mater||Yale University (BA)|
Aaron Director ( // ; September 21, 1901 – September 11, 2004) was a Russian-born American economist and academic who played a central role in the development of the field Law and Economics and the Chicago school of economics. Director was a professor at the University of Chicago Law School, and together with his brother-in-law, Nobel laureate Milton Friedman, Director influenced some of the next generation of jurists, including Robert Bork, Richard Posner, Antonin Scalia and Chief Justice William Rehnquist.
Director was born in Staryi Chortoryisk, Volhynian Governorate, Russian Empire (now in Ukraine) on September 21, 1901.In 1913, the 12-year-old Director and his family immigrated to the United States and settled in Portland, Oregon. In Portland, Director attended Lincoln High School where he edited the yearbook. Director had a difficult childhood in Portland, then a center of KKK and anti-communist hysteria in the wake of World War I. He encountered anti-Semitic slurs and was excluded from social circles.
Director then attended Yale University, where his friend, artist Mark Rothko also attended. He graduated in 1924 with a Bachelor of Arts after three years of study.While at Yale, Director was influenced by Thorstein Veblen and H.L. Mencken, both elitist academics who believed the public lacked the intelligence to make democracy successful, and he eventually came to hold these views as well. He and Rothko anonymously published a satirical newspaper called the Saturday Evening Pest in which he wrote “the definition of the United States shall eternally be H. L. Mencken surrounded by 112,000,000 morons” and called for an "aristocracy of the mentally alert and curious. In 1926, he returned to Portland where he was hired to run and teach at the Portland Labor College. As a radical, his invitations to Communists and Wobblies created friction with the AFL craft unions which sponsored the College. In working with these radical groups, Director developed his sense that individuals, especially elites were better equipped to affect social change than government. The fall of 1927 he entered Graduate School at the University of Chicago with a fellow-ship, where he combined his radicalism to a lifelong libertarian/classical liberal ideology. His sister, the economist Rose Director Friedman, married Milton Friedman in 1938. During World War II, he held positions in the War Department and the Department of Commerce.
Nobel laureate Austrian economist and political theorist Friedrich Hayek, who was then a professor of economics at LSE, was close to Director. They met in England and Director convinced the University of Chicago Press to publish Hayek's Road to Serfdom in the United States as part of the so-called Free Market Study which they and economist Henry Simons led.Hayek actively promoted Director in helping to fund and establish the Law and Society program in the Law School. Hayek convinced Missouri businessman Harold Luhnow, head of the Volker Fund, a foundation in Kansas City, to provide the funding. Luhnow also funded Director's University of Chicago salary for five years, a rare occurrence for the university.
At the University of Chicago, Director completed his transition to conservative corporatist. The Free Market Study had at first centered on Simons's traditional conservative antimonopoly politics, but his death in 1946 opened the door for a more radical conservatism.In 1950, Director still held some of Simons's economic philosophy, and as a result, Lunhow threatened to remove him from the Free Market Study. During this period of the 1940s and 1950s, Director broke away from traditional conservative politics, instead combining it with the social skepticism he had learned from Veblen and Mencken and the elitism he developed in Portland.
Director's appointment to the faculty of the University of Chicago Law School in 1946 began a half-century of intellectual productivity, although his reluctance about publishing left few writings behind. Director taught antitrust courses at the law school with Edward Levi, who was later Dean of Chicago's Law School, President of the University of Chicago, and U.S. Attorney General in the Ford administration.
In 1953, Director became the head of a new study called the Antitrust Project which aimed to restructure American antitrust law. The project coincided with the period in which Director broke from traditional conservative ideas and fused them with the elitism of Veblen and Mencken. He argued that private monopolies only emerged as a result of government action, without which, they would cease to be a problem. This shift helped turn the focus of the Chicago school of economics towards rebuilding corporate power.
