Former University of Chicago economist Aaron Director was one of the founders of law and economics, a small field with large implications for the conduct of business and the protection of consumers.
Through “the relentless application of basic principles of microeconomics,” he upended conventional wisdom on antitrust policy and oriented it along free-market lines, said William Landes, a professor at the U. of C. Law School.
Mr. Director’s ideas took root not so much in books as in proteges. He was an inspiring lecturer and adviser who put forth his views at seminars, over lunch or in his house.
“It was mainly through the force of his personality,” Landes said. “Kind of an oral tradition, in which he educated a number of lawyers and law professors in the basic principles of economics and showed them why economics was extremely useful in analyzing legal issues.”
Mr. Director, 102, died Saturday, Sept. 11, of natural causes in his home in Los Altos Hills, Calif., said his sister, Rose D. Friedman.
He was born in what is now Ukraine and arrived in Portland, Ore., at the age of 12 speaking only Yiddish, said Milton Friedman, the Nobel Prize-winning economist who is married to Mr. Director’s sister. Mr. Director graduated from Yale University in three years.
Among his classmates in high school and at Yale was Mark Rothko, the abstract painter. Together they published the “Yale Saturday Evening Pest,” a two-page weekly paper.
After college, Mr. Director traveled as an itinerant coal miner, farm worker and a textile laborer. After starting graduate school in economics at the U. of C. in 1927, he found his economic worldview shift toward a vigorously free-market model.
That new outlook put him at odds with prevailing economic orthodoxy. He persuaded the University of Chicago Press to publish Friedrich von Hayek’s “The Road to Serfdom” in the U.S. after it had been rejected by other publishers for being out of the mainstream.
In 1946, in a teaching appointment to the U. of C. Law School, he started applying economic principles to legal reasoning. In a class he co-taught with Edward Levi, who later became president of U. of C. and served as U.S. attorney general in the Ford administration, Mr. Director began systematically tearing down conventional wisdom on monopolies and prices.
“Aaron Director played a fundamental role in reorienting antitrust policy along free-market lines,” said Judge Richard Posner of the 7th U.S. Circuit Court of Appeals in Chicago, one of Mr. Director’s former students.
The resulting field of law and economics seeks to apply analyticaltools such as statistics and price theory to business behaviors that were previously examined in the context of the history and intuition of the law.
In 1958, Mr. Director founded the Journal of Law and Economics and served as its editor.
He was also a gentle man, said Bernard Meltzer, an emeritus law professor at the U. of C. “Every Christmas he would come around with jigsaw puzzles for our children,” Meltzer said. “Puzzles he had crafted in his own workshop.”
A memorial service at the U. of C. is being planned.
