One of the major reasons for the growth of State intervention into economic activities in the 20th century is widespread ignorance of economics. This kind of ignorance is not limited to the man in the street; it extends to judges, corporate officials, legislative staffs, government agency personnel, etc.—in short, to many of the people who do the work that ends up shaping "public policy." It is the conviction of a growing number of scholars that progress toward achieving a free economy requires extensive education in the interactions of the State and the economy—an area of study known as "law and economics."
The concept of law and economics as a specialized field of study originated in the early 1960's at the University of Chicago and is exemplified by The Journal of Law and Economics. But the concept began getting more widespread attention six years ago, thanks to the work of Henry G. Manne. Then Kenan Professor of Law and Political Science at the University of Rochester, Manne conceived and developed an annual Summer Economics Institute for Law Professors. Bringing in such distinguished free-market economists as UCLA's Armen Alchian and Harold Demsetz, Manne made the annual institutes a highly successful endeavor, for which there are now five times as many applicants as openings.
It was in 1974, however, that the law and economics concept took a quantum leap forward. That September Manne founded and became director of the Law and Economics Center at the University of Miami School of Law. In short order, the Center has attracted impressive foundation support and launched an ambitious program of activities to advance understanding of the effects of government on the economy. Under Manne's guidance, the Center's activities include:
• A law fellowship program under which economists receive a professional degree in law;
• Interdisciplinary conferences on important public issues, bringing together both legal and economic scholars;
• Continuation of the economics institutes for law-related personnel; and
• Conducting research and publishing the results.
In its first year the Center held two important conferences, one on gold clause contracts and the other on auto safety regulation. It also conducted three teaching institutes—for law professors, Congressional staff aides, and law review editors. The Center ended its first year with an academic staff of eight, including Manne and his associate director, economist Roger Miller. Its current (1975-76) year has featured conferences on national economic planning and on advertising and free speech, with another on the law and economics of deregulation scheduled for May. In the works are an economics institute for Federal judges, expansion of the Center's research capability, and the introduction of a special master's degree program in law "with a specialty in economics."
The success of the Law and Economics Center is only the latest achievement of 48-year-old Henry Manne, an energetic and outspoken advocate of the free market, whose resume already runs to eight pages. Manne earned his B.A. at Vanderbilt University, his J.D. from the University of Chicago, and the LL.M. and J.S.D. degrees from Yale. He has held regular faculty positions at St. Louis University, George Washington University, and the University of Rochester, prior to becoming Distinguished Professor of Law at the University of Miami. In addition, he has served as visiting professor at such schools as Stanford, UCLA, Michigan, and Wisconsin, and has done research at the Hudson Institute and the Hoover Institution.
Manne is a member of the bar in Illinois and New York and has been admitted to practice before the U.S. Supreme Court. Among his many affiliations, he serves as a trustee of the Foundation for Economic Education, a director of the Mont Pelerin Society, first vice president of the Philadelphia Society, and member of the academic consulting board of the Institute for Humane Studies. He has published seven books and on the order of 60 articles at last count, in publications ranging from law reviews and other scholarly journals to Barron's, Challenge, Harvard Business Review, The Public Interest, and REASON. Much of his research has focused on the stock market and securities regulation, while his articles have dealt mainly with issues affecting the role of corporations in today's mixed economy.
One of Manne's recent projects was the drafting (with Roger Miller and James Mofsky) of a piece of legislation. The proposed Florida Economic Disclosure Act would require all state agencies to justify their proposed actions by preparing an economic impact statement. In it, the agency would have to prove that the proposed action (1) is legal, (2) is the least-cost method for achieving the stated purpose, (3) is more cost-effective than doing nothing, and (4) represents the most efficient use of public and private resources. In addition the statement would have to spell out the effect of the action on competition, on preserving an open market for labor, and on all persons substantially effected (as to either costs or benefits). Manne gives it a "fair" chance to pass in the 1976 legislature.
The Economic Disclosure Act is a good illustration of the kind of practical outputs that can result from the collaboration of lawyers and economists. The need for such work is evidently well recognized, judging from the financial support Manne's center is receiving. As Manne puts it: "Few academic institutions in the United States seem capable of dealing with the intermesh of economic and legal policies in a rigorous, objective fashion. They typically demonstrate either a methodological bias toward extremely mathematical work or a doctrinal bias in favor of governmental regulation. The Law and Economics Center's fund raising success would then seem attributable mainly to a widespread recognition that its mission and program have long been needed on the American scene. There is no other university center in the country dealing with topical issues concerning private economic freedom that does rigorously scholarly research, trains new scholars for more work, and disseminates its work product to the larger academic community." One can only wish Dr. Manne and the Center continued success in these important endeavors.