Judge Guido Calabresi : The Future of Law and Economics [15:10-20:23]

You would write you wrote a note and then you wrote what was called a comment, an article. And I had taken Torts with Jimmy James. And I thought that there were all sorts of things that people didn't understand about tort law that could be explained in terms of economics. And some things which went beyond economics, the tort law explained of economics. And so I wrote this thing as a student piece for the law journal. Funny thing, the editors, the year before me, didn't like it. They were a mighty powerful crew, Arthur Lyman was the brain of that but they didn't like it because they didn't understand it. It was so new. And so instead of publishing it as a student piece which would have happened and it would have gotten lost, I said to them, do you mind if I don't publish it? They still made me an officer because they thought I was smart. But they said no, no, don't bother publishing it. And so I put it to one side and I came back to it when I started teaching three years later. And I published it almost identically. I took out something that I should not have taken out because I got talked by one of my professors into taking it out which was very reciprocity of causation. There's still a footnote on that but there had been a much bigger discussion. And it came out and it came out actually a month before cause published, the problem of social cost. And these two things coming out together, his is dated earlier but the Journal of Law and Economics was late. So it came out essentially the same time. And at that point people read it and said, oh wow. The only thing that's sad is that having taken out this thing of you don't know when there's an accident, who causes it because they both do. It takes somebody who likes silence and somebody who likes noise to make noise difficult. If everybody likes noise, it's not a problem. If everybody likes silence, is it a pedestrian or a car? They both are involved in that. And that, when Kost said it and he said it brilliantly and much more than ever I did, he was attacked for that because he was saying that at that point, from a conservative, less fair point of view, I was writing then more than now as a young liberal. And if it had come out from both sides, an awful lot of paper would have been saved because a lot of people attacked Kost saying that's right wing stupidity, when if it had come out from the left as well, they would have said it may be stupid but it can't be ideological. So 1960, roughly speaking, is a very significant moment, of course, not for both of you and Professor Kost. So if you don't mind, I want to come back to your article and just tell us a little more about what's the argument you're making in that first piece. And then I want to link it up to what movements then develop over the 1960. Well, the argument that I was making in that piece was that were several things. One that taught law wasn't only something between an injurer and a victim but was also public law. But it decided how many accidents we had, what accidents we wanted to have because it cost too much to stop them over we would never admit that. And who bore the cost of safety and who bore the cost of the accident, so that you had a decision about which was the structure of society, how many accidents we will have. You had a question of who bears them so that you had a question of distribution and how we do best to try to spread that cost while keeping incentives for safety. And probably the thing that, at least, Can Abraham at Virginia has said is the thing that now is taken totally for granted, which at the time of writing that article was really very new, was that because of the coming of insurance, people like Fleming James had said torts has no more rule for deterrence, for deciding how to reduce accidents and do safety because people are insured at the last minute.