Judge Guido Calabresi : The Future of Law and Economics [40:57-46:06]

That would have been the world saying to the theory, you don't need to be driven by what would be the market price in every year. Now this of course is discussed in the book, and I want to stay with the book and get back to another question too about it, but I also am getting some great questions from the audience, so I want to sort of go back and forth between their questions and what you've talked about, so I will just read this question, which should be self-explanatory. Edmund Burke would say that no sophister, could ever create a system that accurately describes reality. Do you think that there is a burky in limit to what law and economics can tell us about human society, and then there's a PS towards one in the fall term of 1967 was my favorite course. Okay, I don't identify yourself by the way. Burke is the perfect counter to economic analysis of law, because Burke is exactly somebody who is saying, you see how the world does things and then you think about theory. Now I don't think Burke was against theory, but he was a person who wanted to emphasize what was happening as a way of looking at things. My own view is that the beauty of law is precisely that we are profoundly Burke in, and common law subjects especially, case by case, see what happens, look at what is going on, and criticize the theory of it would tell us. That's totally Burke. On the other hand, Mill is also correct when he says, sometimes when the world doesn't fit the theory, the world represents ideas that are no longer valid, past accretions of power, past exploitations so that the theory can help us to make the world better. It isn't always the world that is right, the world is often what has happened because of people in the past have had powers or because things have changed. So what we need is both to be Burkeians in criticizing the theory and to be, if you want, in criticizing the world, but go both ways. Economic analysis of law makes economics the queen and law the handmaiden. A thing that is solely Burkeian says law and our experiences the queen and any theory whether it's economics or philosophy is the handmaiden. They are both reductionists. I don't think Burke himself was that way, but that way of thinking is reductionist. You need both to try to make the world better because the world, because things are hard and theoretical thinking helps that and practical experience does too. And that for me is the joy and law, but because it is hard to do both, there's always a tendency for people to say, the other side I won't bother. Much easier to get tenure, even way. Well, something that might capture both, I'm going to dare to say, something that might capture both. I dare to say, might is something you talk about in your book and that's the rise of behavioral economics. So what extent is that influence your own thinking about law and economics? Now in my vanity, and those who have had me as a teacher, no, but modesty is not my greatest quality, I like to think that I was a behavioral economist before they were behavioral economists. And there's a guy in Belgium actually, his name is four, who once gave a talk in my presence in which he said just that and he showed part on the screen some things I said in my first article and a picture of me as a child because I wrote the article when I was 12. Then something else which was behavioral economics when I was 17 or something and kept saying that behavioral economics and specifically the great psychologists who were behind it did in a particular area in a particular way what I'm suggesting in this book more generically.