Director used a two-part strategy to help build up the Chicago school. First, he recruited scholars as well as funding for their research. Second, he had them use Mencken's framework of mocking targets as ignorant and elitist. Two of the first converts to Director's neoliberal school were Friedman and George Stigler, scholars from the older, classically liberal Chicago conservative tradition. Friedman and Stigler were still anti-monopolist, but over the course of the 1950s, Director convinced them that monopolies would cease to be a problem under the neoliberal framework. From then on, Director served as the "ideological enforcer" of the new Chicago school with Friedman crafting the rhetoric and Stigler driving the economic vision. Through Director's Chicago school framework, scholars like Friedman and Stigler made their first advances into public-policy advocacy
Director's greatest contribution to the Chicago school lay in his ability to recruit and convert scholars to the school's neoliberal doctrine. Some of his students compared taking his antitrust or economics courses to a religious conversion with Nobel laureate Ronald Coase joking that “I regarded my role as that of Saint Paul to Aaron Director’s Christ. He got the doctrine going, and what I had to do was bring it to the gentiles."Rather than penning the great works of the Chicago school himself, he was, according to former University of Chicago Law School dean Paul Baird "a teacher of teachers."
Director founded the Journal of Law & Economics in 1958, which he co-edited with Coase, that helped to unite the fields of law and economics with far-reaching influence. In 1962, he helped to found the Committee on a Free Society. Behind the law and economics movement lay the narrative of scientific consensus. The Chicago school was not the first group to show interest in empirical economics but they used the language of science as a strong rhetorical tool. Director viewed human nature deterministically so he argued that the law could be replaced by the scientific principles of economics through efficiency measurements.
The work of Director and his students fundamentally altered public discourse around issues of economics. In 1954, President Dwight D. Eisenhower said of those who opposed the reforms of the New Deal "their number is negligible and they are stupid"By 1964, Director students including Robert Bork were working on Barry Goldwater's presidential campaign. At that time, the Chicago school was not yet the dominant force in political discourse, but in ten years, it had gone from being "negligible" to being a significant opposition to the majority. In 1973, Bork was appointed as Solicitor General of the United States by President Richard Nixon. Meanwhile, the Supreme Court had begun striking down antitrust legal precedents. In just two decades, Director and his students had brought the Chicago school from obscurity to a major intellectual force in American politics.
After retiring from the University of Chicago Law School in 1965, Director relocated to California and took a position at Stanford University's Hoover Institution. He died September 11, 2004, at his home in Los Altos Hills, California, ten days shy of his 103rd birthday.
Friedrich August von Hayek, often referred to by his initials F. A. Hayek, was an Austrian-British economist and philosopher who is best known for his defence of classical liberalism. Hayek shared the 1974 Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal for his work on economics. His account of how changing prices communicate information that helps individuals coordinate their plans is widely regarded as an important achievement in economics, leading to his prize.
Ronald Harry Coase was a British economist and author. He was the Clifton R. Musser Professor of Economics at the University of Chicago Law School, where he arrived in 1964 and remained for the rest of his life. He received the Nobel Memorial Prize in Economic Sciences in 1991.
Neoliberalism, or neo-liberalism, is a term used to describe the 20th-century resurgence of 19th-century ideas associated with free-market capitalism. A significant factor in the rise of conservative and libertarian organizations, political parties, and think tanks, and predominately advocated by them, it is generally associated with policies of economic liberalization, including privatization, deregulation, globalization, free trade, austerity and reductions in government spending in order to increase the role of the private sector in the economy and society; however, the defining features of neoliberalism in both thought and practice have been the subject of substantial scholarly debate. The term has multiple, competing definitions, and a pejorative valence. In policymaking, neoliberalism often refers to what was part of a paradigm shift that followed the failure of the Keynesian consensus in economics to address the stagflation of the 1970s.
Law and economics or economic analysis of law is the application of economic theory to the analysis of law that began mostly with scholars from the Chicago school of economics. 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. There are two major branches of law and economics. The first branch is based on the application of the methods and theories of neoclassical economics to the positive and normative analysis of the law. The second branch focuses on an institutional analysis of law and legal institutions, with a broader focus on economic, political, and social outcomes. This second branch of law and economics thus overlaps more with work on political institutions and governance institutions more generally.
The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles. Milton Friedman and George Stigler are considered the leading scholars of the Chicago school.
