Judge Guido Calabresi : The Future of Law and Economics [40:20-45:24]

purpose, they had to pay two or three times for market price. What is there about the market price that should drive us? Why wouldn't it be better if in these areas, eminent domain, had to pay much more? The opposite social judgment, if you want, from the one in Italy with respect to villa owners, but one which I think would have made everybody feel better. 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 area. Now this of course is discussed in the book and I want to stay with the book and get back to another question to 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 sophistur, Edmund Burke would say that no sophistur could ever create a system that accurately describes reality. Do you think that there is a Berkian 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, no. 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 the 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 Berkian and common law subjects, especially, case by case, see what happens, look at what is going on, and criticize the theory that would tell us. And then 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Mill is also correct when he says sometimes when the world doesn't fit the theory, the world represents ideas that are no longer valid, past accretions of power, past exploitations so that the theory can help us to make the world better.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 the people in the past have had powers or because things have changed. So what we need is both to be Berkians in criticizing the theory and to be lymphomas, if you want, in criticizing the world, but go both ways. The economic analysis of law makes economics the queen and law the handmaiden. A thing that is solely Berkian says law and our experiences, but queen, and any theory whether it's economics or philosophy is the handmaiden, they're both reductions. I don't think Berk himself was that way, but that way of thinking is reductions. 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 in 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 ten, you're even way. Well something that might capture both, I'm going to dare to say, something that might capture both, I dare to say, is something you talk about in your book, and that's the rise of behavioral economics. So to 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, know that 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 a part on the screen, some things I'd said in my first article, and a picture of me as a child, because I wrote