Judge Richard Posner summarizes Gary Becker's contributions to law and economics in his 1993 talk before the American Law and Economics Association. Posner outlines how Becker extended economic analysis to non-market phenomena like crime, punishment, human capital, and discrimination. Becker's work on these topics generated empirical literature and theoretical revisions. His methodology of applying rational choice models to social behaviors helped integrate economics with sociology. Becker also encouraged applying economic analysis to non-economic institutions and seemingly non-market phenomena, influencing the work of Posner and others. Overall, Posner argues that Becker's theories have had a powerful cumulative impact and more applications to law than have been realized so far.

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LEGAL THEORY
JUDGE POSNER ON GARY BECKER
Richard A. Posner (1993). ‘Gary Becker’s Contributions to Law and Economics,’
Journal of Legal Studies, Vol. 22, No. 2, pp. 211-215.
INTRODUCTION
Judge Richard Posner of the U.S. Court of Appeals, Seventh Circuit and the
University of Chicago gave a talk in praise of Gary Becker before the American Law
and Economics Association on April 30, 1993. This essay takes up the main points
raised by Judge Richard Posner because it holds important lessons for those who are
interested in the ‘economic analysis of the law.’ Though Gary Becker is mainly an
economist who writes in support of free-markets and market economics at the
University of Chicago, his contributions to the ‘economic analysis of law’ is related
to the fact that he was able to extend the scope of economic analysis to non-market
phenomena as well. The socio-economic phenomena that he analysed using the model
of ‘rational choice theory’ included crime and punishment, types of human capital in
firms, gender differentiation and specialization in household economics, private law
enforcement, and the economic costs of racial discrimination. Gary Becker was also a
sociologist in addition to being an economist at the University of Chicago; that is
why his areas of research usually have a socio-economic dimension; and his main
preoccupation at the level of methodology was with extending the rational choice
model of economic analysis to all forms of social behaviour. In other words, Gary
Becker was able to subsume the analytic distinction between economics and
sociology that constituted the study of the social sciences and the human sciences.

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GARY BECKER’S ECONOMICS
Gary Becker showed that the economic analysis of social phenomena is not only
useful to make sense of crime and punishment, but can also serve as a useful
precursor to the economic analysis of the law. Before Gary Becker came along,
economists were interested in the rational choice model of analysis but sociologists
studying crime and punishment thought that sociological phenomena were not
susceptible to an economic analysis or explanation. It was Gary Becker who made it
possible to integrate economics with sociology by positing the rational choice model
as what is common to the empirical analysis of both market and non-market
phenomena.
That is why Gary Becker’s contributions to the economic analysis of law are
important even though he is not mainly associated with the law and economics
movement like ‘Ronald Coase, Friedrich von Hayek, James Buchanan, and George
Stigler.’ Since Gary Becker’s role in the economic analysis of the law was not well-
known in 1993, Judge Posner’s talk has served as an important source of clarification.
Subsequently, Becker and Posner wrote a blog together on the economic analysis of
the law and Becker’s graduate students and colleagues began to collaborate with
Judge Posner in the department of economics and the School of Law at the
University of Chicago.
GARY BECKER’S CONTRIBUTIONS
The first of Gary Becker’s main contributions is the fact that his work on crime and
punishment in 1968 generated ‘a considerable empirical literature on deterrence.’ It
also led to a theoretical revision of what both criminologists and sociologists

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identified to be crucial the socio-economic factors that affect ‘deterrence.’ Becker’s
work also had implications for criminal law, sentencing guidelines, white-collar
offenses, property rights, and liability rules and made it possible to analyse the
transaction costs of crime. Becker’s early work on the economics of racial
discrimination proved useful in the analysis of affirmative action, the divorce rate,
the economics of Title VII, etc. But even more than in the choice of these
controversial socio-economic topics for analysis, Becker’s main contribution was in
terms of methodology, personal influence, and in setting an example for researchers
who came in his wake. Judge Posner’s point is not that only the work of Gary Becker
that was explicitly socio-economic in orientation was useful for the economic
analysis of the law.
The work that Becker did in general economics such as his book on human capital -
where he differentiated between ‘general and firm-specific capital’ were also useful.
Gary Becker’s theory of human capital was to serve as the basis for work by later
scholars ‘on the economics of employment at will.’ Becker’s work on private
enforcement and household production has also proved useful for understanding
malfeasance and male-female wage differentials. Becker’s model of household
production also has important implications for different aspects of family law.
EXTENDING THE SCOPE OF ECONOMIC ANALYSIS
Becker’s ability to extend the scope of economic analysis to include social
phenomena made it easier for the law and economics movement to think beyond
‘maximizing’ forms of behaviour to ‘non-maximizing’ forms of behaviour. Becker’s
insistence that non-maximizing forms of behaviour can be subject to economic

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analysis made it possible to assume a basis in rationality for such behaviour and
‘generate empirically testable implications’ for the same. Becker also encouraged
fellow economists to study seemingly non-market phenomena. A good instance of
that is the collaboration between William Landes and Judge Richard Posner himself.
William Landes began his career in law and economics by studying state
employment discrimination laws and the economics of legal procedure. It was no
doubt a huge risk to study a non-economic institution like the judiciary using
economic methodology. Judge Posner also notes the encouragement and support
that he received from Gary Becker who signed him on as a research associate at the
National Bureau of Economic Research and provided ‘helpful comments’ for Judge
Posner’s early work on the theory of negligence.
But what really impressed Judge Posner is that unlike most economists who are
working on annotating, explaining, improving, or just filling in the gaps in the
literature of a given area of economics, Gary Becker was willing to take on ‘real
world problems.’ Whenever Becker made a theoretical advance in formulating a real
world problem, it was inevitably followed by an expansion of the economic, social,
and legal literature that tried to make sense of that problem. That is what his
preoccupation with areas like ‘discrimination, education, and crime’ has in common.
Needless to say, there is no lack of real world problems in areas like law and
economics that economists and legal scholars can take up for further research. The
fact that Gary Becker has worked in a number of areas in economics however does
not mean that he is shooting off in a number of different directions.

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CONCLUSION
Judge Posner points out that there is a lot of ‘convergence’ in Gary Becker’s
theoretical work; that is because his theories can be subsumed under ‘career choices,
the production of nonmarket commodities, and interdependent utilities’ albeit in the
context of human behaviour. In addition, Becker’s theories have ‘had a powerful
cumulative impact’ because he studies real world problems at depth.
Unlike most economists who restrict themselves to papers, Gary Becker was willing
to put in the effort needed to write definitive books on newly emerging areas in
economics. That is why Judge Posner believes that Gary Becker’s contributions to
economics and the economic analysis of the law will endure. And, finally, Judge
Posner concludes by pointing out that the law and economics movement is not done
with Gary Becker since his theories have ‘more applications to law than have as yet
been realized.’ It is therefore important that we learn from Gary Becker’s work in
economics and identify its ‘replicable features’ in our own research careers.
SHIVA KUMAR SRINIVASAN