The Mont Pelerin Society (MPS) is an international organization composed of economists, philosophers, historians, intellectuals and business leaders. The members see the MPS as an effort to interpret in modern terms the fundamental principles of economic society as expressed by classical Western economists, political scientists and philosophers. Its founders included Friedrich Hayek, Frank Knight, Karl Popper, Ludwig von Mises, George Stigler and Milton Friedman. The society advocates freedom of expression, free market economic policies and the political values of an open society. Further, the society seeks to discover ways in which free enterprise can replace many functions currently provided by government entities.
George Joseph Stigler was an American economist, the 1982 laureate in Nobel Memorial Prize in Economic Sciences and a key leader of the Chicago School of Economics.
The William Volker Fund was a charitable foundation established in 1932 by Kansas City, Missouri, businessman and home-furnishings mogul William Volker. Volker founded the fund with the purposes of aiding the needy, reforming Kansas City's health care and educational systems, and combating the influence of machine politics in municipal governance. Following Volker's death in 1947, Volker's nephew, Harold W. Luhnow continued the fund's previous mission, but also used the fund to promote and disseminate ideas on free-market economics. During Luhnow's tenure as the fund's primary manager, the William Volker Fund was one of the few libertarian organizations with significant amounts of money at its disposal, making it a key leader in developing the modern libertarian and conservative movements in the United States.
Harold W. Luhnow was an American businessman, philanthropist, and political activist. He is most well known for his management of the influential William Volker Fund during the period between 1947 and 1964 in the United States. Luhnow and a dedicated group of staffers directed the Fund to support libertarian and conservative intellectuals and academics.
Armen Albert Alchian was an American economist. He spent almost his entire career at the University of California, Los Angeles (UCLA). A major microeconomic theorist, he is known as one of the founders of new institutional economics and widely acknowledged for his work on property rights.
The Earhart Foundation is an American private charitable foundation that has funded research and scholarship since its founding in 1929 by oil executive, Harry Boyd Earhart. Richard Ware has served as the Foundation's longtime president.
George L. Priest is an American legal scholar specializing in antitrust law. Priest has taught at the Yale Law School since 1981, where he is the Edward J. Phelps Professor of Law and Economics and Director of the John M. Olin Center for Law, Economics, and Public Policy. Priest is a noted antitrust scholar, and is also the author of a wide number of articles and monographs on the subjects of product liability, tort law, insurance litigation, and settlement. Among his students at Yale was journalist Emily Bazelon.
The Antitrust Paradox is an influential 1978 book by Robert Bork that criticized the state of United States antitrust law in the 1970s. A second edition, updated to reflect substantial changes in the law, was published in 1993. Bork has credited Aaron Director as well as other economists from the University of Chicago as influences.
The Philadelphia Society is a membership organization the purpose of which is "to sponsor the interchange of ideas through discussion and writing, in the interest of deepening the intellectual foundation of a free and ordered society, and of broadening the understanding of its basic principles and traditions". The membership of the Society tends to be composed of persons holding conservative or libertarian political views, and many of those associated with the Society have exercised considerable influence over the development of the conservative movement in the United States.
Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.
Continental Television v. GTE Sylvania, 433 U.S. 36 (1977), was an antitrust decision of the Supreme Court of the United States. It widened the scope of the "rule of reason" to exclude the jurisdiction of antitrust laws.
Harry Boyd Earhart (1870–1954) was an American business executive and philanthropist.
Ronald Hamowy was a Canadian academic, known primarily for his contributions to political and social academic fields. At the time of his death, he was professor emeritus of Intellectual History at the University of Alberta in Edmonton, Canada. Hamowy was closely associated with the political ideology of libertarianism and his writings and scholarship place particular emphasis on individual liberty and the limits of state action in a free society. He is associated with a number of prominent American libertarian organizations.
Alan Oliver (Lanny) Ebenstein is an American political scientist, educator and author, known from his biographical works on Friedrich Hayek and Milton Friedman.
Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics is a 2012 book by barrister Daniel Stedman Jones, in which the author traces the intellectual development and political rise of neoliberalism in the United States and the United Kingdom. Originally a PhD thesis, the author adapted it into a book.