aron Director, an economist whose rigorous free-market analysis profoundly influenced approaches to antitrust law, died on Saturday at his home in Los Altos Hills, Calif. He was 102.
His death was announced by the University of Chicago, where he taught for two decades and imbued a generation of some of the nation's most influential economic and legal scholars with startling new ways to view public issues, particularly antitrust policy, through an economic lens. Milton Friedman, Dr. Director's brother-in-law and his longtime colleague, said in an interview yesterday that his achievement was "to apply economic analysis to the kind of issues that had been treated on the basis of supposed common sense before."
In particular, Dr. Friedman cited a study published by John S. McGee in 1958 that was specifically intended to prove Dr. Director's thesis that would-be monopolists always prefer merger to predatory pricing. The paper is widely believed to prove that the government's 1911 breakup of the Standard Oil trust as a monopolistic combination hurt rather than benefited consumers because prices of oil products were actually lower under the efficiencies the trust created.
Antitrust laws restrict business practices considered unfair or monopolistic, like conspiring to fix prices, and courts have considerable latitude in determining both violations of the laws and appropriate remedies. Dr. Director's contribution was to apply statistics and price theory to judicial thinking.
Robert H. Bork, who was a student of Dr. Director and later a judge and antitrust expert, said Dr. Director was "the first one anywhere to question the economics of antitrust as the courts developed it."
On a personal level, Dr. Bork said in an interview, "Aaron gradually destroyed my dreams of socialism with price theory."
Dr. Director's conservatism was such that he called Dr. Friedman, long a revered guru to conservative intellectuals, "my radical brother-in-law."
In an interview, Kenneth E. Scott, a professor emeritus at Stanford Law School, said that Dr. Director's contribution was to refocus antitrust law to make it serve the interests of consumers, not the interests of competing companies. Dr. Bork said that, practically, this meant that big is not necessarily bad.
In 1958, Dr. Director magnified his influence by founding The Journal of Law and Economics, which spread his ideas to courthouses and law schools; both institutions now routinely employ economists.
A central idea of law and economics is to promote efficiency, not equitable distribution, making results, not actions, the criteria for legal judgments. From the field of antitrust, what its adherents call a "movement" has expanded to most legal arenas and beyond.
"Feminists, in recent years, have picked up the law-and-economics ball and run with it," said Richard A. Posner, the judge and legal scholar who developed some of his novel ideas in talks with Dr. Director. For example, in Reason magazine in 2001, he explained that giving a monetary value to domestic work can support feminist arguments for greater equity.
Dr. Director was born in what is now Ukraine in 1901, according to the New Palgrave Dictionary of Economics and the Law. When he was 12 or 13, his family moved to Oregon, where his father was a peddler and later opened a store.
A representative from Yale came to Portland to recruit students, and he and a friend, the painter Mark Rothko, applied. At Yale, the two published a cheeky leftist newspaper called Yale Saturday Evening Pest.
After graduating, Mr. Director took jobs he thought appropriate for a young socialist, from working in a coal mine to picking fruit. He took a cattle boat to England and taught labor history at a union school in Oregon. In 1927, he went to the University of Chicago to study labor economics with Paul Douglas, later a Democratic senator from Illinois.
In 1930, he began a four-year stint as an instructor at the university. The department was then ruled by Frank H. Knight and Jacob Viner, who together elevated the University of Chicago to economics' highest tier, along with Harvard and the London School of Economics.
