Todd Zywicki blogs:
It is with deep sadness that report the news of the passing of Henry Manne today at the age of 86. I will post my own remembrances on the man and his legacy at a later time–for now though I just want to express my deepest condolences to his family. He has been a larger than life figure–scholar, leader, intellectual entrepreneur, mentor, and father–and he will be missed by many. There are few men, and even fewer academics, who leave a mark on the world as large as Henry Manne.
There will be a memorial service at George Mason Law School on February 13 at 4:00 p.m.
Henry was one of the great legal scholars of the second half of the 20th Century. He was a key founder of the law and economics movement and laid the groundwork for the revival of corporate law scholarship. He was a ceaseless and potent advocate for economic analysis, training generatons of law professors and judges through his summer programs. He was a creative educator who put George Mason on track to become a major law and economics center.
He was also a friend, mentor, and hero. I admired and liked him greatly.
My essay Manne on Insider Trading (available at SSRN: http://ssrn.com/abstract=1096259) lays out his immense contributions to that important field. In it, I wrote that:
Henry Manne’s 1966 book INSIDER TRADING AND THE STOCK MARKET therefore ranks among the truly seminal events in the economic analysis of law. One exaggerates only slightly to say that Manne stunned the corporate law academy by daring to propose the deregulation of insider trading. As we will see, the response by all too many traditionalist scholars was immediate and vitriolic.
Although Manne’s policy prescriptions have found neither legislative nor regulatory acceptance, history has vindicated Manne’s daring in at least one important respect. Although it is hard to believe at this remove, corporate law scholarship was moribund during much of the middle decades of the last century. Manne’s work on insider trading played a major role in ending that long intellectual drought by stimulating interest in economic analysis of corporate law. Whether one agrees with Manne’s views on insider trading or not, one therefore must give him due credit for helping to stimulate the outpouring of important law and economics scholarship in corporate law and securities regulation in recent decades.
Manne’s work on insider trading straddles what Richard Posner recently called the first and second generations of law and economics scholarship. The first generation, which consisted of scholars such as Gary Becker, Guido
Calabresi, Ronald Coase, and Aaron Director, blazed the trail by establishing the tools of microeconomics—most notably the rational choice model—as a methodology by which legal doctrines usefully may be examined.
The second generation took these tools and ran with them, applying them to a host of legal doctrines. Their projects typically entailed translation of some legal principle into economic terms. They then applied a few basic economic tools— cost-benefit analysis, collective action theory, decision making under uncertainty, risk aversion, and the like—to the problem. Finally, they translated the result back into legal terms.
Manne was among those first-generation scholars who paved the way for law and economics to become an accepted jurisprudential methodology, but he also was one of the first and most important second-generation scholars. As Ronald Cass observes, “Manne was one of the first legal scholars ... to use economics to generate a new insight into a legal issue and to do so in a way that dramatically changed discourse about that issue.” Indeed, Manne did it twice—once with respect to the market for the corporate control and again with respect to insider trading.
