2003] The Uses of History in Law and Economics 663 first, relatively unnoticed, time twenty-three years earlier in the context of his The Nature of the Firm), but this time with direct reference to the relevance of legal liability rules in a world with transaction costs. Becker, after completing his doctoral dissertation in 1955(published in 1957), extended the realm of neo-classical theory by employing it in the analysis of non-market behavior. His starting point was racial discrimination; he then proceeded to the family(until then a black box for economists), and, by the late 1960s arrived at crime and punishment. Thus the work of Coase and Becker planted the roots of the modern incarnation of law and economics in Chicago and in the neo-classical tradition B. Limiting the research agenda to the economic analysis of the law Both Coase and becker. the intellectual founders oflaw and economics were economists by training and much more interested in the study of economics than law. Ironically the new field of law and economics that their work launched focused mainly on the law. Both noted this a few years ago at a Chicago law School round table on the future of law and economics Becker noted, " I am certainly not an expert in law and economics.[AJ relatively small fraction of my time over the years has been spent on this subject. Coase confessed, "INJow an economist isn't really interested in this part of Law and Economics-the use of economics to analyze the law-at least this economist isn't "l0 Despite the fact that Coase and Becker 7 Ronald Coase, The Nature of the Firm, 4 Economica 386(1937); Ronald Coase, The Problem of social Cost, 3 J. L. Econ. 1(1960) Gary Becker, The Economics of Discrimination(1957); Gary Becker, Crime and Punishment: An Economic Approach, 76 J. Pol. Econ. 169(1968) Interestingly, Coase also showed some interest in history. He used nineteenth-century litigation to illustrate his theorem and studied the history of lighthouses to disprove the use of this famous example in favor of government supply of supposedly public goods. See Ronald Coase, The Problem of Social Costs, 3 J. L.& Econ. 1(1960); Ronald Coase, The Lighthouse in History, 17J. L.& Econ. 357(1974). But this interest, which stemmed from Coase's faith in Empiricism, did not affect the new field of law and economics. The prime manifestation of this interest is to be found in his somewhat later work The Lighthouse in Economics, where he refuted the well-established claim that lighthouses could not be owned by private entrepreneurs but only by the government because of the public-good nature of their service Reviewing the history British lighthouses, Coase asserted that many were privately owned and allowed by the government to levy tolls on ships at 10 See Douglas G. Baird, The Future of Law and Economics: Looking Fonvard, 64 U Ch.L.Rev.1129,1134,1138(1997)2003] The Uses of History in Law and Economics 663 first, relatively unnoticed, time twenty-three years earlier in the context of his The Nature of the Firm), but this time with direct reference to the relevance of legal liability rules in a world with transaction costs.7 Becker, after completing his doctoral dissertation in 1955 (published in 1957), extended the realm of neo-classical theory by employing it in the analysis of non-market behavior. His starting point was racial discrimination; he then proceeded to the family (until then a black box for economists), and, by the late 1960s, arrived at crime and punishment.8 Thus the work of Coase and Becker planted the roots of the modern incarnation of law and economics in Chicago and in the neo-classical tradition. B. Limiting the Research Agenda to the Economic Analysis of the Law Both Coase and Becker, the intellectual founders of law and economics, were economists by training and much more interested in the study of economics than law. Ironically, the new field of law and economics that their work launched focused mainly on the law.9 Both noted this a few years ago at a Chicago Law School round table on the future of law and economics. Becker noted, "I am certainly not an expert in law and economics. ... [A] relatively small fraction of my time over the years has been spent on this subject." Coase confessed, "[N]ow an economist isn’t really interested in this part of Law and Economics — the use of economics to analyze the law — at least this economist isn’t."10 Despite the fact that Coase and Becker 7 Ronald Coase, The Nature of the Firm, 4 Economica 386 (1937); Ronald Coase, The Problem of Social Cost, 3 J.L. & Econ. 1 (1960). 8 Gary Becker, The Economics of Discrimination (1957); Gary Becker, Crime and Punishment: An Economic Approach, 76 J. Pol. Econ. 169 (1968). 9 Interestingly, Coase also showed some interest in history. He used nineteenth-century litigation to illustrate his theorem and studied the history of lighthouses to disprove the use of this famous example in favor of government supply of supposedly public goods. See Ronald Coase, The Problem of Social Costs, 3 J.L. & Econ. 1 (1960); Ronald Coase, The Lighthouse in History, 17 J.L. & Econ. 357 (1974). But this interest, which stemmed from Coase’s faith in Empiricism, did not affect the new field of law and economics. The prime manifestation of this interest is to be found in his somewhat later work The Lighthouse in Economics, where he refuted the well-established claim that lighthouses could not be owned by private entrepreneurs but only by the government because of the public-good nature of their service. Reviewing the history British lighthouses, Coase asserted that many were privately owned and allowed by the government to levy tolls on ships at port. 10 See Douglas G. Baird, The Future of Law and Economics: Looking Forward, 64 U. Chi. L. Rev. 1129, 1134, 1138 (1997)