I first heard Henry’s name at Harvard Law School, in Victor Brudney’s Corporate Finance class. Brudney was a demanding teacher in the (Paper Chase) Kingsfield mold, and as he incorporated ideas from the finance literature in his course he had the reputation of being conservative. Not that he really was right of center. “If you think I’m right-wing, you should see this guy Manne,” he told us.
Henry Manne, you see, had written a book to defend insider trading, and that had brought down on him the wrath of the entire legal establishment. They couldn’t tell you what was wrong with insider trading, mind you, but they didn’t need to. They just knew! But while they had passion on their side, Henry had reason, the intelligence and knowledge of economics that could demonstrate just how impoverished their ideas were.
Henry was the true founder of law-and-economics, one of the most consequential schools of thought in the last 100 years. Forget literary deconstruction, feminism, gender studies, fads devoid of content or rigor. Law-and-economics has transformed the legal academy, judging, and the rules we live by. And it started with Henry.
In 1961 Henry taught at UCLA and befriended his colleague in the economics department, Armen Alchian. Over lunches one term, Armen taught Henry price theory economics. After three months of this, Henry told Armen, “You know, what you’ve taught me has some application to the law.” To which Armen responded “Aw, get out of here.” At that moment, Henry later told me, “I was law-and-economics.”
There were others in the early law-and-econ movement, to be sure, Richard Posner for example. Posner was the Balzac or Trollope of the movement, famous for non-stop pounding on his typewriter, but one who more than anything worked out the implications of the brilliant ideas of those who went before him, Henry Manne and Nobel laureate Ronald Coase.
Henry was ferociously smart, but couldn’t have done it without an exemplary courage. That virtue, C.S. Lewis reminded us, is the form of every virtue at the sticking point. For Henry, the sticking point was his defense of insider trading in 1965, which brought down on him the wrath of the entire legal academy. As a rule, legal academics are not especially brave, and most would have packed it in. But that wasn’t Henry.
Henry also had an unrivalled organizational ability, and his Law & Economics Center trained the smartest of legal academics before its outreach to law teachers stopped in 1998, a victim of its success. By that point, everyone who mattered in law faculties had gotten the message. The LEC also trained judges, and at its peak a third of the federal bench and four members of the Supreme Court had taken one of its programs.
For Bobbie and Geoff our deepest sympathy. R.I.P.
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